Fidelity Investments: Woke Capital Or Neutral Entity?

Fidelity Investments is one of the largest U.S. money managers, with about $3.5 trillion in assets. The company has been accused of making public statements in support of racial equity and justice without taking meaningful action to address systemic racism. In 2020, a former female employee of Afro-Latina and Dominican heritage, Elizabeth Evans, sued the company for discrimination and a hostile workplace, claiming that women were disparaged and racially insensitive comments were made. Despite Fidelity's assertion that they investigated the claims and found them to be without merit, the lawsuit brought attention to the company's handling of racial and gender issues in the workplace.

Fidelity Investments' stance on racial equity and justice

Fidelity Investments has been accused of "woke-washing" by making public statements in support of racial equity and justice without taking meaningful action to dismantle systemic racism. However, they have also been criticised by Republicans for votes that allegedly place a liberal agenda above the companies' duties to shareholders.

Fidelity Investments, along with other asset managers, drove votes for environmental and diversity proposals at large publicly traded firms in 2021. This has led to accusations that they are prioritising CEOs' personal policy views over retirees' financial security. However, these firms have also received credit for their votes, with some calling on them to go further by rejecting boards without any minority members and getting behind proposals for racial audits, equitable workplace practices, and increased transparency around political contributions and lobbying.

Fidelity Investments, along with other large asset managers, has endorsed the Racial Justice Investing Coalition, which has laid out five actions that endorsers will take in the future. These include committing to actively engage with, amplify and include Black voices in investor spaces and company engagements, embedding a racial equity and justice lens into their organizations, and integrating racial justice into investment decision-making and engagement strategies.

Fidelity has also been identified as one of the investment companies that covet the profits generated by doing business with America's largest cities and pension funds, which are dominated by progressives. This gives them a lot of motivation to push critical race theory on public companies, as they have enormous control over revenue streams.

While Fidelity has faced criticism and accusations of "woke-washing," they have also been recognised for taking some steps to support racial equity and justice, even if some believe these steps do not go far enough.

Fidelity's voting rights and proxy fights

Fidelity Investments, along with other asset management firms, has been accused of "woke-washing" ahead of the 2022 proxy season. This comes as these firms face increasing pressure to use their substantial shareholder voting power to drive change and address issues such as racial equity and climate change.

Fidelity, as a large shareholder in many publicly traded companies, has the ability to influence company operations and policies by casting votes. While shareholders can choose to attend shareholder meetings and vote in person, they often grant a proxy to investment companies like Fidelity, allowing them to vote on their behalf.

Fidelity's proxy voting guidelines outline how they evaluate and cast their votes. They consider factors such as financial materiality, the company's approach to human and natural capital, and the potential impact on long-term shareholder value. They generally support proposals that align with their core principles, such as putting customers' and fund shareholders' long-term interests first.

In terms of board diversity, Fidelity will generally oppose the election of directors if there is no gender diversity or racial/ethnic diversity on the board. They also consider factors like board independence, director attendance, and management's track record when evaluating proxy votes.

Fidelity's proxy voting process allows shareholders to cast their votes online, over the phone, or through postal mail. They provide proxy statements with details on the meeting and proposals before the voting takes place. Shareholders are encouraged to vote promptly, as their votes are important regardless of the size of their holdings.

Fidelity's influence on corporate policy

Fidelity Investments, one of the world's largest asset managers, has been accused of "woke-washing" by making public statements in support of racial equity and justice without taking meaningful action to address systemic racism. However, the company has driven votes for environmental and diversity proposals at large publicly traded firms, and offers investment options that align with progressive values, such as cryptocurrency and ESG (environmental, social, and governance) funds.

In recent years, Fidelity has faced pressure from investors and activist groups to use its voting power to drive changes related to racial equity, diversity, and environmental issues. In response, the company has supported proposals for racial equity audits and voted for environmental and social goals. However, some critics argue that these actions are not sufficient to address systemic issues.

Fidelity's diverse range of businesses and independence allow it to have insight into the entire market and adapt to evolving investor needs. The company's influence on corporate policy is shaped by its commitment to innovation and meeting the changing financial needs of its customers. This includes offering new products and services, such as blockchain technology, student debt programs, and charitable giving through donor-advised funds.

In summary, Fidelity's influence on corporate policy is significant due to its role as a large asset manager and shareholder. The company's voting power and investment offerings reflect its support for progressive values and influence the operations and policies of publicly traded companies. While Fidelity has faced criticism for its actions on racial equity, it continues to adapt to evolving investor preferences and drive change through its diverse businesses and commitment to innovation.

Fidelity's workplace culture

Fidelity Investments, one of the largest U.S. money managers, has been accused of fostering a discriminatory and hostile work environment. In 2020, a former female employee, Elizabeth Evans, of Afro-Latina and Dominican heritage, sued the company for discrimination and creating a hostile workplace. Evans alleged that women were disparaged and that racially insensitive and sexist comments were made, including the denigration of Islam and praise for the U.S. economic impact of slavery. She also experienced retaliation after complaining to her superiors. As a result, Evans, who worked at the company's Merrimack, New Hampshire office from 2015 to 2018, sought lost wages, compensation for emotional distress, and punitive damages.

Fidelity, however, denied the claims, stating that they investigated the allegations and found them to be without merit. A company spokesman, Vincent Loporchio, emphasized their commitment to a respectful and inclusive culture, claiming that tens of thousands of people have built long and respected careers at the company. Fidelity's Chairman, Abigail Johnson, had previously asserted in 2017 that the company would not tolerate any form of harassment.

Despite these statements, the accusations against Fidelity add to a growing conversation about the role of corporations in addressing systemic racism and promoting diversity, equity, and inclusion. In 2022, asset managers, including Fidelity, faced accusations of "woke-washing." There were calls for these firms to use their shareholder votes to drive meaningful change and address issues such as racial equity and justice. While some acknowledged the importance of diversity in the boardroom and among the workforce, critics argued that more needed to be done to translate statements and proposals into concrete actions that dismantle systemic racism and promote true equality in the workplace.

Fidelity's response to allegations of discrimination

In 2020, a former female employee of Fidelity Investments, Elizabeth Evans, sued the company for discrimination and the fostering of a hostile workplace environment. Evans, who is of Afro-Latina and Dominican heritage, described situations in which her male colleagues denigrated Islam, praised the economic impact of slavery in the US, and discussed the impact of childbirth on women in graphic detail. Evans also stated that she faced retaliation after complaining to superiors about the hostile work environment.

Fidelity spokesman Vincent Loporchio responded to the allegations, stating that the claims had been investigated and found to be without merit. He emphasized that Fidelity takes all allegations of inappropriate behavior seriously and has a healthy and respectful company culture.

> We take all allegations of inappropriate behavior very seriously and when behavior of this type is brought to our attention, we investigate it and take prompt and appropriate action. We obviously have no tolerance for this type of behavior and we have a vibrant, healthy and respectful culture where tens of thousands of people have built long, respected careers.

> Fidelity spokesman Vincent Loporchio

In 2017, before the lawsuit was filed, Fidelity's Chairman Abigail Johnson stated that the company would not tolerate any form of harassment. This statement was made in response to the dismissal of two Fidelity money managers accused of sexual harassment.

While Fidelity has denied the allegations made by Evans and reaffirmed its commitment to a respectful work culture, the lawsuit filed by Evans highlights the complexities and challenges of creating and maintaining an inclusive and equitable workplace environment.

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