BlackRock Inc. fired a top official over a consensual affair, the firm’s second high-profile dismissal this year over misconduct, as Chief Executive Officer Larry Fink cracks down on the behavior of his senior lieutenants.
Mark Wiseman, global head of active equities and viewed as a potential successor to Fink, was terminated for violating the company’s policy on work relationships, according to a memo that Fink and President Rob Kapito sent to staff on Thursday.
Global head of human resources Jeff Smith was dismissed in a similar way in July for breaking company rules.
The dramatic nature of the departures shows how misconduct is being scrutinized and penalized at Wall Street firms in today’s environment. They also underscore Fink’s willingness to make an example of even the top leaders at the world’s largest asset manager.
“I definitely think there’s a culture shift,” said Nancy Erika Smith, a lawyer whose clients have sued Wall Street firms for harassment and discrimination.
The colleague involved in the affair reported to Wiseman, according to a person familiar with the matter. The Globe and Mail earlier reported that the person was his subordinate.
Wiseman had been steadily gaining power at the firm since joining in 2016. He was chair of BlackRock Alternative Investors, in addition to his role at the helm of the active equities business.
He was in a group of about seven contenders widely thought to be in the running to replace Fink. His wife, Marcia Moffat, is BlackRock’s Canada country head.
Jeff Smith, the firm’s former global head of human resources, left after failing to adhere to company policy, Fink and Kapito announced in a memo in July, without giving more details. Both Smith and Wiseman were on BlackRock’s global executive committee.
“This is not who BlackRock is,” Fink and Kapito wrote in a memo Thursday on Wiseman. “This is not our culture. We expect every employee to uphold the highest standards of behavior. This is especially critical for our senior leaders.”
Companies worldwide are facing increased scrutiny over the behavior of top executives. The #MeToo era ushered in by the allegations against movie mogul Harvey Weinstein helped create a zero-tolerance policy for behavior that would have remained hush-hush in the past — or handled internally.
Last month, McDonald’s Corp.’s CEO Steve Easterbrook left the company because of a relationship with a colleague. In June 2018, Intel Corp. removed Brian Krzanich as CEO after the chipmaker learned he had a consensual relationship with an employee.
The issue with Wiseman had no impact on any portfolios or client activities, Fink and Kapito said in the memo Thursday. The active equities business that Wiseman oversaw had about $290 billion in assets at the end of June.
“I regret my mistake and I accept responsibility,” Wiseman said in a separate memo.
Alternative investments has been a major focus for BlackRock, which manages a total of roughly $7 trillion, as it looks to branch beyond indexed products like exchange-traded funds.
Speculation about successors to Fink, who turned 67 this year, has increased as investors and analysts look to the company’s future. Fink addressed his strategy over cultivating a select group of proteges in an interview with Bloomberg Markets magazine in 2017, when he said that when he leaves the company he does not expect to stay on as chairman.
Wiseman, who has a law degree as well as an MBA, once served as a clerk to Canadian Supreme Court Justice Beverley McLachlin, and spent part of his career in law.
He joined the Canada Pension Plan Investment Board in 2005 and was named CEO in 2012. His tenure at Canada’s biggest pension saw it open offices and pursue investments abroad, particularly in South America and Asia.