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06 December 2019 12:31

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BlackRock exec Mark Wiseman ousted over affair with employee

Mark Wiseman oversaw the $300 billion Blackrock active equities business. He is married to Marcia Moffat, another senior Blackrock executive, who is in charge of the company's Canadian business RICHARD LAUTENS/TORONTO STAR VIA GETTY IMAGES A senior Blackrock executive tipped as a potential successor to chief executive Larry Fink has been fired for failing to report a relationship with a colleague. Mark Wiseman, who led the money manager's $300 billion active equities business, was dismissed for violating a company rule that requires employees to disclose relationships with fellow employees. Blackrock is the world's largest asset manager, with nearly $7 trillion under management at the last count, making the top job at the company one of the most important in world finance. Mr Fink, who has led Blackrock since its foundation in 1988, has the ear of governments, big corporations and some of the wealthiest individuals in the world because his group holds a good deal of their money.

Mr Wiseman,… December 5, 2019 | 12:01pm | Updated December 5, 2019 | 1:14pm Investing giant BlackRock has terminated one of its top executives after it was revealed that he had been having a consensual affair with an employee. Senior managing director Mark Wiseman — who had been seen as a potential successor to Larry Fink, the founder of the $6.8 trillion fund — was fired after the firm ruled the affair violated its policies, according to the Wall Street Journal. Making the drama even messier is the fact that Wiseman's wife, Marcia Moffat, is the head of BlackRock's Canadian division. picture alliance via Getty Image Indeed, some had believed that Wiseman's chances of eventually leading BlackRock were boosted by his power couple status with Moffat, who BlackRock insiders say is well-liked by Fink. Moffat was hired by BlackRock in 2015, one year before Wiseman, who joined the fund after almost four years as CEO of the Canada Pension Plan Investment Board, the nation's $400 billion sovereign wealth fund.

BlackRock's poaching of Wiseman was seen as something of a coup at the time, but his focus on long-term investment strategies and private equity at BlackRock has been out of sync with market realities. "This is just super embarrassing for everyone over there," one person with knowledge of BlackRock goings-on told The Post. "And it's not like Wiseman has been killing it." The Wiseman-Moffat marriage was a cute subplot for BlackRock, a company not often thought of for its sweet side. In an interview last year, Wiseman accidentally gave a reporter his wife's business card, an error he said was caused by selecting incorrectly from the pile of mingled BlackRock business cards on the couple's bedside table. We all know of couples who met at the office, but these days the corporate setting has turned toxic for romance.

So what gives? In two of the most recent instances, Steve Easterbrook, CEO of McDonald's Corp. and Mark Wiseman, global head of active equities for BlackRock Inc., were both forced to leave their jobs after failing to disclose consensual relationships. Wiseman, whose departure was announced Thursday, first joined BlackRock — the world's largest asset manager with US$7 trillion in assets under management — in 2016, after serving as Canada's biggest pension guru in his role as the chief executive officer of the Canada Pension Plan Investment Board. Related Both Easterbrook and Wiseman appeared to accept their fates with equanimity, with Wiseman noting that, "I regret my mistake and I accept responsibility." Adding a twist to Wiseman's case is that his wife, Marcia Moffatt, is the head of BlackRock's Canadian division.

In both cases, the executives were forced to part ways with their companies after violating a specific corporate policy requiring executives to disclose consensual relationships. But why do companies have this policy for senior executives in the first place? Many corporations have long had rules prohibiting superior-insubordinate relationships. Such relationships create a significant potential for sexual harassment complaints and, more ominously, in the view of some courts, no superior/subordinate relationship can ever be consensual. Even if it ostensibly is, it may retroactively be viewed otherwise by the subordinate party when the relationship ends.

As well, no one should be in a position to evaluate or confer benefits i.e. bonuses, better assignments, etc., on someone with whom they are romantically involved. Companies could also reasonably expect their employees to act objectively and dispassionately in the interest of a business without letting the tugs of love or lust intercede. It is not only the involved parties who are affected. If other employees believe that they have little chance of being recognized or rewarded because one of their peers is involved with their common boss, morale is inherently impacted. But the policies at BlackRock and McDonald's were not merely to disclose superior/subordinate relationships but any at all. There are good reasons for that too, especially regarding senior executives. Neither Wiseman nor Moffatt apparently reported to the other, but they had to interact and their employers obviously had an interest in knowing that they were involved so that, for example, recommendations supporting the other might not be entirely objective. Similarly, their positions on issues which advantage the other's department might also be viewed askance if they were known to be involved. It is also important for an employer to be informed of consensual relationships in order to determine what responsibilities to assign or to otherwise ensure that neither one of them is in a position to assist the other. Then there is the issue of why the failure to disclose the relationship is cause for discharge. Cause impacts different levels of employees differently. Easterbrook as CEO and even Wiseman in his senior position at BlackRock must serve as role models for corporate compliance. They are the ones supposed to be enforcing the rules, not breaching them. As well, senior, fiduciary employees must act with integrity and that includes honest disclosure. Failure to do so, even unrelated to their jobs, is often cause for discharge. This does not mean that it is impossible to have a relationship in a corporate environment, although it is usually not the best idea. I know of many couples who are involved at senior levels and it has invariably impacted the ability of one or both of them to progress. But if you are going to get involved with a colleague, disclosure is the first rule forward. I would add that you should only date laterally but then, what happens if one of the partners is promoted? In my experience, they usually will not be. Employers do not wish to promote someone to be in a superior position to their partner since that leads to potential harassment allegations. As well, they often question the judgment of executives who become entangled in office affairs and that, by itself, reduces their promotional potential. So much as it may seem natural to date and even ultimately marry the coworker you met at the office cooler, companies have good reasons to prohibit this and those relationships are going the way of the dodo. Affair: Mark Wiseman was Blackrock's global head of active equities Blackrock has sacked one of its top executives after he had an affair with a colleague. Mark Wiseman, global head of active equities, had been tipped to succeed boss Larry Fink, but he was fired after admitting the relationship broke company rules. His wife, Marcia Moffat, is Blackrock's head of Canadian operations. Wiseman, 48, said in a memo to staff: 'I engaged in a relationship with one of our colleagues without reporting it as required. 'I regret my mistake and accept responsibility for my actions.' Fink and Blackrock president Rob Kapito told staff: 'We expect every employee to uphold the highest standards of behaviour.' The law school notes on its website that Wiseman served as a clerk to Supreme Court Justice Beverley McLachlin before she became chief justice, and "worked as a corporate lawyer for a top Wall Street firm in New York and Paris" before joining a bank with another U of T alumnus. He said he "was primarily interested in the legal side" of business. Wiseman, who also received an LLM as a Fulbright Scholar at Yale University, actively fundraises for U of T Law, and has spoken with Canadian Lawyer and Law Times in the past about his views on legal education. Wiseman met his wife — who is, Bloomberg reported, now also a BlackRock executive — while in law school, he told U of T. As of last year, Wiseman told Law Times he split his time between New York and Toronto. According to Bloomberg News, Wiseman said that he failed to disclose a consensual relationship with a colleague in a memo. "I regret my mistake and I accept responsibility," the memo reportedly said. The issue had no impact on any portfolios or client activities, BlackRock's Chief Executive Officer Larry Fink and President Rob Kapito said in a separate memo to employees reported by Bloomberg Thursday.