Wednesday, November 21, 2007

Fidelity Mutual Fund - Investment

Fidelity Plans Two Boards to Oversee Mutual Funds

October 2007

Fidelity Investments plans to create two boards to oversee a stable of mutual funds

One board will supervise equity and high-yield funds, and another will be responsible for investment-grade bond and money- market funds,

Fidelity, which manages $1.5 trillion in assets, currently has one board overseeing 369 of its 427 funds.

Given the extraordinary breadth of fund offerings, there simply weren't enough eyeballs looking at the different products,this is certainly a step in the right direction, analysts feel.

Fidelity's Chief Executive Officer Edward ``Ned'' Johnson III is chairman of the company's fund board. His role after the split hasn't been decided.

The company, the largest U.S. mutual-fund manager, has been criticized for having Johnson, whose family controls the firm, serve as fund board chairman. Board chairmen at firms including Putnam Investments and Invesco Plc's Aim Investments are independent trustees whose responsibility is only to investors.

Mutual-fund boards are composed of trustees, who typically monitor fund fees, strategy and size.

The resignation of Ellyn McColgan

August 2007

McColgan built Fidelity into America's largest brokerage. In April, she took on broad sales and operations duties that put her in charge of nearly half of the company's 42,000 employees.

McColgan, 53, had made it clear to friends that she wants to be a CEO and that she had hoped it would happen at Fidelity. She, among others, was surprised when Fidelity announced in mid-July that Rodger Lawson, 60, a Fidelity alum who recently was vice chairman of Prudential Financial, would return as president.

Lawson's official arrival on Monday, August 6, put a layer between McColgan and Ned. And it clearly tipped her decision to leave. Now McColgan, who declined to comment for this story, is known to be looking for a CEO job elsewhere in the financial services industry or in the not-for-profit arena.

hile, Fidelity faces the huge task of restocking its ranks following a dizzying series of high-level departures. Chief operating officer Bob Reynolds left unexpectedly in April. Stephen Jonas, who was executive director of the firm's investment management division, quit in January. Fidelity subsequently launched a search for a chief administrative officer as well as a new investment-management boss but at least for now is sticking with its in-house talent.

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