Fortune Staff

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The financial holding company is the parent of Franklin Templeton Investments, which has offices in 30 countries and is based in San Mateo, Calif.

Franklin Resources, Inc. (BEN) Company Profile, News, Rankings | Fortune

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Franklin Resources

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Jenny Johnson discusses assuming the top leadership role during a time marked by multiple leadership challenges.

Franklin Templeton CEO reflects on swift action, internal company work after Amy Cooper incident

Leadership

Jenny Johnson discusses major acquisitions, social upheaval.

New Franklin Templeton CEO reflects on leadership challenges

Jenny, Thank you so much for joining us. You know, you have attracted so much attention since he became the new CEO of Franklin Templeton just a few months ago. Your first decision was to do a giant acquisition. You bought Lake Mason, the investment firm, and also your biggest competitor. Tell us why you did the deal. You know, for us, this is really a growth story. And I think it's three things. It is that we wanted an all weather lineup of products. More, more products for clients number two, uh, greater diversification of our client base. So we've been 75% retail, 25% institutional. This gives us 50 50 and finally more scale in key markets like Australia, the U. K. And Japan. And the reason that this matters for our clients is because we can invest in the business. When you have more scale, you can provide more value added services for your clients. So we're excited about being able to do that. Well, and and then a few weeks later, you announced another deal. This one was a digital finance firm. Uh, you know, these are very bold moves for a new CEO. But what I think is even more remarkable. The decisions you made coincided with two major crises going on in the country coronavirus pandemic and then nationwide protests about race relations in America. I think we should talk about both of them. I understand that you were able to quickly mobilize all 10,000 of your employees scattered out into 30 different countries to make the move to work from home. How did that quick action help your business to be able to smoothly shift to working from home? In this environment, you had a lot of competitors who are focusing on the technology and trying to figure out how people did their jobs day to day. Our shift was very, you know, smooth. And so there was no real client impact. As a matter of fact, one of the benefits of this time is we're actually finding that clients are now adopting much more comfort around digital communication. And so, with our team already be very, very comfortable communicating that way. We've been able to in some cases triple the number of contacts were able to make with clients, uh, and even reach clients that we haven't been able to reach really in the past because they've been much more open to receiving the video communication. Well, that's fascinating. You know, As you know, uh, many states have been reporting recently a surge of Corona cases, and so they put a pause on their reopening plans. Many of these are states where you have your operations. I'm just wondering that how does that disrupt Franklin's momentum to move more towards getting back to business as usual? Or doesn't it make a difference for you? You know, for us, we say we're going to be slow followers going back to the office. We don't need to rush it. Things are going fine. Working from home, we are starting to open some offices up where we can provide safe social distancing for those who need to be home. Not everybody has a great home work situation. And so we know that there, uh, there are some that just need some priority, and so were given priority to to the folks who need to be back in the office, looking at the bigger picture. Given the uncertainty about the virus, the health of the economy, and not to mention all the volatility going on in the stock market. When do you see Franklin's business returning to pre pandemic levels? I think it's a little bit hard to predict right now what the path of this virus is going to be. I think it is. I'm skeptical that we can have a scalable vaccine even within 12 months, Uh, and whether you'll have an antiviral. I mean, I think that the ability want to produce. And even though the world has never had a situation where so many resources are being coordinated and working towards a goal, but I think it's a difficult thing to do, so you know, until people can predict where the end of this virus is and this pandemic is is hard to both price and make plans. And so I think that impacts any business because none of us really have certainty around that. Let's turn now to your leadership during this incredible time of social unrest. Franklin Templeton was thrust into the spotlight early on because of that Central Park incident in New York City. Um, your company got credit for making the quick decision to terminate the employee involved. Why do you believe it was important for you to make a quick decision and act with such clarity. We espouse zero tolerance for racism and zero tolerance means just that. And so when we looked at it and we concluded that this just this just was not consistent with our values as a firm up, Frankly, we we knew we needed to make a swift decision. There wasn't a lot else to debate once you decided that that was the situation. Uh, and and so you know, I think it's very much consistent with how we operate as a firm for me personally, it's been a phenomenal experience in, uh, checking back in and and starting to learn. I feel like I've been on a journey in the last couple of months of just understanding the experience, particularly of black Americans, uh, in this country and our own employees. And I've really been, you know, benefited from sitting with our business research groups and talking to them about, you know, some of the discrimination they experience outside the work, and it's just been helpful for me to have a lot greater empathy for the situation. As the new CEO, I mean, what has stood out you said over the last couple of months you've come to learn so much what's really stood out for you. So you know, I had the opportunity, for example, to sit down with our our Black Empowerment Network, which is one of our business resource groups. And it was a Juneteenth event and and and folks were sharing just their experiences. And I can tell you, I learned so much. Uh, and and you know, one of the stories was a woman who I know lives, you know, upper middle class, lives in a predominantly white neighborhood and said, You know, I I was thinking about walking my dog on a different route, and I had to kind of think about that. And I couldn't believe that she actually has to think about where she's going to walk walking her dog because she's, you know, fearful that as a black woman that people will think she shouldn't be in that neighborhood. Uh, and you know it. It was stories like that that just and there were a series of different ones, uh, it just really opened my eyes. I thought I was probably much more aware than I was and I think for us to have empathy for each other, we really need to understand each other better. And it's and we need to spend the time, particularly leaders on listening to folks about what their experiences are. Well, recently you sent a letter to Franklin clients and along these lines you said that And this is your quote, uh, that the company stands firmly against racism and recognizes there's much more work to be done to address the issues. So in the context, which you've been just saying, um, what goals and concrete actions have you set for the company? We haven't set specific goals. It is exactly what we're doing right now. We're having those conversations about how should we lay out specific goals as far as hiring, making sure that we're casting a net, that's broad, you know, I would say if you fish in the same pond, you're gonna get the same fish. So if your hiring practices aren't going more broadly, were you able to tap into African Americans or more women? So we have a lot of things that we're doing as far as ensuring that we're engaged, and I think it's a firm are. Step right now is to decide exactly what specific goals we want to put in place to end pace of which we can, you know, demonstrate that improvement. And I understand that you created a new position, Chief Diversity officer. What can you tell us about the new executive in that job and why you decided to hire? So Regina Curry has been in this world with, like, Mason, and, uh, To be honest, the CEO of like Mason said, I gotta tell you, one is she's fantastic. It's changed the way I as a CEO of thought about diversity and inclusion, and we as a firm, uh and so in talking to him And then in talking to Regina, I got really excited about it. So hired on, she's a direct report of mine, I can tell you that in the last couple of months she's not even yet an employee at Franklin Templeton. I have tapped into her expertise as we've been trying to respond to some of the issues, including our own within Central Park. And she just has a wealth of knowledge, uh, that she brings, and so we're really excited. So what is the most important thing that you would like her to accomplish, um, as the chief diversity officer over the next year or two when it comes to diversity and inclusion issues that Franklin greater diversity in our hiring, which means that we have to be able to tap into a candidate based that we haven't been able to tap into. So we're counting on Regina to help us think through that. I want to see, uh, you know, things like our vendor management program. How how should you evaluate minority vendors? And I want to see a scorecard for us as a firm that we are talking about and that all levels of the firm are looking at and saying We're part of We get that this is a key goal for us as a firm and and that were, you know, marching to the path of of achieving those goals as important as any of the other goals that we have in the firm. Jenny, you're the fourth member. But the first woman of the Johnson family to leave Franklin Templeton, the company that your grandfather founded more than 70 years ago. How do you think the responsibilities of your job different from your predecessor when it comes to addressing the social issues that we've just been talking about. My father always said, Take care of the clients and the stock price takes care of itself, so that hasn't changed. Were absolutely focused on doing what's right for our clients. But I think that that what is apparent to us now is the injustice that has happened in in society. And I think that the fact that we're now catching it's obviously been on. But we're catching it on on videos and things. Uh, you know, puts it first and foremost, and a CEO has the ability to make change within the sphere in which they operate, so certainly within the company. And so it is my job and my leadership team job to ensure that we are fair and that we are focused on these types of issues and making sure that we have both a diverse and an inclusive environment, and that's something that we can control. Uh, and I think that that that that every CEO should carry that responsibility today. I certainly do