Wondrack would have felt feel pressure to side with the venture capital arm because her ultimate boss is Abigail Johnson, said Palmiter, who has written extensively on the fund sector and is a critic of its governance standards.
Wondrack, 52, is paid as an employee of Fidelity, U.S. regulatory filings show. She joined Fidelity in 2012, after working at mutual fund company Columbia Management.
Loporchio, the Fidelity spokesman, said the company identified the need for a change in a "periodic review of its processes."
Another key overseer of Fidelity fund investors' interests, however, continues to serve in a similar dual role.
James C. Curvey - a long-time top lieutenant of Fidelity Chairman Ned Johnson - is chairman of the board of trustees for a number of Fidelity mutual funds, including ones that invest in the same companies as F-Prime.
Fund trustees are responsible for protecting the interests of investors. Ned Johnson chose Curvey for the role when Johnson gave up his duties as chairman of the board of trustees for individual Fidelity funds.
Curvey also serves a trustee for one of the owners of Impresa Management LLC, the manager of the F-Prime Capital's venture investments. It's not clear exactly who Curvey represents in that role; the stake is held in a trust, whose owners are not disclosed. But other filings indicate that Impresa is owned by the trusts of Johnson family members and Fidelity insiders.
Curvey's history with the Johnsons' private investing entities dates back more than two decades. In 1996, along with Abigail and Ned Johnson, Curvey sought and received an SEC exemption in 1996 that gave Impresa more latitude to invest on behalf of high-ranking Fidelity employees, SEC records show.
Partnership distributions to Curvey from venture investing have made him a lot of money. Curvey, for example, made millions of dollars from the venture capital arm's investment in Britain's COLT Telecom. In 2000, he donated some of those gains, nearly $3 million, to his family's charitable foundation, according to an annual filing with the IRS.
Curvey and Wondrack declined to comment for this report. Fidelity declined to comment on the potential conflict of interest in their dual oversight roles.