By now, you must have read about the $185 million, give or take a few million, that Wells Fargo Bank will pay to settle a fraud case brought against it by the Consumer Financial Protection Bureau (CFPB), the city of Los Angeles, and the U.S. Treasury.
A quick overview: Over the last five years, Wells Fargo employees – under continual pressure to meet sales quotas – opened multiple accounts for a sizeable number of their customers, who remained unaware (for far too long) that these accounts were opened in their name. Customers were billed for activity and inactivity for these accounts. It’s been said that these customers, who often received lower credit scores due to these secret accounts, are going to be negatively impacted for years.
I understand that close to five thousand Wells Fargo employees have been or soon will be shown the door. Some, though probably not all, deserve to lose their jobs but that’s the way corporations roll, isn’t it? (Why use a scalpel when an axe is faster and requires less skill?)
Most, if not all, of top management should lose their jobs as a result of this fraudulent behavior. Justice demands that many of them lose their licenses, spend time in jail, and/or pay significant monetary penalties. Whether they committed the fraud the organization is accused of is a moot point: by virtue of their positions, top management explicitly or implicitly condoned and even encouraged illegal and unethical practices.
Question: Why are the John Stumpfs and the Carrie Tolstedts of the business world
so lavishly rewarded for their ethical lapses?
Why did this happen and why did it go on for so long? Primarily because profits must keep increasing for shareholders to remain satisfied (i.e., keep their Wells Fargo stock and even increase their holdings) and for the company to attract new shareholders. “Profit”, however, is not a suitable business objective. The word does not belong in any organization’s vision or mission statement.
“My psych profile fit a certain…”moral flexibility” would be the only way to describe it.”
Martin Blank, “Grosse Pointe Blank” (1997)
As we all know, saying what you’re going to do and doing it are far from synonymous. And there are many reasons why we don’t do what we promise to do. Some of those causes are beyond our control, to be sure. However, that doesn’t excuse our lack of excitement when things go awry, or void our stated commitment to corrective action and continual improvement.
Just like cheating can easily become part of an organization’s culture, the commitment to quality, customer satisfaction, and continual improvement can become part of the culture of every organization. Taking the moral high ground, however, must start at the top. Top management cannot simply preach standards and values. (Why have a “Vision and Values” statement if you’re not going to embody it?) Top management leads by example; therefore make it a good one.
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 Specifically, the Office of the Comptroller of the Currency, US Treasury Department