Memo to Wells Fargo: You Cannot Fix This With Ads and Social Responsibility

The Barometer, a longstanding customer of Wells Fargo, admits to being a little insulted. The full and multi=page ads just keep coming from Wells Fargo. You know, “Established 1852. Re-Established 2018.” But, the talk of a diverse board. The $20-million expansion of its Innovation Incubator (IN2), which advancing emerging clean technologies and start-ups. The 433,800 meals through its joint effort with the United Way, the Wells Fargo Holiday Food Bank. And $1 million per day to charities. Then, $50 million to Native-American communities for economic development. Wells Fargo employees volunteering 5,500 hours per day. The list goes on. All good causes. All noble efforts. But, these old saw social responsibility tools are indulgences for the fake account debacle. The transparency of busting one’s buttons is misdirection. Never mind what you see going on in the news, we are reborn.

Here’s a smattering of the bad news that continues to erupt at Wells since the time of the fake accounts scandal: We learned in May that Wells improperly altered corporate clients’ data; We learned in June that Wells is now on the “no business with” list for state and municipal bonds because of its sales practices (including New York City); We also learned in May that an audit of Wells pension fund management revealed retention of fees that should have come back to the cities and states using Wells as their managers and those government entities are now switching their fund to other managers; We learned that Wells’ brokers kept rebates that should have gone to their customers; Wells’ share price has risen only 8% since September 2016 (just before the fake accounts scandal emerged); and Wells is struggling under the federal restrictions placed on it because of the fines, penalties, and regulatory oversight. And with each new issue, we get the Wells line that it was a system error. The Barometer will give them that: FIX THE SYSTEMS!

It seems as if Wells is trying to buy a reputation. Oh, that it were that easy to recover from a scandal (and some subsequent misdeeds) that destroyed trust. Like a new or re-established business, Wells will need to earn back that trust slowly. Trust does not come from flashy ads of braggadocio. It comes from rooting through the whole bank for lax processes and control, for managers and leaders who do not buy into being reborn and are simply laying low until they get through “this government thing,” and focused audits on how divisions are earning their revenue. Are those numbers real or have they been achieved through some tactic that will emerge? My bet is on some issues that still have not emerged at Wells.

That type of effort is quiet, takes time, and cannot be flashed about as evidence of progress. In short, Wells has a culture problem and good deeds will not cure it. In fact, it makes those who are really not on board with the ethics things more cynical: “Okay, so we paid a fine and were slow for awhile. Look how much we made before we got caught, and we can do some good deeds as penance and move on.” An internal focus, not external fluff, is the ticket here. Fluff is insulting, especially to longstanding customers who would welcome the pride that we would have in our bank’s quiet humble efforts to truly change.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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