There comes a point when those in charge at Wells must pause and wonder, “What’s up with this place?” As the bank trots through its rebirth (if the ads and billboards accurately reflect intentions), government sanctions, and board members ousted by the Fed, new issues keep popping up hither and yon. The hither this week was the termination of more than a dozen employees in its investment bank for altering time stamps on emailed receipts for their dinner.
The Wells policy on dinner reimbursement permits employees to order in food and be reimbursed if they are staying late to work on deals or with clients. Some employees were regularly placing orders for dinner at times earlier than the 6:30 PM time that the earliest the policy permitted for reimbursed evening meals. Those employees who altered the time stamps were terminated.
The irony is that some at Wells are questioning whether termination was too harsh. If this type of activity is not a line-crosser that is clear to employees, there is a cultural problem. That there is disagreement indicates a bigger cultural issue. If you are willing to falsify records in order to get free meals, imagine what you would do to meet your numbers and goals for your bonus. Why, you might be tempted to make up accounts or improperly charge customers for services or keep fees that should be returned to your portfolio customers. Oh, wait — employees at Wells did all those things and more, according to pending investigations.
There is something deep within the Wells culture that has not made its way to surface and has not yet been addressed. Sometimes employees do engage in behaviors such as these that make no sense given their employer’s regulatory status. However, when they do such things it generally means, as with VW:
1. The compliance function is still not operating well or is not trusted.
2. The management team gives lip service to its commitment to fly right, but lives in denial, and employees see it.
3. Employees and management believe that they just need to get through the investigations and oversight and then they can go back to the way things were.
4. Employees believe that they are doing and were doing nothing different from what other banks were and are doing.
Sometimes the root cause of a troubled ethical culture is a combination of these issues (and many others, more complex than these). Regardless, Wells needs to get at what is really going on in its culture. If at least 12 employees in your investment bank are falsifying documents, more yon events will be percolating to the surface.