Wells Fargo: The Gang That Can’t Shoot Straight

Let’s recap the problems at Wells: The fake accounts debacle, the fake auto loan insurance mandates, the mortgage changes without authorization (fake again), and the sacking of four foreign-exchange bankers along with the transfer of an executive from that area of operations. Now add a new development. The Comptroller of the Currency has issued a confidential report on Wells Fargo, which, naturally, was leaked to the New York Times. The report discusses the failure of the bank to respond to consumer complaints about the issues listed in the recap. Also, the report concludes that Wells failed to supervise what its contractors (i.e., insurance companies benefiting from the Wells mandate) were doing. Wow — the hits keep on coming at this bank.

The report does praise the bank’s hiring of consultants and launching of investigations. The question the gaggles of specialists are not answering is obvious except to anyone at Wells or the Office of the Comptroller: What is it about the culture of Wells that causes this type of conduct? The conduct is not isolated to the consumer division now. Until Wells gets at that question, the clean-up will continue. Clean-up does not solve culture problems. Clean-up is checklist. Clean -up is full-page ads pledging to do better. Clean-up is spending money. Clean-up is an expensive process for the privilege of moving on, but it is not a solution to the cultural problems that fueled all of the list. The Comptroller is praising clean-up. Think about this: In the midst if trying to clean up one of the most embarrassing and blatant abuses of customer trust, Wells had ongoing behaviors among employees in various divisions to whom it did not register that something was awry with their conduct, i.e., fake stuff. Causation here is deep in a culture that needs some work.

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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2 Responses to Wells Fargo: The Gang That Can’t Shoot Straight

  1. Vic Safranek says:

    Ms. Jennings, I have been doing a lot of reading of your past blogs this evening after discovering you are still in action. A comment to the above question as to what is wrong at Wells Fargo (and I am sure this is at the bottom of almost everything you observe) is that the tone of every organization is set by the person at the top. Someone who will tolerate or encourage ethical slack will eventually have an organization full of that type of people, and vice versa. This was pointed out to me early on by the disabled veteran city manager of the metropolis of Somerton, Arizona, little more than a wide spot on the road between Yuma and San Luis, Arizona.

  2. mmjdiary says:

    The puzzling thing about Wells is that he Board is practically 100% new, along with the CEO, and, of course, many of the divisions also have new leaders. Still, the behavior continues, so what is wrong with the replacements? I am wondering if they really have the visions because I see the ad campaign for Wells and it is about their investments in solar and neighborhood redevelopment, i.e., social programs. You can’t work your way out of ethical issues through social programs. So, tone at the top is critical, but I am wondering whether Wells’ top management is really taking the missteps seriously — they just keep coming and that tells me that despite all that has happened there may not be acceptance of the reality of their conduct and current situation.

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