The report noted that the leaders of its community bank division “distorted the sales model and performance management system, fostering an atmosphere
that prompted low quality sales and improper and unethical behavior.”
Using customer information to open fictitious accounts would certainly seem to qualify as something more than “low quality sales.” Yet when the Los Angeles city attorney
sued Wells Fargo in 2015 over the accounts, its chief executive, John Stumpf, wrote in an email, “Did some do things wrong — you bet and that is called life.
Warren E. Buffett once said, “It takes 20 years to build a reputation
and five minutes to ruin it.” Let me offer a corollary to that: It takes five minutes for the true nature of a corporate culture to emerge, and 20 years to change it.
Last week, Wells Fargo released a report detailing an investigation into the sales practices
that led employees to open bogus accounts to meet aggressive sales targets.
But the new report took a less sanguine view of Mr. Stumpf’s leadership, using the typically restrained language of corporate investigations to note
that he “failed to appreciate the seriousness of the problem and the substantial reputational risk to Wells Fargo.” The bank will claw back an additional $75 million in compensation from him and the former head of community banking.
That sounds like a lot of money, yet Wells Fargo’s executives were richly rewarded for years, and the report largely exonerates current leadership.
Barclays Bank will need to figure out how the actions of its chief executive, James E. Staley, will affect its culture as it deals with the revelation last week
that the British authorities are investigating him for trying to unmask the identity of an anonymous whistle-blower.
