WE ALL MAKE MISTAKES, WELLS FARGO… But Who’s Taking Ethical Responsibility?

  • September 27, 2016

Wells Fargo has been in the news because of misbehavior by some of its managers and employees. Wells Fargo personnel conspired to withdraw money from customers’ accounts in order to open fraudulent accounts. The conspirators then quickly re-deposited the money into the customers’ accounts; the customers typically had no way to know these transactions occurred. This clever scheme may have served to dull the perpetrators’ sense of right and wrong. After all, they did replace the money quickly (and at today’s insultingly low rates of interest on checking and deposit accounts, the customers lost, at most, minuscule amounts of interest).

Whether the employees thought about the potential detrimental effects upon customers is an interesting question. The customers may have incurred unwarranted fees and possibly damaged credit records with respect to the bogus accounts.

What interests me is the motivation behind the Wells Fargo personnel’s actions. People tend to think of business ethics as being exotic, a species unique to business. The motivation underlying this latest breach of trust seems to have been to polish up employees’ and managers’ records, whether to retain a job, gain a bonus, or compete for a promotion. The motivation, however, is not so different from everyday situations in school, work, or other environments. People want to get ahead, or perhaps more accurately, they don’t want to fall behind.

None of us like to admit we failed to attain a goal or made a mistake. We seem to live in a world where admitting to a mistake is equivalent to being a failure, a loser. Our political leaders act as though they’ve never made a mistake. When cornered by their error, they say, “I take full responsibility;” Few of them ever resign or take a pay cut, however, so their remarks are gratuitous.

The work environment may, indeed, be a hothouse for the necessity of appearing to be perfectly competent. We may like to post on social media that people who don’t make mistakes aren’t really trying or aren’t daring, but woe be the person who admits to making or is discovered to having made a mistake. They may lose the respect of co-workers and their boss, their job, a bonus, or they may not get that promotion. The penalties for mistakes or failure to achieve can be high. People with families to support may find themselves in an unenviable position: fudge the data or suffer the consequences. I hesitate to judge them.

Such behavior is widespread. From resumes (curriculum vitae in the academic world) to the way we present ourselves in interviews, meetings at work, or with the public, we put our best face forward. Sometime we apply a little “make-up” to gloss over our errors or to hide our blemishes. The line between acceptable and unacceptable embellishment or omission is vague, and the temptation to engage in too much embellishment is strong.

The danger is, of course, that each breach of trust and every tiny deception in business or in our everyday endeavors becomes part of a “death of a thousand cuts.” Will people trust Wells Fargo employees, even if only a tiny proportion were involved in this latest breach of trust? Will breaching a small trust induce an individual to make a slightly larger breach in the future?

Non-management Wells Fargo employees may have witnessed co-workers being pressured by managers, eager or desperate to meet sales goals, to create fictitious accounts and then being fired in the wake of the scandal. An employee would have to be exceptionally scrupulous to disregard or openly oppose a manager’s request to create fictitious accounts; an employee would have to be heroic, perhaps foolhardy, to publicize such a breach of trust. Many business people might view someone who alerted the public to such shenanigans as violating an ethos. Whether such integrity and heroism is to be expected of the typical worker is a difficult question.

If the non-management employees face unenviable choices, what are management’s and top executives’ responsibilities in establishing an environment that stresses maintaining their customers trust? Business ethics professors maintain that leaders of a firm need to set an example for the rest of the personnel. In the case of Wells Fargo, the coincidental (or not so coincidental) exit of Carrie Tolstedt, the executive responsible for the managers and employees involved, with $124 million, is vexing news. To be fair, we don’t know the extent of Tolstedt’s knowledge of the malfeasance at this time; she may have employed the common tactic of not delving too closely into her subordinates’ actions, as long as the news was good. For the employees who have been fired from the company, where are their “golden parachutes?” Where is Ms. Tolstedt’s accountability? The public wonders whether corporations are interested in holding guilty executives responsible or, instead, letting them off with a “Stay out of Jail Card” and the instructions to pass “‘GO’ and collect millions of dollars.”

The views and opinions expressed are those of the author and do not imply endorsement by the University of Northern Iowa.

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