The report noted that the leaders of its community bank division “distorted the sales model and performance management system, fostering an atmosphere<br />that prompted low quality sales and improper and unethical behavior.”<br />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<br />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.<br />Warren E. Buffett once said, “It takes 20 years to build a reputation<br />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.<br />Last week, Wells Fargo released a report detailing an investigation into the sales practices<br />that led employees to open bogus accounts to meet aggressive sales targets.<br />But the new report took a less sanguine view of Mr. Stumpf’s leadership, using the typically restrained language of corporate investigations to note<br />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.<br />That sounds like a lot of money, yet Wells Fargo’s executives were richly rewarded for years, and the report largely exonerates current leadership.<br />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<br />that the British authorities are investigating him for trying to unmask the identity of an anonymous whistle-blower.
