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As the Wells Fargo Cover-up Continues, Sloan’s Time is Ticking Away


shutterstock_125650520Tim Sloan, the former president and chief operating officer of Wells Fargo, now the new CEO and member of the bank’s board of directors, assures us that the cover-up continues. “You should expect more tough headlines, as additional accountability actions occur and other investigations and reviews are completed,” he said. But efforts to actually remedy the thousands, perhaps millions, of customer-facing problems Wells Fargo has caused, and is likely still causing, are stalled. Many may never really be resolved.

Quite frankly, significant outside intervention is needed. The strategy, all too often, chosen by smart, powerful people is: wait out the controversy to see just how little work is really needed. Normally, this strategy would be a career ender for a lot of senior people, as it should be. The clock now ticks on Sloan’s survival.

Five Clear Reasons Why an Outsider Should Be Running Wells Fargo:

First, ask yourself, what was now Chief Executive Officer and President Tim Sloan, who also sits on the board of directors, doing while the thousands, perhaps millions, of fraudulent and deceptive activities were going on during his time as COO? It is likely that he was carrying out the orders of his now departed boss, Mr. Stumpf. They were co-workers for over a decade; were they also co-conspirators, co-predators and co-perpetrators of this scandal?

Second, after 29 years at Wells Fargo, spent mostly in highly sensitive top management positions, how could Sloan, who also oversaw Carrie Tolstedt, have no knowledge of the scandal before it became public? U.S. Senators Warren and Menendez wrote to Wells Fargo to find out. Sloan will, like his predecessor, face the wrath of these congressional committees directly after the presidential election.

Third, his assignment from the board should be: prompt, aggressive, constructive, intensive, visible and meaningful change. Instead, he and the board released a simple 30 second commitment campaign video but have yet to showcase any real change, or publish any data on how the fix is going. They are behaving as though nothing serious happened, allowing a hobbled, damaged, corrupt culture to find ways to prevent solutions and remediation.

Fourth, Sloan’s statement, “there are no quick fixes to our challenges,” must also reflect the board’s position. Clearly his commitment is to change as little as possible, as slowly as he can, for as long as he gets away with it.

Fifth, Sloan’s real number one job is to bust up these cultural barriers and hold those responsible publicly accountable. Yet, his relentlessly self-forgiving, “minimizing the damage” language continues. “We had product sales goals that sometimes resulted in behaviors and practices that did not serve our customers…” Sloan said. Sometimes? How about thousands of times, deceiving and damaging customers.

Where is the bounty hunter program for current and former employees to turn in those they know to be perpetrators? Where’s the whistle blower protection program?

Okay, Okay, Okay. . . What Should Wells Fargo Be Doing?

  1. Stop the stupid stagecoach ads that lie by omission and PR wordsmithing. The ad shows a stagecoach running away with depositor’s money or just running away.
  2. There should be a massive disclosure effort to identify the victims and begin assessing the extent of damages and harm caused. Absent concrete evidence, like positive victim testimonials of bank actions, we have to assume that the damage and deceit simply continues every day. Victims get revictimized through inaction, delay and denial.
  3. There need to be rigorous, even prosecutorial, independent ethics/compliance audits.This should be overseen by a federal prosecuting agency in order to begin to get a handle on the deep-seated ethical problems in this organization’s culture.
  4. The entire management structure of the business, starting with the board, should be replaced. Because of the pervasiveness and in-depth damage that continues to happen, shareholders and depositors should demand this. The idea that a culture can be modified and changed, after this much horrific, leadership-sponsored behavior, is ridiculous. Any good criminologist or attorney knows that if you leave the perpetrators in place, more crime will occur. There has to be intentional, catastrophic intervention to crack the culture of this business.
  5. Include victims in the oversight teams to look over the shoulders of those who, at the moment, say they are trying to fix the damage done.
  6. There needs to be organized, independent, outside oversight with ongoing public disclosure of every aspect of what this company is doing, for quite a long time.

Can Sloan Succeed?

In reality, Mr. Sloan probably has, at maximum, 180 days to achieve enough disruption for some substantial change to begin occurring. As far as I can tell, no such disruptions have occurred, and Mr. Sloan is making alibis, promising that none will occur.  Things will get worse before they get better; Sloan is right about that.

Absent substantial, intentional disruption by a determined change leader, culture resists change, preserves yesterday and prevents the new tomorrow Wells Fargo customers truly deserve.

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