CHARACTERISTIC RESULTS OF CORPORATE SCANDAL – WELLS FARGO

During the past year, Wells Fargo has been responding to the fallout of the company’s employees’ adding over 2.1 million accounts without the customers’ knowledge.  Last October, CEO John Stumpf resigned and other high ranking employees were either dismissed or resigned and were replaced.  The company has also agreed to reimburse customers for around $80 million over a similar scandal in its auto lending unit.  But the retribution doesn’t end there.  At its annual meeting in April, 2017 a large majority of shareholders voted against the board of directors – a clear message that blame needed to be shared by this group as well.  The result has been that board chairman Stephen Sanger has indicated that he will step down at the end of the year, as will two other directors, Susan Swanson and Cynthia Milligan both of whom joined the board in the 1990’s.  Elizabeth Duke, former Federal Reserve governor, has been selected to succeed Sanger.  In the world of business, these actions are seen as reasonable and appropriate.  Business organizations are known for their ability to act quickly to rectify malpractice and misconduct.  Their bottom lines, after all, are tied to the quick and effective responses.  Contrast these actions of Wells Fargo to those issues relating to misconduct in governments:  At the one-year mark, the matters would still be in the “discussion stages;” certainly not in the action and remedy stages.  It is always the hope – and even the expectation – that government will adopt a more business-like approach, even if it means giving up some of the “treasured” processes of the past.

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