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Incentivising ethics: Lessons from Wells Fargo

Alice Shone | June 6, 2017

At Wells Fargo’s annual shareholder meeting in April, shareholders voted to re-elect all 15 of the bank’s directors—but barely. In a sign of discontent over aggressive sales practices that have cost the bank U.S.$185 million in fines to date, Wells’ chairman was re-elected with only 56 percent of the vote and its head of the risk committee scraped through with only 53 percent. Compared to the 95 percent or more considered normal for corporate elections, the vote was seen as a “stinging rebuke” to the scandal-ridden bank.

The meeting follows a report by Wells’ board, which found that the root cause of the sales practices scandal was the distortion of the bank’s sales culture and performance management system. This, “combined with aggressive sales management, created pressure on employees to sell unwanted or unneeded products to customers and, in some... To get the full story, subscribe now.