The Man From FCPA has long railed against the ‘Myth of the Rogue’ employee. Other commentators say is it simply unfair to punish a lillier-than-white corporation for the actions of a few employees, usually at disparate locations scattered across the globe, for actions in which the corporation profits. However, I now understand why it is always the employees fault when a corporation engages in fraudulent activity leading to regulatory fallout. The CEO of Wells Fargo has explained it to me.
In an interview for an article in the Wall Street Journal, Wells Fargo CEO John Stumpf explained that it was the fault of the over 5,300 rogue employees who engaged in the fraudulent conduct of opening over 2 million unauthorized accounts, not the bank, not the board, and certainly senior management. We know the number of rogue employees involved because this was the number of rogue employees who were terminated for being involved in the scandal. It was fully 2 percent of the bank’s entire employee base. But not to worry about the propriety of the board or senior management. No one from those levels was terminated as a result of the actions of a mere 5300 rogue employees.
You have to admire CEO Stumpf, blaming the lowly bank branch managers and account executives who dreamed up the illegal scam and then executed it, all without any knowledge of senior management. Stumpf made clear he never told anyone to break the law to make money and any incentives in place which led (with a wink and a nod) to nefarious actions were certainly not the responsibility of senior management or the bank.
In his WSJ interview Stump said, “who we fired, terminated, in no way reflects our culture nor reflects the great work the other vast majority of the people do.” The Man From FCPA is so inspired by this statement and this type of leadership he is considering opening an account at Wells Fargo, but only if he can be assured that one of the halo-wearing senior management types would handle the account, just in case there are more than only 5300 rogue employees at the bank.