This past week the news hit that Wells Fargo had terminated over 5,300 employees over a two-year period. These people, collectively, had opened over 2 million phony accounts that the company was
collecting fees on. Customers have been scammed millions and the bank is being hit with a $185 million fine as a result.

A memo to employees last week stated, “At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action.” Ok, that’s commendable. But there’s a huge gap here. Who is “we?” Who is taking responsibility? More specifically, where is leadership? This is a major dereliction of duty on the part of senior executives and 5,300 rank-and-file employees seem to be singlehandedly taking the hit for this massive ethical breech.

There are three key points that I want to make:

1. Large Corporations Define Ethical Reality and, hence, Have Responsibilities. In our 21^st century Western society, the corporation is a major definer of ethical standards due, minimally, to their sheer size. In previous centuries it was powerful monarchies and religions that were the defining forces. But with millions of Americans working in these institutions today, the weight of the corporation is indisputable. As a result, they have a responsibility to behave ethically toward their employees, customers, and shareholders. Wells Fargo leadership has failed at this juncture on all fronts.

2. Culture is King! Emotional Process is Powerful! The expectations (read, “culture”) that leadership set were very powerful and drove the behaviors of 5,300 people. Culture can also be viewed through the lens of “emotional process.” That is, when people form into groups or teams, a natural connectivity is created. It is in this context that people engage in various behaviors, often very automatically. I suggest that for many of these people they were simply responding to the emotional tone/pressure from senior leadership; there was not much deliberate thinking about it. Apparently, too, there were specific unethical directives from leaders to employees. This kind of pressure is very hard to resist.

3. Leadership is Always Responsible – Always! Let’s be clear, this kind of breach, and on such a massive scale, does not just happen. If this were a matter of a few random employee mishaps, then leadership might not be quite as culpable. But 5,300 employees over a period of several years!? What are the expectations, spoken and unspoken, that senior leadership set? What have they rewarded? How have they themselves behaved?

Make no mistake, each of these individuals is responsible for his or her actions. AND, leadership set the tone that created this unethical dynamic.

To date, CEO, John Stumpf claims that “There is nothing in our culture, nothing in our vision and values that would support that (unethical behavior).” I categorically disagree.