Can honesty be rewarded at banks?

One overlooked lesson from the Wells Fargo bank scandal needs more attention: Banks must hire, train, and encourage workers with high moral reasoning. In Wells Fargo, such workers were the real heroes. 

AP Photo
Ruth Landaverde, a former worker at Wells Fargo and Bank of America, holds documents supporting her allegations of unrealistic bank sales goals at her home in Glendale, Calif. Regulators slapped Wells Fargo bank with $185 million in fines.

Honesty is not only its own reward. It can also work wonders in cleaning up the financial industry.

At Wells Fargo bank, the honesty of some employees led them to oppose – and then expose – a deceptive practice that had lasted for years at the bank: the fraudulent opening of deposit and credit-card accounts for customers without their knowledge.

By sticking to their principles despite pressure to show they had sold new products, these employees have helped awaken Americans and regulators to two important tasks: Banks must make sure they hire people of high integrity and also ensure employees have a safe outlet to report wrongdoing.

Much of the debate about the Wells Fargo scandal has rightly focused on whether to punish top managers, how to make amends to customers who suffered financially, and how to improve the bank’s ability to manage risks to its operations. Yet at a Sept. 20 hearing before Congress, regulators admitted they face an uphill battle to help create an ethical culture within banks.

Ethical codes are not enough. Simply holding banks accountable for deceit or harmful incentives is not enough. And in Wells Fargo’s case, even having an anonymous tip line for employees to an outside party was not enough.

Somehow banks must hire, train, and encourage workers with high moral reasoning. An affirmative culture is far better than a defensive one. At the hearing on Capitol Hill, Sen. Tim Scott (R) of South Carolina suggested to John Stumpf, the chairman and chief executive officer of Wells Fargo, that the bank must empower employees to come forward if they spot dishonesty. Examples of such honesty, he said, can work as a model for others in the industry to do things right.

Better yet, as part of its internal reform, Wells Fargo can ask those employees who challenged the unethical culture to share what motivated them not to participate. The pressure from management to open multiple accounts for existing customers was high. But the employees’ own standards were able to withstand such pressure and, in many cases, push them to work for change. Many of them went to court, to the press, and to regulators to seek reform.

Wells Fargo has ended the compensative incentives for workers to open new accounts. Yet banks in general may still fall into the trap of reaching for profits at the expense of customers and the integrity of employees. The best guard against such lapses is a vigilance to find and reward honesty in the nation’s 1.7 million bank workers. 

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.