The Power of Trust by Sandra J. Sucher & Shalene Gupta

Author:Sandra J. Sucher & Shalene Gupta [Sucher, Sandra J. & Gupta, Shalene]
Language: eng
Format: epub
Publisher: PublicAffairs
Published: 2021-07-06T00:00:00+00:00

Check: Not All Impacts Are Created Equal

The third step is to check that your impact actually benefits the people you claim to serve. It’s easy to declare that a company wants to make a difference, but the proof is in how employees, customers, suppliers, investors, regulators, and the public experience a company’s actions. This is a startlingly simple concept, but the discrepancy between what companies say they want to do and what they actually do can be shockingly large.

Take, for example, Wells Fargo. Wells Fargo’s vision statement is “to satisfy our customers’ financial needs and help them succeed financially.”91 Wonderful! Except, how to explain Wells Fargo’s now notorious fake account scandal? From 2002 to 2016 (yes, that is a period of fourteen years), employees opened some 3.5 million accounts that were not authorized by their customers.92 Employees reported that they felt they had no other option except to cheat, if they wanted to keep their jobs.93 At one Wells Fargo branch employees reported they’d been told to hit the targets or risk getting transferred to a store “where someone had been shot and killed.”94 A former war veteran wrote to the then CEO, John Stumpf, saying a war zone was actually less stressful than Wells Fargo: and indeed between 2011 and 2016, Wells Fargo fired over 8,000 people for “subpar” sales.95 It’s no surprise that fake new accounts kept getting opened by the remaining employees who were desperate to keep their jobs.

The fake accounts had devastating ripple effects on customers. In some cases, the new account had annual fees, but since customers didn’t know about the accounts, they didn’t pay them and their credit scores took a hit. In other cases, Wells Fargo employees transferred money from existing customer accounts to cover the fees associated with the new account, which resulted in insufficient funds notices that resulted in further fees. Credit scores are scanned by landlords, and someone with several overdraft fees from unauthorized accounts could have trouble moving to the apartment of their choice.96 To make matters worse (and in violation of their fiduciary duties), investors were fed false information about the company, because the fake accounts made its performance appear to be far stronger than it really was. And once the company’s sales practices came under scrutiny, executives tried to hide the fraud by changing the description of what sales associates were being asked to do.97

Like Volkswagen, Wells Fargo did the opposite of what it claimed. Nick Hanna, the US attorney for the Central District of California, called the company’s fraud “a complete failure of leadership at multiple levels within the bank.”98 (And in a rare note of poetic justice, CEO John Stumpf was fined $17.5 million and banned from the banking industry, while five other executives were also slammed with fines.)99

Now, Wells Fargo is an extreme example. It was practicing out and out fraud that was baked into its entire system. There are also cases where companies don’t practice fraud, but the “good impact” they imagine they

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