Billionaire and legendary investor William Buffet had some scathing words this week for former Wells Fargo CEO John Stumpf. Buffet – who happens to be the bank’s biggest shareholder — said he couldn’t explain why Stumpf failed to take action in the face of evidence that the bank’s high-pressure culture had created widespread fraud.
“John Stumpf is a perfectly decent guy in my opinion,” Buffett told CNBC. “But somehow, when he saw the evidence, he didn’t do something about it. Maybe he thought somebody else was going to do something about it.”
Just who would that “somebody else” have been? This one’s a head-scratcher. Clearly Wells Fargo lacked more than “tone at the top.” It seems the company – whose reputation is now in shambles – lacked trust at the top.
As an executive recruiter specializing in hiring Chief Compliance Officers, I can tell you that today’s compliance professionals are keenly aware of how critical trust is to a strong compliance and ethics program. And I’m referring to cultivating trust at all levels: between management and employees and between the company and its shareholders and customers.
We can’t pinpoint the exact moment when trust began to erode at Wells Fargo, but we can see the damage to the company’s reputation. Wells Fargo violated their customers’ trust and will pay a heavy price indeed.
If repairing your organization’s trust with stakeholders – or building it from scratch – is on the agenda, I recommend The Principles of Trust and the Evolution of Trust. The report, recently published by PwC, is available as a free download from Corporate Compliance Insights.
Here’s PwC’s description of the report:
Different mechanisms can help cultivate trust, and it’s important to understand the principles of trust that hold societies together and learn from events that triggered the creation of these mechanisms. When trust has been fractured in the past, the mechanisms that emerged in response to breakdowns often aligned with one or more of these principles.