John Stumph, former CEO of Wells Fargo, is a shining example of what not to do in case of a corporate breakdown. According to Mark Zokle, Stumph’s actions were not only cowardly, but also very telling of a corporate culture riddled with a lack of real leadership.
For those not familiar with the very public breakdown of the financial giant, Wells Fargo recently settled a case with regulators over accusations that 5,000 of its employees had generated up to 2 million fake accounts. Mark Zokle explains that these “ghost accounts” were an effort to appease unrealistic sales goals handed down to the lower ranks by upper management.
According to Mark Zokle, then-CEO John Stumph refused to take responsibility for the actions of his employees. Stumph was made aware of the problem in the months – and possibly in the years – prior to the scandal’s revelation in September of 2016. Stumph, who has since resigned, has faced harsh criticism from other financial leaders, as well as politicians fed up with the actions of the “Big Four” in the banking industry, reports Mark Zokle.
Forbes.com contributor and attorney Erika Kelton asserted that Stumph’s loyalties, “lie(s) with himself and others in the executive suite – not his frontline employees…”
Mark Zokle points out that Wells Fargo has suffered a major hit in light of the fraud. As of November 2017, the number of new accounts opened at the bank’s 6,300 branches had dropped by 44% when compared to 2016. Stumph has been replaced with Tim Sloan, who has stated publicly that his primary objective as CEO is to restore trust to both current and future Wells Fargo customers.
Could this have been avoided? Is Stumph truly responsible for the actions of 5,000 people he likely never met? Zokle says “yes” to both questions. If Stumph had proactively managed corporate policies before the breakdown and taken steps to ensure Wells Fargo employees were not forced into awkward sales goals, things might be much different for the San Francisco based corporation.