Ethics And Compliance Training: What We Can Learn From The Wells Fargo Case
The Wells Fargo Scandal, in which more than 2 million bank accounts or credit cards were opened or applied for without customers’ knowledge or permission between May 2011 and July 2015, is the latest example of corporate ethics gone astray. And yet, like all U.S. financial institutions, Wells Fargo provided Ethics and Compliance training to their employees, in the form of written documentation and videos, like the one recently mentioned on John Oliver's television show.
No doubt, there were other training vehicles used to get the message across; these examples are just a few that are publicly available on the internet. Wells Fargo, like most financial institutions, provided seminars, web based training, and other types of formalized reinforcement of its stated ethics policies.
So what happened? Was this a huge failure of training? Well, yes, and no.
You Can Lead An Employee To Compliance Training, But You Can’t Override Culture
The training itself wasn't the problem. As the video clip shown by John Oliver demonstrates, the production values were high, and Wells Fargo no doubt made a significant investment to produce and deploy the content. The problem was that the training didn't exist in a vacuum. As we now know, there was a profound disconnect between what the organization said to its employees and the way that its leaders and managers actually behaved.
Changes are, the training didn't specifically say "Hey there! Don't open phony accounts on behalf of our customers”. And, in our current climate of deflecting criticism by blaming others, this could open up the specious argument that the training wasn't specific enough. But, seriously, if the standard is that ethics training needs to proactively warn against every conceivable violation of ethics that could possibly exist, then no training will ever be able to meet that standard.
Imagine the impact to our legal system if fundamental premises like the illegality of theft became null, unless codified by the specific type of item stolen, the time of day that the theft occurred, the type of shoes worn by the suspect, and on to infinity.
According to the New York Times, employees who were interviewed said “They warned us about this type of behavior and said ‘You must report it’, but the reality was that people had to meet their goals. They needed a paycheck.”
National Public Radio spoke with former employees who worked at Wells Fargo in San Francisco between the years 2004 and 2011. And they all said a pressure-cooker sales environment at the bank pushed some of their co-workers to deceive customers.
The Importance Of Aligning Ethics And Compliance Training With Company Culture
None of this should be a surprise. Compliance training is a reasonable way for companies in regulated industries to communicate their expectations to employees, and to document that they have done so when queried by various government agencies. It isn't always fun for employees to take the training, but even the most jaded worker typically understands the need to be made aware of the rules and regulations that relate to their particular industry.
However, if the company culture does not support the values espoused in the training, the entire exercise is a waste of time. Employees adapt to the world around them. They either “go with the flow” or if they can't; they leave. If the “flow” at Wells Fargo meant opening fake accounts for customers in order to meet sales goals, then that’s what employees did. Folks who need their jobs will pretty much do whatever it takes to survive; this is purely human nature.
So, What's The Solution?
Well, no surprises here either, it starts at the top. If executives are genuinely interested in avoiding ethical breaches, then they need to be proactive in communicating with their management teams to make it clear that they’re serious about what is being taught to the rank-and-file. Leaders need to get out of their offices and talk to their employees – find out if the reality on the ground matches up with what is being espoused by the training department. They need to be visibly engaged in maintaining an ethical culture.
If leadership values and management practices are aligned, this effort will be a success. If problems are discovered and dealt with in a transparent manner, the effort will also be a success. If problems are discovered and ignored, or if the disconnect originates at the top, then no amount of training will solve the problem. Ever.
