Wells Fargo's CEO is mindful that he's still in clean-up mode. Timothy J. Sloan took the CEO role in October of 2016, weeks after the company made international headlines for playing fast and loose with customers' privacy and finances. Three and a half million accounts were opened fraudulently, thanks to an overly-aggressive culture of sales and untenable "cross-selling" targets. It's going to be a while before the banking giant fully recovers its reputation as a small town bank.
That's why Sloan, the company's former COO and CFO, beat the drum of rebuilding customer trust when he took the stage at last week's CECP CEO Investor Forum in San Francisco. Sloan was frank about the steps he and the board are taking to reset the corporate culture to focus on customer needs. And those changes start at the top: with the board of directors. The board has six new members since 2016—over 1/3 of the total membership has been refreshed—and new board members bring new attention to the matters that matter now for Wells Fargo: risk management, human capital management, consumers and corporate social responsibility, alongside technology, regulation, finance and accounting. The board has enhanced risk oversight, governance and human resources, with refreshed leadership in these subcommittees. The bank is betting that better governance, slowly but surely, is one key to shoring up operations. The company also formed a stakeholder advisory council in December of 2017, which includes seven external members representing consumer rights, fair lending, environmental, human and civil rights. “It’s amazing what you find out when you ask and listen,” Sloan said. Integration of human resources, employee engagement, risk management—under the corporate sustainability umbrella or not—will be key to a financially healthy future for the company.
When asked by BlackRock about employee engagement and talent retention, Sloan turned to the data: "The best measure of engagement is the number of applications and retention rates. With surveys, employees might tell you what you want to hear, but people don’t lie with their feet." New efforts to support employees seem to be working—team member turnover is down to lowest level since 2013.
Sloan was also quick to highlight the firm's investment in equity projects:
- 15.8K low income homeowners “created’ through $372 million in down payment assistance from wells fargo LIFT programs since 2012
- 15% of controllable spending with diverse suppliers by 2020 (at 11% right now)
- $73B provided in new purchase loans to minority households
- $28.9B in new purchase loans to low-moderate income households.
And the big announcement of the day: By 2030 Wells Fargo will provide $200B in financing to sustainable business, with more than 50 percent focused on clean technology and renewable energy transactions that support to low carbon economy. While this announcement didn't overtake the same-day news break that Wells Fargo would be subject to a $1 billion fine, it did show the world that Wells Fargo is committed to charting a new path forward, without forgetting the sins of the past.
Jen Boynton is the former Editor-in-Chief of TriplePundit. She has an MBA in Sustainable Management from the Presidio Graduate School and has helped organizations including SAP, PwC and Fair Trade USA with their sustainability communications messaging. She is based in San Diego, California. When she's not at work, she volunteers as a CASA (court appointed special advocate) for children in the foster care system. She enjoys losing fights with toddlers and eating toast scraps. She lives with her family in sunny San Diego.