How nuns got Wells Fargo to address its ethical lapses

Group of investors withdraws a shareholder proposal after bank agrees to prepare report on root causes of its scandal

Mar 6, 2018 @ 3:49 pm

By Bloomberg News

Wells Fargo & Co. agreed to publicly report on the root causes that led to a rash of ethical lapses in recent years, a group of investors said.

The group, led by the Interfaith Center on Corporate Responsibility and including about 20 religious organizations as well as state officials from Rhode Island and Connecticut, said Tuesday they would withdraw a shareholder proposal on the issue following the bank's decision. They had sought to put it to a vote at the lender's annual meeting in April.

"They were in a culture where they believed their vision and values have carried them for the past 30 years and were continuing to carry them," said Sister Nora Nash, who oversees retirement funds for Sisters of St. Francis of Philadelphia, which led the proposal. "Obviously, there was tremendous risk in their culture, and we need to take a serious look at the code of ethics, accountability and really look at the needs of the customer and community."

The investors asked Wells Fargo to produce evidence that its incentive programs are aligned with clients' interests. They also asked the lender to report on how it is strengthening risk management and controls to prevent such lapses.

'First Step'

"Wells Fargo has agreed to prepare and publish a business standards report on our website," Ancel Martinez, a spokesman for the San Francisco-based bank, said in an emailed statement. "We look forward to continuing to work with the members of the Interfaith Center on Corporate Responsibility."

Rhode Island Treasurer Seth Magaziner, who oversees the state's public pension fund, called the bank's decision "a first step toward changing the culture at Wells Fargo that harmed a lot of customers and shareholders."

Wells Fargo has yet to put behind it 18 months of scandal in its retail banking business, where employees under pressure to meet aggressive sales goals may have opened millions of accounts in customers' names without permission. The bank has said it's facing at least three major probes, including one by the U.S. Department of Justice.

Separately, Well Fargo agreed this week to put a shareholder proposal on its proxy ballot from the New York State Common Retirement Fund that seeks more information about employee incentives beyond its executive officers, according to correspondence with the U.S. Securities and Exchange Commission.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Financial advisers highlight solutions to increase diversity and inclusion

These Excellence in Diversity & Inclusion award winners suggest short-term changes to help foster D&I in the financial advice profession.

Latest news & opinion

7 things advisers should do today to boost diversity and inclusion

Creating diversity and inclusion within financial advice firms is challenging, but these InvestmentNews Excellence in Diversity & Inclusion award winners have suggestions that firms can put into practice today

The midterm elections: What's at stake for financial advisers

A shift in control of the House could change the course of important issues, including the SEC advice rule, tax reform and retirement policies.

What to tell your clients after they've won the lottery

The current combined Mega Millions and Powerball jackpots are more than $850 million. What should you tell your clients if they have a winning ticket?

2019 Medicare premiums announced

Slight increase in Part B premium to $135.50 per month is in line with expectations.

7 ways states got tough with unregistered individuals and firms in 2017

Rise in digital currency frauds helped trigger a crackdown by state regulators.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print