Key Lessons for Business Leaders from the Wells Fargo Scandal
The Wells Fargo scandal has valuable lessons for leaders regarding corporate governance and human resources. First, this situation justifies the need for management to create strong corporate ethics. This is necessary so that all employees know and understand that specific rules of conduct cannot be violated (Ragothman et al., 2022). In addition, to ensure the company’s prosperity, leaders must know effective methods of managing the team instead of pushing the blame on them, as in Wells Fargo. The third lesson for leaders is to regularly review their incentive strategies to ensure that employees do not use incorrect methods to make a profit.
Preventative Measures Wells Fargo Could Have Taken
Wells Fargo could revise its incentives and install a new customer-centric system to avert a crisis. This would avoid the fact that employees create many accounts themselves. The company would instead attract real customers with its approach. In addition, more reliable employee monitoring tools could make a difference because then management could understand where many fake accounts are coming from (Ragothman et al., 2022)—internal audits and constant monitoring that would not discomfort employees could significantly improve the situation.
Modeling Ethical Behavior to Foster Organizational Integrity
Leaders can model employees’ behavior by setting an example. If the company’s employees knew that the rules were equal for everyone, they would be able to adapt to the requirements more easily and be pleased to follow them (Ragothman et al., 2022). In addition, such a strategy would create a more friendly atmosphere where employees could share current problems, and the leader could help resolve them. Another way could be to draw up a code of ethics that could be a handy book for all employees. This would ensure a better knowledge of the rules and their adherence.
Reference
Ragothman, S., Custis, T., & Christianson, M. (2022). Fake accounts scandal at Wells Fargo: What are the lessons? Journal of Forensic and Investigative Accounting, 14(2). Web.