Evaluation of a business code of ethics

¶ … Business Code of Ethics

Wells Fargo Ethical Statement

Ethical Violations

Culture Speculations

This paper discusses the ethical code and policy of Wells Fargo financial institution. Wells Fargo is a major player in the financial services industry and offers six thousand six hundred fifty retail branches; which are comprised of banking and mortgage establishments that service over forty eight million customers. Wells Fargo is also considered to be one of the big four banks in the United States; the other three are Bank of America, Citigroup, and JP Morgan Chase.

Wells Fargo foregoes the standard mission statement in the "about us" section of their website. Instead, they choose to focus on the vision statement and where they are going. Wells Fargo vision statement is fairly lengthy when compared to other organizations and reads like an article than the more conventional approaches. It seems however that Wells Fargo's vision can be condensed into this one basic statement; "We want to satisfy all our customers' financial needs and help them succeed financially." Furthermore, the organizations basic strategy seems to be position themselves in all of the market segments related to financial services and continue growing through both expansion and acquisition.

Wells Fargo Ethical Statement

Wells Fargo publishes several different versions of its ethical codes that are targeted for different roles within the organization. For example, there is one detailed ethical code provided for all Wells Fargo's employees and there is another for the company's directors. The most general statement about ethics that Wells Fargo publishes is this statement:

Wells Fargo expects its team members to adhere to the highest possible standards of ethics and business conduct with customers, team members, stockholders and the communities it serves, and to comply with all applicable laws, rules and regulations that govern our businesses. The Code of Ethics and Business Conduct sets forth Wells Fargo's policy and standards concerning ethical conduct for all team members. Our aim is to promote an atmosphere in which ethical behavior is well recognized as a priority and practiced.

This statement has several interesting items contained in it. Since Wells Fargo operates in the financial services industry, the statement clearly references laws, rules, and regulations. This represents a reactive approach to an ethical system. Although it is important to comply with all laws, rules, and regulations, this represents the minimal level of an ethical system; compliance. Much of the focus is upon not getting in trouble as opposed to upholding a higher ethical code.

Another item that a careful observer might catch is the use of the word aim. This verbiage is incredibly weak. It is reasonable to believe that Wells Fargo's employees put much time and effort into selecting the words for the ethical code. The fact that they chose that particular word could possibly represent an insight into Wells Fargo's level of dedication to the statement. For example, if the statement would have read something like, "we are determined to create and uphold" as opposed to "our aim is to promote" then it statement would be more powerful. This may or may not be reflective of Wells Fargo's true stance, but it does spark some curiosity about the chosen verbiage.

The longer, more end-user specific, ethical statements also follow the reactive trend of not getting into trouble. The main themes that run through the length of the statement include items such as compliance, reporting, confidentiality, and other procedural items. There is no mention of any higher level ethical ideals and is composed primarily of transactional or procedural items.

One item of interest found in the employees ethical code published by Wells Fargo, is that they have established what they call EthicsLine. This allows employees to contact an investigator (employed by Wells Fargo) to report any violations of the ethics code. The line is anonymous under most circumstances; only reports that involve criminal activity are require that the caller states any personal information. This allows employees an avenue to report any unethical behavior safely. This is extraordinarily efficient way to promote ethical behavior. However, Wells Fargo did not implement this item by choice; it is now required by corporations by comply with the Sarbanes-Oxley Act of 2006. Therefore, it is unclear if Wells Fargo would have this option if it was not required of them.

Ethical Violations

Wells Fargo has been accused of unethical behavior frequently throughout the last decade. Most recently, there have been numerous complaints about predatory lending practices. The web is flooded with allegations of examples of predatory lending and since Wells Fargo is the largest mortgage lender in the country is certainly not exempt from these allegations. Watchdog groups such as the Inner City Press (ICP) document many of the resulting laws suits. One law suit in Baltimore, and another in Memphis, alleges that Wells Fargo charged high interest rates to people of color; they call them "ghetto loans."

Another interesting development listed on the ICP website is Wells Fargo's refusal to provide the State of California any assistance with its current financial crisis. This is fairly ironic for two reasons. The first is that Wells Fargo received a federal bailout in the mortgage crisis. The other is that California has leverage over Wells Fargo because it is in California's jurisdiction. However, when Wells Fargo was confronted with the issue they threatened to fill a lawsuit.

Culture Speculations