Friday, 14 October 2016
This little light of mine.
I received one of those emails from Nigeria announcing that I had won a lottery. All I needed to do was to send $1000 in advance to cover the legal charges and then the millions would be deposited to my account.
Like most other ‘winners’, this email went straight to the trash file. I recognized the poorly disguised attempt at a cash grab. In North America we call it fraud. Elsewhere it may be considered business as usual or simply buyer beware. If the perpetrators were found here, the full weight of the law would punish with both hefty fines and significant jail time.
I read about the issue at Wells Fargo Bank and the creation of thousands of fake accounts and credit cards. Apparently there was a serious executive driven mandate to grow ‘sales’ and this led to the unauthorized creation of these accounts. Management and executives knew about the practices but used the statistics to convince the stock market and other shareholders that the strategic plans that they had put in place were exceeding expectations. As you might expect, the stock value responded well to these representations and those in positions of authority were richly rewarded.
When this issue came fully to light, over 5000 employees were dismissed for their roles in the fake account scandal. Subsequently, the President of the retail branch and the corporate CEO have been forced out. Sadly they have had to forfeit $19 million and $40 million respectively in bonuses earned on the basis of these fake accounts. Both will still leave their positions with compensation packages that exceed $100 million so there will be no need for tag sales to support their retirement.
Help me understand the difference? In Case A, the actions, while unscrupulous, are done in such an unsophisticated manner that the likelihood for any substantial success was relatively low. Yet we would have no difficulty in prosecuting those behind the scam if we could manage to get them into our jurisdiction.
In Case B, the actions were systemic and clearly designed to deceive even sophisticated investors. The ultimate beneficiaries were those already receiving outrageous compensation packages. And yet, just as during the financial meltdown that precipitated the current economic malaise in which we find ourselves, the real criminals are being allowed to walk away free and unfettered; reputations may be tarnished but bank accounts are preserved.
The US election is demonstrating just how tired voters are of the political ‘establishment’ and the entitlement attitude that prevails in Washington. It will be interesting to see how much longer it takes for the same level of disenchantment to take hold in the corporate world before these fraudulent ‘leaders’ are treated like the common criminals that they really are. From my perspective it is long past time.
Positions of authority come first and foremost with a higher degree of accountability. I don’t discriminate this level of accountability on the basis of your scope of responsibility. If you lead a team or a division or a company, you are still in a greater position of influence than those who report to you. Your conduct is always the gold standard for them.
Poor examples abound. Use your opportunity to shine. We need more lights in this area that is too poorly lit by the entitled.