You Can Lead An Employee To Compliance Training, But You Can’t Override Culture
The Wells Fargo Scandal, in which more than 2 million bank accounts or credit cards were opened or applied for without customers’ knowledge or permission between May 2011 and July 2015, is now firmly in our collective rear view mirror. It certainly isn't the only ethics scandal that one could point to, but it served as a bellwether for corporate ethics gone astray. The story remains in the news, as it now appears that in response to the scandal, particular government regulations designed to prohibit extraordinary payouts ("Golden Parachutes") to senior executives making a hasty exit, are now preventing rank-and-file employees leaving the bank as part of the normal course of business from receiving expected severance payments. This scandal is clearly the gift that keeps on giving.
And yet, like all U.S. financial institutions, Wells Fargo provided Ethics and Compliance training to their employees, in the form of written documentation and videos.
No doubt, there were other training vehicles used to get the message across; these examples are just a few that are publicly available on the internet. Wells Fargo, like most financial institutions, provided seminars, web based training, and other types of formalized reinforcement of its stated ethics policies. So what happened? Was this a huge failure of training? Well, yes, and no.
The training itself wasn't the problem. The problem was that the training didn't exist in a vacuum. As we now know, there was a profound disconnect between what the organization said to its employees and the way that its leaders and managers actually behaved.
Changes are, the training didn't specifically say "Hey there! Don't open phony accounts on behalf of our customers”. And, in our current climate of deflecting criticism by blaming others, this could open up the specious argument that the training wasn't specific enough. But, seriously, if the standard is that ethics training needs to proactively warn against every conceivable violation of ethics that could possibly exist, then no training will ever be able to meet that standard.
According to the New York Times, employees who were interviewed said “They warned us about this type of behavior and said ‘You must report it’, but the reality was that people had to meet their goals. They needed a paycheck.”
And Now, A Shift in Policy
Bear in mind that the climate leading up to this scandal flourished during a ramp-up of federal regulations imposed on the financial sector. Companies have to comply with regulations, and so - training was created to document that employees were being properly trained.
But now, the regulatory agencies are under new leadership and regulation has fallen out of favor. What will this bring in terms of company culture if explicit prohibitions against deceptive practices are removed? Imagine the impact to our legal system if fundamental premises like the illegality of blatant misrepresentation or theft became null.
How will senior leaders react if given free rein to make a profit without constraint? How will that ripple down the food chain, and how will it impact the content of training?
As with everything else, it starts at the top. If executives are genuinely interested in avoiding ethical breaches - regardless of the existence or lack of regulatory constraints, then they need to be proactive in communicating with their management teams to make it clear that they’re serious about what is being taught to the rank-and-file.
If executives are inclined to value profit over ethics, and the government looks the other way - it's basically game-over for ethics training, because really ... why bother?
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