When they’re bad! Wells Fargo paid a fine of $185M, and then clawed back $183M from executives. Who took the biggest hit? The CEO, to the tune of $73,000,000. Ouch.
Most of us cheer when someone who is not us gets hammered for lousy ethical practices. Last year’s big scandal at Wells brought about all this clawing back, but wouldn’t it be better to create a culture that avoids that sort of nonsense in the first place?
Who pays for doing the wrong thing at your place? If it’s a mistake, the owners pay, and that’s the risk business owners take willingly. Mistake should happen at creative, innovative, growing companies. What about willful nonsense like selling fake accounts to unsuspecting customers or purposely fudging product testing (looking at you, VW). Employees who do the dirty deed pay usually, but so do the business owners! So do the families, customers, and suppliers. The cost of ethical breach is enormous (that’s why the media are so happy to pile on and make it worse—bad news sells).
Ultimately, bad ethics are expensive, and we have to be kind of glad. Jail and financial ruin are great motivators, are they not? Not great enough, I guess, since we keep seeing the same crap recycled.
Ethics Award Winning Questions
- As your business becomes more complex, how does your accountability system change?
- Does automation help or hurt your ability to run an ethical company?
- Given the enormous liability, how much risk exposure are you receiving from less robust ethics instruction?