The Wells Fargo Cross-Selling Scandal

In this Closer Look, we examine the tensions between corporate culture, financial incentives, and employee conduct as illustrated by the Wells Fargo cross-selling scandal. In 2016, Wells Fargo admitted that employees had opened as many as 2 million accounts without customer authorization over a five-year period. We discuss the factors that contributed to the scandal, the repercussions for the bank, and its response.

We ask:

• How did the company’s incentive system contribute to the scandal?
• Would the system have worked better if coupled with additional metrics or controls?
• What systems should have been put in place to identify and escalate potential problems earlier?
• What steps should senior management have taken to better contain the fallout?
• Is an inside or outside CEO successor better positioned to help the bank recover?
• How do you maximize the positive contribution that incentives make to culture while minimizing potentially negative outcomes?