OnOctober 12, 2016, the Los Angeles Times published an article titled“John Stumpf`s resignation from Wells Fargo won`t solve the bank`smanagement problem” written by Michael Hiltzik. The article focuseson the managerial problems facing the bank and which ultimately ledto the resignation of the chairman. The bank wishes to put an end tothe scandal affecting its reputation. This scandal saw workers of thebank open fake accounts that impersonated customers. The resignationof Stumpf is also an indication of the reluctance of management toown up to the fiasco. Some recommended changes have followed hisdeparture. One of the changes is the division of chief executive andchairman posts, which previously were held by one individual, Stumpf(Hiltzik, 2016).
Theoutgoing chairman has been replaced by someone familiar with thebank, Stephen W. Sanger, a director at Wells Fargo since 2003. Thisclearly indicates that Sanger has been in the company since theinception of the scandal which commenced in 2011or earlier. He hasearned $1.7 million as salary since 2011. He is a member of some ofthe boards charged with overseeing activities at the company, thehuman resources and risk committees. However, these committees didnot perform their duties as expected. The appointment of Sanger isstill questionable given that the culture of the board in the companycondones the fraudulent activities pursued by employees since nothingwas done as the scandal conceptualized (Hiltzik, 2016).
Thechief executive position was accorded to fifty-six-year-old TimothyJ. Sloan who has been a member of the company for the last twenty-sixyears. There is a possibility that he was part of the people whocondones impunity within the organization. Additionally, it’ssuspected that he has been groomed for this position due to thespeculations that he has been the chosen successor since last year.From this perspective, there are no chances that he would have raisedsuspicion against the scandalous activities at Wells Fargo.
Sloanhas been credited for some negative aspects in the company. He isaccused of being reluctant in talking to investigators in regards tothe scandal. He is also suspected of initiating the exit of CarrieTolstedt who was in charge of the section where the abusestranspired. However, it’s considered premature to appoint Sloan asa replacement for Stumpf due to the former’s controversial role insteering the bank forward to success. According to one analyst, BrianKleinhanzl, Sloan is considered as a non-transformational leader(Hiltzik, 2016). The concept used by the bank in appointments wasunethical given that few people were dismissed and those in lowlevels are elevated.
Thefarewell bid to Stumpf by Wells Fargo was ironical in nature. Thestatement regarded him as a professional and fruitful banker whopropelled the organizations to greater heights. However, thestatement failed to indicate the damage his leadership had caused tothe reputation of the company.
Sadly,the reshuffle at the bank is unlikely to end the negativityassociated with the bank’s customer treatment. According to SherrodBrown, a senator from Ohio, the bank is yet to give satisfactoryrecommendations on how to rectify its misdeeds.
Inconclusion, it is evident from the article that lack of propermanagement within an organization has a higher likelihood of leadingto the downfall of an organization.
Hiltzik,M. (2016, October 12). JohnStumpf`s resignation from Wells Fargo won`t solve the bank`smanagement problem. LosAngeles Times.Retrieved fromhttp://www.latimes.com/business/hiltzik/la-fi-hiltzik-stumpf-resign-20161012-snap-story.html