PRLA Summer 2019

Summer 2019 • PENNSYLVANIA RESTAURANT & LODGING matters •  23 After the scandal over these accounts erupted, the CEO was forced out and was replaced by a veteran employee who was charged with cleaning up the operation and changing the corporate culture. The company has paid, to date, $1.5 billion in fines and penalties and $620 million to settle lawsuits from customers and shareholders. The Federal Reserve has put restrictions on the bank’s ability to grow until it cleans its house. More penalties and lawsuits are likely since additional areas of misconduct have come to light. In late March, the replacement CEO resigned, and Wells Fargo is looking for a new leader from outside the bank. The New York Times has reported that, in a survey of over 27,000 Wells Fargo employees, one of the top concerns was whether the bank conducts its business activities with honesty and integrity and that angry comments have appeared on its internal blog about its leaders’ “doublespeak.” It appears that for any new CEO to be successful in rescuing Wells Fargo, that person is going to have to show strong moral leadership and lead by doing, not just talking. He or she will need to emphasize not only short-term financial performance, but also build long-term relationships with customers by doing the right thing. It has been my experience in working with numerous businesses that employees are very much tuned in to what the people at the top really value in terms of their performance. All the compliance programs in the world will likely not keep a company out of trouble if its leaders send signals that they want certain things at any cost. They can expect that they will get the desired result, but it may well be to the detriment of the organization—turning into one of those situations where people stop and say: “What were they thinking?” Employees who believe their leaders have moral standards and expect the organization to demonstrate that are likely to act in a manner that benefits it in the long term. • If you have any questions concerning this particular subject, please contact Jane G. Davis, Esquire at (jdavis@shumakerwilliams.com ) or 717-848-5134.