Board and Management Face Frustrated Investors Seeking Systemic Culture Change and ‘Operationalization’ of its Vision and Values Statement.
NEW YORK, NY – TUESDAY, APRIL 25TH, 2017 - At its shareholder meeting in Jacksonville, FL this morning, investors in Wells Fargo did little to conceal their frustration with management and the board at the bank’s collective failure of oversight during the unauthorized accounts scandal.
One investor after another decried what they characterized as a “failed culture” led by board members and executives who were passive during one of the largest U.S. consumer banking scandals, including the opening of over 2 million unauthorized accounts, and resulting in an historic penalty of $185 million from the Consumer Financial Protection Bureau.
Shareholders were adamant that the bank would have to go further than issuing public papers like its Vision and Values statement; it would need to authentically implement these principles into its day to day business if customer and shareholder trust is to be restored.
A resolution submitted by ICCR members requesting a Review of Business Standards received 22% of the vote, which is significant for a shareholder-sponsored resolution and the strongest result of the shareholder-sponsored resolutions on the proxy.
Said Sr. Nora Nash of the Sisters of St. Francis of Philadelphia, who presented the resolution at this morning’s meeting, “Shareholders remain concerned about the long-term viability of the company and look beyond the annual meeting for urgent remediation for customers and a full commitment to ethics, values, principles and risk management structures. We seek metrics, assessments, and qualitative and quantitative data that will assure shareholders that corporate responsibility is embedded throughout the company so that the rebuilding of trust can begin.”
"Wells Fargo received a clear message from shareholders at today’s meeting – investors want more accountability and action. The shareholder proposal filed by ICCR members shaped the narrative at the meeting and effectively pushed the company to take significant steps, meeting many of the resolution’s requests. Yet more substantial action is needed to address the serious discontent among aggrieved customers and employees, rebuild trust and make meaningful changes to put customers first. ICCR members will continue our engagement with management to press for the systemic changes requested in our proposal," said Mary Beth Gallagher, Executive Director of the Tri-State Coalition for Responsible Investment.
"While we're disappointed that shareholder resolution #5 was not approved today, we also saw an unprecedented level of engagement by shareholders, including by CalPERS and CalSTRS, who voted for this resolution and who voted against a number of the board members. Shareholders are clearly frustrated about the fraud the bank has committed against its customers, its countless settlements with regulators, and costly legal bills. To rebuild trust with customers and communities, Wells needs to change from the inside out. Systems, practices, and the bank's overall culture need to be overhauled and the bank must be transparent about how it's working to prevent this from happening again," explains Paulina Gonzalez, executive director of the California Reinvestment Coalition.
“Today’s votes demonstrate that the Wells Fargo board and management have a long way to go to regain the trust of customers and shareholders who were harmed by the company’s widespread fraud,” said Rhode Island Treasurer Seth Magaziner. “Going forward, we strongly encourage board members to work with concerned shareholders to develop a real strategy for addressing the corporate culture that allowed these abuses to take place.”
Susana McDermott, Director of Communications, ICCR
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 46th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300 member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $200 billion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability on questions such as climate change, corporate water stewardship, sustainable food production, human trafficking and slavery in global supply chains and increased access to financial and health care services for communities in need. www.iccr.org