The Divorce of Reward and Responsibility

One of the problems that we face in recent years in the United States is that responsibility and the rewards of managing it well have been completely separated.  This was called to my attention most recently with the Wells Fargo and the testimony by Stumpf.

What I’ve seen of it is that the CEO and upper management at the bank get millions in bonuses, while the employees at the bottom were creating fraudulent accounts that no consumer actually wanted, and charging them fees for it.  Whenever he was questioned about it, Stumpf (the CEO of Wells Fargo) insisted he did not know about it.

It does not make sense to me that CEOs in this country can claim that they are worth many millions of dollars, sometimes getting paid more than the US collects in taxes from the same company, and yet somehow do not have any information on the details of anything happening within the company.

It cannot be both ways.  Either a CEO is fully capable of understanding and running their business, and from their privileged position gets to make enormous amounts of money – or (more likely, in from my perspective) CEOs are abusing their position of power to pocket enormous sums of money which they absolutely do not deserve to be getting.

There were thousands of employees fired, but they were all at the lowest level of the bank.  These were employees with virtually no ability to make decisions regarding their jobs – they follow instructions, but don’t set policy.  Having widespread problems like we have seen here implies that the problem is not at the lowest level, with the workers, but somewhere higher up in management.

When it comes to getting a paycheck, our country embraces the idea that the person at the top is the one who makes things happen and deserves to reap the rewards of their vision and skills.  However, when it is time to take responsibility for wrongdoing within the company, these same masters of their domain are suddenly ignorant of everything taking place under their watch, and they should not be held accountable for things they did not know about.

I think the solution to this problem is actually simple:  stop excusing the kind of neglect that would be implied by this denial.  If you are the boss, it is your job to know what the people who work under you are doing.  “I didn’t know” implies that these leaders aren’t doing their jobs, and part of the job of the boss is to make sure that the law isn’t being broken by their employees on a daily basis.  Especially when it is so clear that management is the slave driver demanding the unethical action from their employees, they must be the ones held accountable when their actions are uncovered.

We cannot hold individual agents completely and soley responsible for the actions they take under the direction of their management.  It is almost as if the country learned the wrong lesson from the Nuremberg trials.  Yes, if you are “just following orders”, you are still guilty for what you did – but your commander was also guilty for ordering you to do wrong.  What we are seeing here in the United States would be like condemning the individual soldiers in the Nazi army for their war crimes, while deciding that Hitler and his generals were somehow not responsible for any of it just because he denies any knowledge.


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