Magazine article American Banker

Size, 'Siloing' Can Undermine Companies' Culture: Wells' Betsy Duke

Magazine article American Banker

Size, 'Siloing' Can Undermine Companies' Culture: Wells' Betsy Duke

Article excerpt

Byline: Kristin Broughton

Elizabeth "Betsy" Duke, board chair of the scandal-plagued Wells Fargo, said Monday that "siloing" and sheer size are the biggest threats to a company's culture.

Speaking at a conference in New York, Duke, who took over as board chair in January, discussed the experience of leading the San Francisco company amid its recent string of scandals, as well as takeaways for others in the industry.

In her remarks, Duke said that siloing can establish subcultures within a company and prevent leaders from having "single view" of what's happening. In the aftermath of its phony accounts scandal, Wells, which at one time viewed its decentralized structure as a competitive advantage, has taken steps to consolidate a number of its corporate functions, including risk and human resources.

Duke also said that scale can be disruptive to a company's culture. At small community banks, bad conduct can be quickly dealt with, but at larger companies small problems can often fester and become much bigger problems down the road.

"Scale has a lot of very positive impacts on companies, but as companies have gotten larger and larger" problems that emerge are much more visible, Duke said, speaking on a panel discussion on corporate culture at the New York Fed.

"What might be a very tolerable failure rate in a small community bank...if you have that same problem at Wells Fargo, it's going to affect hundreds of thousands of people," she said. …

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