Wells Fargo & Co. agreed to publish a report on the root causes of unethical and illegal behavior at the bank and its impact on customers and investors after a group of institutional investors jointly filed a shareholder proposal demanding a comprehensive review of its business standards.
The shareholder proposal has been filed every year since 2014 by The Sisters of St. Francis of Philadelphia. The investors who co-filed the proposal include Rhode Island Treasurer Seth Magaziner, who oversees the $8 billion Rhode Island Employees' Retirement System, Providence, and Connecticut Treasurer Denise Nappier, who oversees the $34.2 billion Connecticut Retirement Plans & Trust Funds, Hartford.
In response to Wells Fargo agreeing to publishing the review, the investors are withdrawing a resolution they filed in 2018 calling for the review.
Wells Fargo has agreed that the business standards review will analyze the impacts on the bank, its reputation, customers and investors of the continuing scandals; identify the systemic cultural and ethical root causes of recent scandals; and address the issues and embed systems throughout the company, confirmed Randy Rice, spokesman for Mr. Magaziner.
The review will also evaluate the effectiveness of changes instituted over time, commit to regular progress disclosures and describe how the identified issues will be factored into employee and executive incentive and compensation decisions.
During a meeting with Wells Fargo CEO Timothy Sloan in February 2017, Mr. Magaziner expressed concern over the corporate culture that allowed widespread fraud.
The Interfaith Center on Corporate Responsibility, whose members were among the co-filers, said in a news release that the report is expected to be published before the end of the year.
Wells Fargo spokesman Mark Folk said in an emailed statement: "We greatly value input from our shareholders and other stakeholders. Wells Fargo has agreed to prepare and publish a business standards report on our website. We look forward to continuing to work with the members of Interfaith Center on Corporate Responsibility."
