Backlash grows for Wells Fargo following CEO remarks
Wells Fargo is in hot water again. The bank, which is still managing brand damage caused by its 2016 fraudulent account scandal, is facing a growing public backlash following recently reported remarks by CEO Charles Scharf about a dearth of Black talent.
According to NBC News, Scharf referred to a scarcity of qualified minority job candidates at a companywide meeting and also wrote, “While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from," in a company memo.
After news of his June comments broke, Scharf issued an apology on Twitter.
A Wells Fargo spokeswoman pointed to a release, issued by the bank today, in which it notes recent diverse senior-level hires.
Despite the apology, some brand experts say the damage is already done—particularly given Wells Fargo’s history.
“CEO Scharf’s remarks about the alleged lack of minority talent to fill positions at Wells Fargo are incredibly tone-deaf, given the recent history of the bank and its exploitation of its own customers,” says Gene Grabowski, partner at crisis consulting firm Kglobal. He noted that 90 percent of a CEO’s job today is communication and that Scharf is sending the wrong signals to employees and customers.
Scharf, who was named CEO last year, is not the first brand leader to incite backlash over comments. Under Armour CEO Kevin Plank notably praised President Trump three years ago and was forced to walk back his words amid a public outcry. Yet in today’s environment, which finds the country combating both the coronavirus pandemic and social justice inequalities, consumers might not be so accepting.
“Wells Fargo needs to feel the effects and the consequences because we can no longer make excuses for ‘slips of the tongue’ or ‘comments taken out of context,’” says Cheryl Overton, founder and chief experience officer of Cheryl Overton Communications—noting that the remark speaks to “the larger problem of systemic racism at Wells Fargo; it’s hard to attract qualified Black candidates if they feel the culture is damaged.”
To avoid such missteps, Overton says executives need to be more open to engaging with Black constituents and communities and refrain from public remarks until they’re retrained on such engagements. Overton also says she predicts a flurry of Black hires for Wells Fargo. “I’m certain these qualified professionals who have been available the whole time will finally get the platform they’ve deserved,” she says.
Many on social media compared Scharf’s remarks to Wells Fargo’s previous scandal, when it created millions of fake savings and checking accounts for its clients without their knowledge. Earlier this year, the bank said it would pay $3 billion to settle claims on the issue.
Others simply criticized what they view as the brand’s lack of commitment to the Black community.
Earlier this month, Wells Fargo released a new spot in collaboration with 100 Black Men of America Inc. The video, “We See You,” is meant to support the next generation of Black leaders, a spokeswoman said.