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Throughout my career, I have been a member of some fantastic research-oriented organizations in the financial services industry, all of which focused on the numbers.  Whether it be evaluating credit worthiness, interpreting bond and loan documentation, spotting aggressive revenue recognition tactics, or measuring macroeconomic impact, these organizations sought to detect catalysts that could change how investors would value the company.  However, what these services did not focus on was the appraisal of a company's reputation in the eyes of its customers and its investors.  

 

One of the more heavily followed stories of the past few years has been Wells Fargo and the sharp decline of trust, credibility, and reputation it has witnessed from its customers and, to a degree, from its shareholders.  While Wells Fargo emerged from the 2007-2009 financial crisis relatively unscathed compared to its competitors, phony account scandals and other customer abuse issues within its wealth management division have taken their toll. In October 2016, amid the initial fallout, CEO John Stumpf was pushed out.  He had taken considerable blame for contributing to the predatory sales culture that provoked the fake accounts scandal. After 2.5 years at the helm, Stumpf’s replacement, Jim Sloan, who had been tasked with restoring the embattled bank’s once-vaulted reputation, resigned last month. 

 

The Financial Times summarized much of the events that has led to the damaged profile of Wells Fargo this past January:  Wells Fargo: repairing a damaged brand While Rupert Younger, Director of the Oxford University Centre for Corporate Reputation concedes that that consumers are much faster to forgive scandals of character rather than scandals of competence, one must beg to ask the question, why not try to avoid these situations altogether? 

Photo Credit: BIZCATALYST 360

Reputation

 

Wells Fargo is a large financial institution – over the long-haul it may very well put these scandals behind it and regain its standing, performing in line with its competition.  Were Wells Fargo a smaller institution or private company, the sort of reputational damage that it endured could be crippling, if not terminal.  Especially as investors are more mindful of ESG considerations while determining their exposure, a deeper level of scrutiny is required.                         

 

Gryphon Strategies employs an enhanced due diligence & intelligence team that can engage in discreet source inquiries to measure precisely  these metrics of reputation, corporate culture, and internal business practices.  Our team partners with investors to stay ahead of information leaks and business deterioration before it hits the front page and the bottom line.       

 

We would be glad to serve you in safeguarding your business and the value of your investments.  Contact our Head of Business Development, Rich Finley at 914-730-9043 or rfinley@gryphon-strategies.com to inquire about our services.

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