Ideal Leadership for Addressing Ethics and Corporate Governance in Institutions

Essay from the year 2023 in the subject Business economics - Business Ethics, Corporate Ethics, , language: English, abstract: Despite established control and risk management systems overseen by its board of directors, Wells Fargo & Company faced rampant delinquency, as evidenced by the 2016 scandal. This leads to the question: where did things go wrong? The board-commissioned investigation revealed that a toxic corporate culture, a fragmented organizational structure, and weak leadership were responsible. The inquiry showed that much of the unethical behaviour was driven by the pressure to meet unrealistic sales targets tied to dubious incentives. This paper explores the total leadership failure at Wells Fargo, using the scandal as a case study. Additionally, it provides an in-depth review of corporate governance, its role in companies, and why governance alone may not prevent unethical practices if leadership is lacking. Multiple leadership theories are analysed, concluding that Wells Fargo's downfall resulted from the absence of transformational, authentic, and situational leadership. Gender differences in leadership are also examined, with findings highlighting the role of both men and women in leadership. Finally, recommendations are offered based on lessons from the scandal that could be applied across industries.