The next chair of Wells Fargo worked her way up from a bank teller position.
After epic climb, industry pioneer to become chair at Wells Fargo
Betsy Duke was working in a Virginia Beach, Va., dinner theater in the mid-1970s, struggling to make ends meet, when she applied for a job at a dry cleaner. It turned her down. Instead, she became a part-time teller.
This week, Wells Fargo & Co. named her the first woman to oversee one of the largest banks in the nation. She will become chair of the lender’s board at the start of next year, capping one of the most epic climbs — by man or woman — into the financial industry’s top echelons. Her career already included a stint as a Federal Reserve governor, starting on the brink of 2008’s financial meltdown. This time, she will supervise a management team contending with scandal after scandal.
“Walking into the middle of a crisis is not new to me,” she said. With executives already enacting a plan to overhaul the bank, “it’ll be my job to communicate between the board and management, and to make sure that our oversight is as strong as it can possibly be,” she said.
Duke, 65, is succeeding Stephen Sanger as part of a broader board overhaul, in which he and two other directors are leaving after scandals on their watch. Sanger, a member of the board since 2003, became the lender’s chairman less than a year ago when John Stumpf stepped down from both that role and as CEO. At the time, lawmakers were assailing the bank for opening millions of accounts without customers’ permission.
Last month, calls for further board changes intensified after more scandals erupted in the bank’s auto-loan operations.
Duke has deep roots in community banking, but she also understands the perspective of U.S. watchdogs after five years as a governor at the Fed.
“She exudes real credibility not only with investors and her fellow board members, but also regulators,” said Mary Jo White, the former head of the Securities and Exchange Commission. White, now a partner at Debevoise & Plimpton, oversaw the board’s annual self-evaluation.
But Duke’s initial passion was acting.
After graduating from the University of North Carolina in 1974 with a degree in drama, Duke landed a non-singing role in a Cole Porter musical at a dinner theater, and a second job on Sunday afternoons serving beer and all-you-could-eat flounder. She eventually took a third job, as a drive-up teller. She caught the banking bug.
She soon landed a fulltime job at Bank of Virginia Beach, where she met her mentor, then-CEO Burt Harrison, as well as her future husband, Larry Harcum. Along the way, she earned an MBA at Old Dominion University.
That bank was sold in the mid-1980s, and the trio started another, Bank of Tidewater. When Harrison died of a heart attack on a golf course in 1991, Duke took charge the next day and led the bank through its already-begun acquisition of branches from failed lenders in the savings and loan crisis.
A decade later, she sold the bank to SouthTrust, becoming an executive there. When Wachovia Corp. bought that company in 2004, she stayed on.
That year, she became the first woman to chair the American Bankers Association since its founding in 1875. A few years later, President George W. Bush nominatedher to the Fed board.
A month after she joined, Lehman Brothers Holdings collapsed. Shortly after, her old firm, Wachovia, was bought by Wells Fargo.
Duke “brought a practical banker’s perspective,” former Fed Chairman Ben Bernanke recalled in his book on the crisis. He described her as “friendly and good-hearted, but blunt when she needed to be.”
Things seemed like they would be relatively quiet when she joined Wells Fargo’s board in January 2015. Profits were climbing steadily, and Wells Fargo was the world’s most valuable bank. But behind the scenes, executives were struggling to rein in abuses in the branch network.
For years, employees had been opening unauthorized checking and deposit accounts. Some were angling for bonuses. Others were worried they would lose their jobs if they couldn’t hit untenable sales targets. The whole debacle exploded in public view last September when Wells Fargo agreed to pay $185 million in fines.
Wells Fargo ranks third by assets among the nation’s six giant banks, none of which has had a female chair or CEO. Duke has come to embrace her role breaking glass ceilings — though she was reluctant at first. At the American Bankers Association, she tried to play it down, she said.
“I thought it would make it seem like I was only the chairwoman because they wanted the first woman — something stupid like that,” she said. “After I got done, I realized that that was truly a mistake. It’s really important to embrace being a role model of high visibility positions for women.”