Wells to report on ethics lapses

Wells Fargo has agreed to publicly report on the root causes that led to a rash of ethical lapses, a group of investors said.

The group, led by the Interfaith Center on Corporate Responsibility and including about 20 religious organizations and state officials from Rhode Island and Connecticut, said Tuesday they would withdraw a shareholder proposal on the issue following the San Francisco bank’s decision. They had sought to put it to a vote at the lender’s annual meeting in April.

“They were in a culture where they believed their vision and values have carried them for the past 30 years and were continuing to carry them,” said Sister Nora Nash, who oversees retirement funds for Sisters of St. Francis of Philadelphia, which led the proposal. “Obviously, there was tremendous risk in their culture, and we need to take a serious look at the code of ethics (and) accountability.”

The investors asked Wells Fargo to produce evidence that its incentive programs are aligned with clients’ interests. They also asked the lender to report on how it is strengthening risk management and controls to prevent such lapses.

“Wells Fargo has agreed to prepare and publish a business standards report on our website,” bank spokesman Ancel Martinez said in an email.

Rhode Island Treasurer Seth Magaziner, who oversees the state’s public pension fund, called the bank’s decision “a first step toward changing the culture at Wells Fargo that harmed a lot of customers and shareholders.”