I have always believed that culture is the most important part of a company’s success. At Wells Fargo, we have been focused for more than 160 years on a culture of working together to help our customers. We define “culture” as understanding our vision and values so well that you instinctively know what you need to do when you come to work each day.
Culture is the attitude we bring to work every day — the pattern of thinking and acting with the customer in mind. It’s the habit of doing the right things, and doing things right. It’s a thousand behaviors inherited from team members who came before us, behaviors that we model today and then pass on as our legacy for team members who will come after us. It’s behaviors and attitudes that are core to who we are: respecting differences, honoring deadlines, listening to each other, keeping promises, returning phone calls and emails as promptly as we can, and being actively engaged in meetings.
If there is one job that I as CEO must do for our team members, customers, communities, and shareholders, it is to be the keeper of our company’s culture. It is the role of all team members to understand our culture, internalize it, live it, teach it, and reinforce it.
Culture of CaringSM
Our success has as much to do with attitude as aptitude — what’s in our hearts, not just our heads. Our success depends on how much we care for each other, our customers, our communities, and our stockholders.
Our culture is reflected in the essence of our brand: “Together we’ll go farSM.” We want our team members to feel proud of working for a company that truly cares about people, goes the extra mile to do what’s right — in good times and bad — and believes that “better” is possible for everyone.
Central to our culture are the following mindsets:
- Caring. Caring is core to who we are. We always want to be warm, welcoming, and humble; to take the time to listen and genuinely understand; to have empathy during the tough times; and to make a positive difference in people’s lives.
- Can-do attitude. If there is a better way, we’ll work hard to find it. We want to go the extra mile to do what’s right; find options that are simpler, easier, and better; and own each moment to make lasting, positive experiences for our customers.
- Better together. Working together makes the difference. We all work for the customer; we honor our promises to each other and our customers; and we know our customers and work closely with them.
Enthusiasm and caring are what allow ordinary people to do extraordinary things. As part of our culture, we want our team members to have fun — because success without fun never lasts, and fun without success isn’t much fun. This means enjoying our work, enjoying the people we work with, enjoying the difference we make in the lives of our customers and communities, and celebrating our achievements together as a team.
One Wells Fargo
All team members can bring our Culture of Caring mindsets to life in their daily work, whether we interact directly with customers or work for them behind the scenes. We believe that operating according to our mindsets not only makes Wells Fargo a great place to work, but also helps us deliver the best experience for our customers. That’s something we call “One Wells Fargo.”
We have approximately 265,000 team members across more than 90 businesses. Customers expect us to work across business lines to help them meet their financial needs.
One Wells Fargo means that we show our customers we know them at every moment of the relationship by making it easy for them to do business, providing guidance to them, and ensuring they feel valued.
Every moment we have with our customers is important. There are everyday moments — the daily transactions customers need, such as depositing a check, executing a trade, or making a payment. There are moments of truth — the more complex, less frequent, and often high-emotion interactions, such as buying a home, starting a business, or resolving an issue.
And finally, there are signature moments — the times when we differentiate ourselves by helping customers succeed financially or recognizing relationships, such as working with customers to help them reach financial goals, rewarding them for giving us more of their business, or doing something as simple as wishing them “happy birthday” at the ATM.
When we communicate with customers, we should do it with C-A-R-E: Consistent. Approachable. Respectful. Empathetic. We should be consistent in our messages to customers across events, across lines of business, and across the company. We should be approachable and easy to understand. We should be respectful, polite, courteous, considerate, and empathetic. We should speak and write in language our customers can understand.
Every time we serve a customer, we should ask ourselves, “If I were the customer in this situation, how would this experience feel for me? Did the transaction feel simple and easy? Did my problem get resolved quickly? Did the team members I contacted first accept responsibility for making sure I got what I needed?” That’s what we mean by One Wells Fargo — imagining ourselves as the customer.
Customers want to do business with companies they connect with emotionally, that speak their language, that are sensitive to their culture, that value what they value, and that help them succeed financially. To make that emotional connection, we must put our customers at the center of everything we do.
Customers expect us to be One Wells Fargo. None of us can know everything about the thousands of products and services across our businesses. Customers don’t expect that. What they do expect are systems that work smoothly across all our businesses. They expect finding the right team members, or the right answers to their questions.
Every team member has one thing in common: We all work for the customer. Every day, our customers say to us, “Know me. Know who I am. Know what I need. When I come into the bank or go online or use your phone bank or ATM, have all my information there about my accounts. Don’t ask me the same questions over and over about information you already have. Don’t transfer me to someone else who might do the same thing.” They say, “Appreciate me and all the business I bring you. Treat me like a friend. Thank me. Reward me. If I give you more of my business, then give me a better deal and keep up your great service.” Everything we need to know about a customer must be available easily, accurately, and securely, as fast as the best internet search engine.
Disciplined, responsible lending
To be the best in our industry, we have to be the best in credit and risk management. This expertise provides the foundation for our reputation and industry leadership. Our time-tested discipline in lending has made it possible for us to grow and prosper through many economic cycles. It’s helped us avoid many of the credit traps experienced by others.
Because of our discipline, we can be there for our creditworthy customers when they need us, in good times and bad.
The fundamental principle of sound credit is to know your customers and understand their needs. This allows us to respond quickly. We expect our credit and lending officers to be well trained and knowledgeable, and to use common sense and conservative assumptions. We should always ask, “Does this credit decision make sense for the customer and for Wells Fargo?” We should not sacrifice credit quality for short-term financial gain.
Lending can anchor a customer relationship, but we don’t view a loan as just a transaction. It must be part of a broader, deeper relationship with a customer — whether an individual or a business — because lending is simply one facet of any customer’s total financial need. Banks that do transactional lending or that compete on price alone are doomed to fail. Successful bankers build long-term relationships, providing virtually every product or service a customer requires and seeing the loan as part of the overall customer relationship.
In our consumer lending businesses, we have four principles that guide our lending practices:
- Pricing on all loans is fully disclosed and competitive, reflecting a complete view of the customer’s finances, credit history, characteristics of the transaction, and collateral.
- Offering customers enough information to allow them to make an informed decision.
- Ensuring every loan we provide makes sense for the customer, and the customer clearly understands how the product works.
- Exercising due diligence to determine that customers have the ability to repay a loan before we provide it.
It’s contrary to our culture to try to provide our customers any product or service that is not appropriate for them.
For more than 160 years, Wells Fargo has been in the risk management business. It’s central to what we do, and it’s never been more important than it is today. We’re not rewarded unless we take risk, but we must identify, understand, quantify, control, and price appropriately for that risk. Risk management is so important that we have added it as one of our strategic pillars and priorities that you will see later in this booklet.
Although we’ve seen a lot of change over the years, the fundamentals of our risk management remain the same. We are guided by our statement of risk appetite, which defines the nature and level of risk that Wells Fargo is willing to take while operating in a safe and sound manner. This statement provides the philosophical underpinnings that guide businesses and risk professionals as they manage risk on a day-to-day basis. It is based on seven core principles:
- Relationship focus. We take only as much risk as is necessary to efficiently, effectively, and prudently serve our consumer, small business, commercial, and wealth customers. We do not offer products that are inappropriate for our customers’ needs and circumstances.
- Understanding risk. We are willing to take risks when we understand them, and we avoid or minimize risk where we have no competitive advantage or limited experience.
- Reputation. We will not engage in activities or business practices that could cause damage to our reputation.
- Price for risk. We price our business to cover risk to capital and will retain risk only if priced for a sufficient risk-adjusted return.
- Conservatism. We have a significant bias for conservatism. While we want to grow the company, we will do so only in a way that supports our long-term goals and does not compromise our ability to manage risk.
- Operational excellence. Our customers expect that we will be a reliable provider of services. Our team members are committed to excellence and are focused on optimizing efficiency and effectiveness while minimizing errors.
- Clear accountability. Our lines of business have primary accountability for risk. They own the risk, have their own risk team members, and are the first line of defense. Our Corporate Risk group is the second line of defense and provides oversight to ensure our corporate functions and businesses soundly manage risk, comply with applicable laws and regulations, and offer products and services that help our customers meet their financial needs. Corporate Risk also provides “credible challenge” to the business lines and corporate functions, when appropriate. We believe this approach is a competitive advantage. In addition, we have a third line of defense with our internal audit team.
While we rely on risk professionals in the lines of business to take primary responsibility for managing and escalating risks, we firmly believe that risk is everyone’s business. All team members have a responsibility for managing risk. Compliance and risk management are part of our culture and are an extension of our code of ethics. We expect team members to identify and escalate potential risks, and we recognize and thank them for doing so.
Corporate social responsibility
At Wells Fargo, caring for customers and communities is embedded in our culture. We strive to create positive, lasting impact — socially, economically, and environmentally — through our operations, business practices, philanthropy, and community engagement. We seek out diverse perspectives to inform our business strategy, work to strengthen financial knowledge and opportunities for our customers and communities, and take action to care for and improve the environment.
While we are not the largest company in the U.S. or even the largest bank, we are consistently ranked as one of the country’s top corporate philanthropists by The Chronicle of Philanthropy. We donate, on average, more than $250 million each year to nonprofits. This is not about charity. It’s about intelligent and thoughtful investing in the future of the communities where our team members and customers live and work.
Our team members understand that small efforts can make a huge difference in our communities. We care deeply about our communities, and we volunteer our time, serve on nonprofit boards, and contribute to local charitable organizations. United Way Worldwide has consistently recognized Wells Fargo for having one of the nation’s top United Way campaigns.
Our corporate social responsibility efforts primarily are focused on these areas:
- Social: Inviting diverse perspectives. We all do better when we value the connection between diversity and innovation. Our culture of diversity and engagement creates a more dynamic environment — one where team members, customers, and communities can thrive. As the population becomes more diverse, adapting to changing demographics is one of our top business imperatives. It is critical that our team members reflect the national and global diversity so we understand and best serve the needs of our customers and communities. We want to align our focus on diversity and inclusion with all that we do.
- Economic: Strengthening financial knowledge and opportunities. We all do better when our local communities and economies are resilient. We invest in underbanked communities and explore ways to expand consumer access to high-quality and responsible financial products, services, and education. We help create new homeowners with down payment assistance and revitalize neighborhoods in communities hardest hit by the recession. We continue to expand our Hands on Banking® financial education program and now offer specific courses for military members, seniors, teens, and others. This is a critical issue, and we want to do all we can to help.
- Environmental: Caring for the environment. We all do better when we make decisions that improve the environment. We are focused on enhancing the environmental performance of our own operations by increasing the number of our Leadership in Energy and Environmental Design (LEED) certified properties, reducing greenhouse gas emissions, and improving water efficiency. We are helping accelerate the transition to a greener economy by investing in renewable energy, supporting clean technologies, and providing financing to environmentally beneficial businesses. We also focus on managing the environmental and social risks in our approach to lending and making investments in our communities to help them become more environmentally sustainable.
Culture first, size second
We use acquisitions as a cost-effective way to help us set the stage to earn the business of more customers. We don’t acquire another company simply to get bigger. We never put size ahead of culture. So we get bigger by getting better — we don’t get better by getting bigger. By “better” we mean putting ourselves in the best position to be there for our customers when they need their next financial product.
We want to be a leader in our industry in return on equity, return on assets, and growth in revenue and profitability. Our stock should be among the best performers in any industry. But we think about achieving these goals in a very different way. If we do what’s right for our team members, customers, and communities, then — and only then — we will earn sustained profits and have our shareholders see us as a great investment.
When it comes to acquisitions, we build relationships that often take years to bear fruit. We look for economies of skill, not just economies of scale. We buy companies and assets we understand. We use conservative assumptions. We acquire only what will benefit shareholders. Every acquisition must add to earnings per share no later than the third year after purchase and earn at least a 15 percent internal rate of return. We integrate the acquired company and its people quickly and smoothly into our culture.
Our priorities for newly acquired companies are the same as those of any other Wells Fargo business: first, ensure safe and sound management practices are in place; second, achieve acceptable profitability; and third, grow the business and have fun succeeding.