Blows to the Head
BY NIR KOSSOVSKY
Medical science — and the NFL — have now come to recognize that repeated blows to the head, like those
common to football players, lead to
Chronic Traumatic Encephalopathy
(CTE). It took years to acknowledge,
partly because addressing it would
require significant action and culture
change throughout the league.
There are several parallels between
Wells Fargo’s reputational crisis and the
NFL’s CTE crisis.
First, a scandal involving phony
accounts, followed by CEO and board
departures. Now another scandal
involving charges for insurance on auto
loans — this one on the watch of the
company’s new leadership.
Corporate reputations recover from
crises more easily than the reputations
of individuals, but still — how much
pounding can one brand take?
Wells Fargo, like the NFL, has
taken steps to course-correct.
But just as the NFL’s early refusals
to acknowledge CTE damaged its
credibility, Wells Fargo’s inability to
execute on its course correction —
even with new leadership — has put
the bank in a very deep credibility and
Reputational crisis occurs when
stakeholders are angry over a failure
to meet their expectations. Credibility,
integrity and reliability are values that
stakeholders normally believe they can
take for granted.
After years of NFL denials, the
burden of convincing the public
that it is serious about CTE is more
challenging than if the NFL took a
leadership role in solving the problem
when it became known.
That would have meant adopting
many of the practices it ultimately
adopted — changing rules on tackling,
imposing penalties for infractions and
trying to develop better helmets.
Swift action would have delivered
a simple-to-understand and credible
message that the NFL was serious
about protecting players and the
reputations of both the teams and the
As for Wells Fargo, such action
would mean better governance
and internal controls to mitigate
unauthorized “contacts” and the use
of insurance solutions as third-party
warranties and to form the basis for a
defense for the bank’s leadership in the
event of inadvertent “contact.”
How would such products be
structured? Just as medical science has
allowed us to understand CTE better,
new algorithms now allow us to predict
and measure reputational damage.
We now know that each new
reputational crisis at Wells Fargo makes
the climb-out steeper. Repeated blows
to its reputation will eventually cause
its stock price to suffer the financial
equivalent of dementia.
Wells Fargo can weather the
storm. With strong leadership and
its significant resources the company
can chart a course toward reputational
The personal reputations of the
individuals in leadership are far more
fragile. When their reputations sink,
they lose their executive positions, their
board seats and their compensation. &
NIR KOSSOVSKY can be reached at