The case can be purchased on line through The Darden School of Business http://store.darden.virginia.edu/the-wells-fargo-commercial-banking-scandalLinks to an external site. Explain how two specific governance mechanisms our course described failed Wells Fargo. How likely is it that the scandal- tolerant culture within the bank changed by October 25, 2016? Why? Case number six regarding Wells Fargo's fraudulent account creations is an excellent way to conclude Business Strategy and Policy's cases applying course concepts to real business situations. This case requires considering a firm's duties to its various stakeholders, principally its customers, employees and stockholders. It examines governance, the means by which stakeholders control a firm's strategic direction. Most importantly, this case confronts a firm's duty to acknowledge past mistakes, to assess the underlying reasons and to take corrective action. It truly does go right to the work of the most senior strategic leaders. The first question requires examining the various governance mechanisms/ strategies. (As a reminder, we studied ownership concentration, boards of directors, executive compensation and the market for corporate control.) What mechanisms do our studies suggest should have worked for Wells Fargo? Look at the case to assess how Wells Fargo sought to control and to create incentives for managers and non- managers. What were the various mechanisms Wells Fargo thought would cause correct (correct for ALL stakeholders) actions? What failed and how? Describe what actually happened and why. As a hint, but also a principle I hope you will take from this course is an idea from Michael Young of Wilkie, Farr and Gallagher: aggressive goals and dire consequences for failure create fraud. We studied that a firm cannot rely upon a single governance strategy. Combinations of methods work best. Look beyond the initial failure. Look for evidence that Wells Fargo had in place processes that should have limited fraud but did not. Is this a separate governance strategy failure? Did the back- up fail too? Which additional governance strategy failed? Leadership and management experts have long recognized the strength of an organization's culture in guiding what people do. The case describes a culture that stressed sales and believed that its sales ability was key its success. Please judge as to whether the actions the case describes were adequate to modify that culture so as properly to balance all stakeholder needs. Is the new CEO a fitting champion for a new culture? Has he acted effectively? Is the new CEO even a reasonable choice to lead a Wells- Fargo change? Is this in itself a critical governance issue? This is the view from 20,000 feet