The RACI model is used in mapping out organizational responsibilities. Who’s responsible, who’s accountable, who needs to be consulted, and who needs to be informed?
The CEO of Wells Fargo got hammered the other day for the account-creation scandal, where employees created accounts without customer permission (or knowledge). Bank paid a $185 million fine. More than 5,000 employees fired over 5 years. “Senators Assail Wells CEO,” The Wall Street Journal, September 21, 2016 A1.
The CEO apologized. The illegal activity started in 2011; he learned about it in 2013, and informed the board the next year.
Apparently, no one in senior management has been penalized. No one noticed that the bonus incentives they had implemented “incentivized” bad behavior.
While senior management has responsibility, does that matter if the management isn’t held accountable when things under their supervision (responsibility) go wrong? Especially when the conduct is illegal and was ongoing over a period of years? Do we need to wait for the “negligent oversight” cases brought by the Wells Fargo shareholders against the directors?