May 23, 2022

ESG Fraud Hits Interviews in Banking & the NFL

Here’s something Lawrence blogged last week on (if you’re not already subscribed to Lawrence’s updates, which are focused on cutting through all the ESG noise to provide practical takeaways to companies, sign up here):

Yesterday I recorded a podcast with Chris McClure, the National Head of ESG Services at Crowe, about fraud in ESG (that podcast will be available to members soon). Only after that did I see the New York Times article about Wells-Fargo allegedly conducting fake job interviews: “Black and female candidates are sometimes interviewed after the recipient of a job is identified, current and former employees say.”

The article discusses allegations made public by Joe Bruno, a former executive in the bank’s wealth management division.

… Mr. Bruno noticed that often, the so-called diverse candidate would be interviewed for a job that had already been promised to someone else.

He complained to his bosses. They dismissed his claims. Last August, Mr. Bruno, 58, was fired. In an interview, he said Wells Fargo retaliated against him for telling his superiors that the “fake interviews” were “inappropriate, morally wrong, ethically wrong.”

Wells Fargo said Mr. Bruno was dismissed for retaliating against a fellow employee.

Mr. Bruno is one of seven current and former Wells Fargo employees who said that they were instructed by their direct bosses or human resources managers in the bank’s wealth management unit to interview “diverse” candidates — even though the decision had already been made to give the job to another candidate. Five others said they were aware of the practice, or helped to arrange it.

These claims are similar to those levied in 2019 against the National Football League (NFL) and three of its teams by Former Miami coach Brian Flores, who is Black. From a Sports Illustrated piece on the matter:

It was clear from the substance of the interview that Mr. Flores was interviewed only because of the Rooney Rule [NFL teams must interview two minority candidates when looking for a team’s next head coach], and that the Broncos never had any intention to consider him as a legitimate candidate for the job. Shortly thereafter, Vic Fangio, a white man, was hired to be the Head Coach of the Broncos.

Fraud is making quite a splash in ESG as pressure to meet DEI and other ESG goals increases. I’ve written about fraud many times before and Chris echoed those thoughts and more. Keep a look out for my podcast with Chris, where he talks about the problem and offers ideas on solutions. I’ll announce its availability soon. Members can also refer to our checklist on Internal Controls for E&S Information and our E&S Data Validation Guidebook.

Even further, using DEI data to set goals and reporting on progress is the topic of the third & final DEI workshop – this Wednesday May 25th from 1:00pm – 2:30pm Central time. To attend this critical event for free, register here.

Liz Dunshee