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Conventional Wisdom #1: Leadership at Wells Fargo has been bad. In one of the biggest rebukes ever to the head of any financial institution, CEO John Stumpf has now been required to forfeit some $41 million, as punishment for doing wrong. For presiding over a bank that misled and even defrauded countless customers.

Conventional Wisdom # 2: Having women as members of boards is good – good for business and good for society more generally. Gender balanced boards, we are told, result in “better productivity and organizational effectiveness.” Moreover, women board members “are more likely [than men] to consider social, ethical, and environmental effects of business.”*

Well… guess what. To every rule there really are exceptions. Take the case of Wells Fargo. Its board was a source of pride particularly because of its gender diversity. Women make up 40% of Wells Fargo’s board, twice that of the typical S & P 500 company. Additionally, at least two of these women had extensive experience in consumer banking. One was a member of the Federal Reserve Board from 2008 to 2013. The other was director of banking and finance for the State of Nebraska from 1987 to 1991.

We are likely never fully to know how it happened that Wells Fargo went badly astray. What we do know though is this. That while women are now widely reputed to “change how boards work,” that while women are now widely reputed to provide boards with procedural virtues such as “enhanced dialogue,” “better decision making,” and “higher quality monitoring” of management, it ain’t necessarily so.**

At the least, the famous, now infamous case of Wells Fargo should give us pause. Should remind us that having a high percentage of women on any given board is no guarantee whatsoever of good company behavior.

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*Quotes from Ivana Vasic Chambers, “Evidence Back the Benefits of Equality,” Financial Times, September 29, 2016.

** Quotes from Laura Liswood, “Women Directors Change How Boards Work,” Harvard Business Review, February 17, 2015.

Are Americans really, really ready to elect a woman president? Given what’s happened in recent weeks, I’m really, really not sure.

We’ve had fifty different explanations for why in one month’s time Hillary Clinton’s poll numbers have gone way down, while Donald Trump’s have gone way up. One or two months ago Clinton was comfortably ahead in most of the most important battleground states. Now Trump leads her in states like Ohio, and is tied with her in states such as Colorado and Pennsylvania. One or two months ago Clinton seemed the near certain winner of this endless, relentless race to the White House. Now, at most, she’s slightly ahead. Are any of the explanations provided so far adequate to the task of explaining his rapid rise and her precipitous decline? What really, really gives???

All along the assumption has been that in 2016 being a woman would not disadvantage Hillary Clinton. After all, she had run for the presidency eight years earlier, and had come close to winning the Democratic nomination. And, after all, Americans had elected a black man to the White House. And after all, we’re well into the second decade of the 21^st century – surely we’re past gender bias.

In truth though, the evidence for this is scant. To the contrary. The evidence is that women at the top are still few in number – only 4 % of Fortune 500 CEOs are female which, at last count, means that 96% are male. And the evidence is that Americans still equate leadership qualities more with being masculine than feminine.

In 2007 Alice Eagly and Linda Carli, both experts on women and leadership,  wrote, “The unique pressures placed on female leaders derive in part from the relation between stereotypes about leaders and stereotypes about women and men…. People consider men to be agentic, possessing traits such as ambition, confidence, self-sufficiency, dominance, and assertiveness, whereas they consider woman to be communal, possessing traits such as kindness, helpfulness, concern for others, warmth, and gentleness. And how are leaders perceived? … Leaders are thought to have more agentic than communal qualities. As a result, stereotypes about leaders match quite well with stereotypes about men.”*

Ring a bell? Sure, it’s 2016, not 2007. It’s a decade later, we must’ve evolved since then! Really? Have we changed much, if at all? Or do we still think of leaders as more properly male than female? Or do we forgive things in Donald Trump that we would never in a million years forgive in a female candidate? Or do we hold Hillary Clinton accountable in ways that far transcend any standard we have for her male counterpart?

Just asking. On the morning of this first presidential debate – where she will have to be letter perfect or be perceived as having failed, and he will be forgiven anything short of a national disaster – I’m just asking.

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*“Overcoming Resistance to Women Leaders” in Barbara Kellerman and Deborah Rhode, eds., Women and Leadership: State of Play and Strategies for Change (Jossey-Bass, 2007), pp. 127, 128.

You think you had a rough week? In comparison with whom?

• Andrew Cuomo. Once touted as a likely Democratic candidate for president, the governor of New York has fallen on hard times. This past week more of the same. Faced with what the Wall Street Journal described as “scathing allegations” about his administration in a federal criminal complaint, Cuomo blithely insisted that he was conducting business as usual. Really? This while no fewer than nine people with close ties to the governor were charged by federal prosecutors with bribery and extortion. If this were the first time Cuomo smelled of scandal, it would be one thing. But it is not.
• John Kerry. It’s not often that an inordinately well-intentioned public official fails so repeatedly and resonantly. But Kerry has done it again. Once again he has tried as hard as he knew how to bring about a semblance of peace or, at least, a cessation of hostilities, only to fail miserably. This time of course in Syria. This time his humiliating failure was punctuated by the worst bombing of Aleppo – already the most wretched of all cities – since the start of the five-year-old civil war. John McCain described Kerry’s efforts to pursue a deal with Russia as “intrepid but delusional.” The latter has only four short months left to prove the former wrong.
• Paul Ryan. He’s turned craven. The Great White Hope of the Republican Party, the man who dared for an instant to withhold his support from the Republican nominee for president, has turned mute. Hedging his bets as Donald Trump has morphed from likely loser to within striking distance of the White House, Ryan has clammed up. It’s especially disappointing because we have every reason to believe we know how Ryan really feels. Because once upon a time not long ago Ryan chastised Trump for making a racist comment. Because once upon a time not long ago Ryan questioned Trump’s commitment to Republican ideals. Because once upon a time not long ago Ryan knocked the nominee on a regular basis. Because once upon a time not long Ryan was man enough – you should pardon the expression – to put his money where his mouth was. Now the reverse is true. Now Ryan puts his mouth where his money is.

No wonder we’re disheartened. Seems the good guy of the three was tilting at windmills.

James B. Stewart’s column in today’s New York Times about the Wells Fargo case is so solid, there’s no need for me to reiterate his argument.  (Link below.) I will however extract from his piece eight salient points, all of which pertain to bad leadership.

• Wrongdoing at the highest levels of Wells Fargo seems so clear, it has the virtue of providing the Justice Department with an unusual opportunity to put its money where its mouth is. To hold one or more corporate leaders accountable for their misconduct.
• Accountability for misconduct – in this case defrauding customers on a depressingly large scale – will be semi-achieved only if individuals are held responsible. It will never be achieved if only institutions are held responsible.
• To dismiss 5,000 people at lower levels of the organizational hierarchy for wrongdoing endemic to the corporate culture, is more reprehensible than doing nothing at all. It’s scapegoating – the powerful deflecting blame onto the powerless.
• Fraud is frequently difficult to ferret out. Not in this case it isn’t. One of the virtues of this case is that the charges of criminal wrongdoing are easy to understand.
• Corporate misconduct is easier to prosecute when political and public outrage are visible, palpable, formidable.
• Corporate misconduct is easier to prosecute when a single individual takes the lead. In this case a highly visible senator, Elizabeth Warren, an expert in financial services and also consumer protection, is the perfect attack dog. Her assault on Wells Fargo CEO John Stumpf during Tuesday’s congressional hearing was lacerating, devastating.
• Warren’s attack on Stumpf had virtue of containing specific recommendations. She demanded he be criminally investigated, by both the Department of Justice and the Securities and Exchange Commission, And she called for his resignation. (In the wake of Tuesday’s hearing, Stumpf did in fact resign, albeit only from his role as adviser to the Federal Reserve.)
• As usual, to follow the money is to have our anger stoked even further. Between 2011 and 2015 – right while the “epidemic of bogus account openings was in full swing” – Stumpf earned over $100 million.

Those of us who are card-carrying members of the Leadership Industry would do well to study what happened at Wells Fargo. Not only is it edifying, it is sobering. A sobering reminder of how little we know about bad leadership, and of how ill-equipped we are to stop or even slow it. If Stumpf and the now “retired” former head of retail banking at Wells Fargo, Carrie Tolstedt, end up paying a price for what took place on their watch, we’ll have cold consolation – which is, however, better than no consolation.

http://www.nytimes.com/2016/09/23/business/wells-fargo-tests-justice-departments-get-tough-approach.html?_r=0

If anyone out there resembles me – has as much of an interest in bad leadership and followership as in good leadership and followership – check out these two corporate cases. First the emissions scandal at Volkswagen – a story that broke a year ago. Second the sales scandal at Wells Fargo – a story that broke in recent weeks. Both will go down in the annals of the history of business as leadership and followership gone miserably wrong. Here five key questions that pertain to both companies:

• Where on the organizational hierarchy does responsibility lie?
• Who should still be punished – Wells Fargo has already fired more than 5,000 employees; but no one at or near the top has paid any sort of price for tolerating or even encouraging fraudulent practices – and for what exactly?
• How did the wrongdoing start – and morph over time into a toxin that poisoned the entire corporate culture?
• What does this tell us about the gaping hole between ethics in theory and ethics in practice?
• What can be learned from these cases – and what can be taught based on these cases?

Wells Fargo CEO, John Stumpf will be testifying this week before a fired up Senate Banking Committee. Good. Moreover, the bank has already agreed to pay a fine, and enter into an enforcement agreement with regulators. Also good. Volkswagen will pay much more dearly. Costs to the company for cheating on emissions tests are already calculated at over $20 billion. Even better.

Still, this sort of public purification will teach us nothing. For us in any enduring way to extract benefits from the costs will require two things. First, some leaders, some individual high flyers, will have to pay a visible, palpable, price. Second, we must get to the dark, dirty bottom of what happened as if our lives depended on it. Which, of course, they do.

Very few living American leaders have been able to retain their dignity. Very few living American leaders have been able to stay widely respected and deeply admired. Very few living American leaders have been able to remain clean while swimming in dirty waters.

An exception has been former Secretary of State, and Four Star General Colin Powell. An exception until now. Now that his e mails have been hacked, his veneer has been stripped bare. Not that he’s been knocked off his pedestal altogether. But he’s askew, his perfect persona rendered imperfect, less elegant, judicious, and moderate than he had led us to believe.

Apart from describing Donald Trump as a “national disgrace,” and apart from describing Hillary Clinton as “greedy” and filled with “unbridled ambition,” there’s something about Powell’s calling two of his former colleagues (Donald Rumsfeld and Dick Cheney) “idiots” that’s unseemly. Not wrong, mind you, but unseemly –  unbefitting a man like Powell who has regularly been seen as being above the fray, the fray presumably beneath him.

So we reap what we sow. Another American leader bites the dust. Another instance of changes in culture and technology twinning to tarnish a man who spent a lifetime polishing his exterior.

Intermittent fixtures of this blog have been posts titled, “Putin Patrol.” But today’s “Putin Patrol” piece is unlike every other “Putin Patrol” piece. Up to now they have all reeked of fear and loathing. Today’s is a departure – it amounts to an inordinately reluctant tip of the hat.

I, like most Americans even dimly aware of his record, have nothing but contempt for the man of whom John McCain memorably said, “I looked into Putin’s eyes and saw three things – a K a G and a B.”  However, as an inveterate student of leadership, I cannot help but acknowledge Vladimir Putin’s exceptional leadership skills.

Unlike Donald Trump, who admires Putin for being strong at home, I do not. What’s most impressive about him is his exceptional capacity as a strategic player abroad, on the global chessboard. Wherever he has detected weakness, in the US, in Europe, in Asia, he has exploited it, with few exceptions to his considerable political benefit.

It’s hard to recall where Putin was just five years ago. On the global stage – nearly nowhere. Russia had been weakened and Putin was a bit player, puny in comparison with his most obvious counterpart, President Barack Obama. Since then though it is Russia’s influence that has greatly grown, while America’s has badly shrunk.

How did this come to pass? It began when Obama pulled back from his own “red line,” in Syria. When after a year of threatening “enormous consequences” if Syria used chemical weapons, Obama blinked, he backtracked, he backpedaled.  Instead of risking unilateral action against the Assad regime, Obama, operating from a position of weakness, in consequence of his failure  to make good on his threat, brought Putin into the diplomatic process. To broker a deal that would get Assad to destroy his chemical weapons, Obama desperately needed Putin’s cooperation. Which explains why the former opened the Pandora’s Box that let the latter get out.

Since then Putin’s power in foreign affairs has expanded exponentially. Wherever he saw that a door might be ajar, he pushed it open, usually (though not always) to his considerable personal and political benefit. In Crimea. In the Middle East. Most recently, ironically, in the United States, where Russian hacking has already intruded on the presidential campaign – and could become downright insidious.

To those (like me) who see leadership as being value free – inherently neither good or bad – Putin could be described as being in an important way a “good” leader. He is not ethical. But as a global player he sure as hell has been effective.

Here’s what’s troubling. It’s not Hillary’s health per se. No great surprise that she developed pneumonia. The extreme stress, the relentless fatigue, the constant shaking of countless hands – these alone might make any of us fall ill.

What’s troubling is that it took from Friday to Sunday for Clinton’s condition to be publicly disclosed. For 48 hours even the prying press remained in the dark, suspecting for at least part of that time something was wrong, but lacking confirmation from the candidate’s campaign.

Leaders are like you and me. They get hurt – to wit President Ronald Reagan. They get sick – to wit President Dwight Eisenhower. They get knocked out of the picture altogether – to wit President Woodrow Wilson.  They get traumatized – to wit President Calvin Coolidge. They get afflicted by a chronic disease – to wit President John Kennedy.

But, leaders are not like you and me in that their well-being impacts ours. Especially at the presidential level, leaders are responsible for their followers’ health and welfare – which is why, in recent times, the norm has been full disclosure. Certainly in the 21^st century, the assumption has been that presidents, and presidential candidates, owe it to the American people to level with them about their physical condition.

This year, alas, is, again, different. Neither Donald Trump nor Hillary Clinton has seen fit to be fully forthcoming about the state of their health.

For Hillary this persistent passion for privacy is potentially seriously damaging. First, it feeds right into the already existing narrative about her, which is that she is obsessively secretive.  Second, this latest act of concealment comes at a time when her campaign for the White House seems to be slowing. Her poll numbers are down; Trump’s are up.

If Clinton fails to break with her pattern of the past – if she fails to be even a smidgen more open – questions about her health will only get louder and last longer. Sad to say but behavior as rigid as hers has been up to now could end politically suicidal.

Petri dishes are used for growing things – microorganisms that might turn out to grow. Or, they might turn out not to grow.

Such is Hong Kong – a petri dish for a democratic movement that might that might turn out to grow. Or, it might turn out not to grow.

If you’re interested in the tension between democracy and autocracy, you could do worse than to keep your eyes trained on Hong Kong. Ever since the abortive but exceedingly important Umbrella Revolution (or Movement) of two years ago – during which primarily young political activists protested China’s growing control over what they perceived their domain – Hong Kong has been a focal point, potentially a flash point. On the one hand is China, which has grown more oppressive, repressive. On the other hand is Hong Kong, which now is part of China but which, for historical reasons, is distinct from China. As a result, Hong Kong denizens have grown increasingly, if still cautiously, resistant to China’s increasingly heavy hand.

Just last Sunday were elections in which pro-democracy politicians managed to snag 30 of the legislatures’ 70 electoral seats. This in spite of the fact that the system of voting was designed, rigged if you prefer, to favor China loyalists. Moreover, one of the elected legislators was a leader of the 2014 pro-democracy protests, who previously, not incidentally, was sentenced to 120 hours of community service for his political activities.

This drama is by no means over. Likely we’re only in Act One. It remains to be seen how Beijing will respond to this latest turn of events. And it remains to be seen how, in turn, Hong Kong will respond to Beijing’s response. Stay tuned.

Germany’s Chancellor, Angela Merkel, is one of the most powerful leaders in the world. She is also one of the most successful leaders in the world. For over a decade she has presided over one of the world’s most peaceful and prosperous democracies, her leadership essentially unchallenged.

Last year she used her formidable clout to do something unprecedented: to admit into Germany over one million refugees, most from the war torn Middle East. This single decision – either brave and bold or dangerous and foolhardy, depending on how you look at it – has cost her dearly.

This past weekend, Germany’s now highly motivated right wing party, the AfD or Alternative for Germany, beat Merkel’s ruling Christian Democrats into third place in important state elections. This humiliating result has been viewed as a referendum on Merkel’s immigration policy – and, also, on Merkel herself. It’s shot across her bow, a warning to the Chancellor that before next year’s general elections, attention better be paid.

Merkel’s pro-Europe policy is similarly vulnerable, especially in the East, which previously could be counted in the EU (European Union) camp. Just recently she visited Warsaw to meet with East European leaders, including those from Poland, Hungary, the Czech Republic, and Slovakia. Of course the gathering was cordial enough. But, it was equally clear that each of Merkel’s East European counterparts had grave reservations about both cornerstones of her policies – on immigration and (EU) integration.

The judgement of history will be kind to Angela Merkel. But unless she reverts to the caution that historically was her hallmark, her short term future will be harsher.