MISSION INTANGIBLE

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MISSION:INTANGIBLE, the blog of the Intangible Asset Finance Society, offers critical comments on intangible asset, corporate reputation, and finance; supplemented by quantitative reputation metrics. Intangible assets include business processes, patents, trademarks; reputations for ethics and integrity; quality, safety, sustainability, security, and resilience; and comprise 70% of the average company's value. MISSION:INTANGIBLE is a registered trademark of the Intangible Asset Finance Society.

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Regulators Leverage Fund Managers to Up Pressure On Boards

C. HUYGENS - Tuesday, September 05, 2017
Increasing pressure from regulators and politicians worldwide to.

“…hold companies to account on excessive executive pay, a lack of gender diversity and inaction on climate change. ”

Read more in Financial Times.

Financial Risk Body Armor Needed

C. HUYGENS - Sunday, August 27, 2017
Repeated blows to reputation will eventually cause the financial equivalent of dementia. For qualified companies and their leadership, reputation risk solutions can be life saving.

Read more in Risk & Insurance.

Wells Fargo Drops Yet Another Shoe

C. HUYGENS - Friday, August 04, 2017
Reputation risk cost is often high because of losses initially not visible, like the submerged mass of an iceberg.

“Wells Fargo said that the number of fake bank accounts set up by its staff could be significantly higher than previously thought and warned investors that it risks further regulatory investigations into a new scandal over car insurance.”

Strategies to convince stakeholders there isn't an iceberg just below the surface—which will work as long as the assertion is true—include warranties on governance and related transparent financial products.

Read more in the Financial Times.

Wells Fargo Digging Deeper Hole for Board

C. HUYGENS - Sunday, July 30, 2017
Senator Warren calls (again) on Fed to remove Wells Fargo board members, report Reuters, after The New York Times reported Friday that more than 800,000 Wells Fargo customers were charged for auto insurance they did not request. Activists such as Scott Stringer, who oversees public pension funds that hold roughly 11.6 million Wells Fargo shares, wants a new Chairman at least.

In a letter sent Friday to Yellen, Warren, a Democrat, said the recent revelation of more improper charges at the bank indicates "deep risk management problems," and called for the removal of all board members who served from 2011 to 2015, when the activity reportedly occurred.

The question stakeholders must be asking is "exactly how big is that iceberg of unethical behavior that has not yet been disclosed?"

Until Wells Fargo can authentically communicate to stakeholders that all that is being disclosed now comprises "sins of the past," they will continue to be on a downward reputational spiral. And with the battle over regulatory controls looming in Congress, as Kate Berry reports in American Banker, the bank's risk of further reputational damage with regulators is undercutting its objective of eliminating the CFPB.

Read more in the New York Times.

Wells Fargo: Regulators and Litigators Want Board Member Scalps

C. HUYGENS - Thursday, June 22, 2017
Regulators and litigators want board member scalps--Buffet may be outgunned. The reputation crisis at Wells Fargo now enters the regulatory phase, which by Steel City Re's metrics, is typically a very costly process.

"I urge you to exercise your legal authority to remove the holdover Wells Fargo Board members. Federal Reserve regulations and guidance impose clear risk-management obligations on the Board — obligations that are quite demanding for a bank as large and complex as Wells Fargo," Warren wrote. "The Board did nothing to stop rampant misconduct in the Community Bank that resulted in more than 5000 bank employees creating more than two million fake accounts over four years."

Read more in Business Insider.

Board Allowed Long-lasting Reputational Damage to Wells Fargo

C. HUYGENS - Wednesday, June 21, 2017
Senator Warren, writing to the Fed demanding the removal of all 12 directors of Wells Fargo…

…argues in the letter that the directors failed in their risk-management obligations, resulting in "massive financial losses" and "long-lasting reputational damage to the bank that has eroded the bank's customer base."

Read more in the Business Insider.

Paying Down the Costs of a Reputation Crisis

C. HUYGENS - Tuesday, May 09, 2017
More going-forward costs of #reputation #risk -- now burning furniture.

San Francisco-based bank Wells Fargo & Co. is considering selling its insurance brokerage unit for about $2 billion, Bloomberg reported Tuesday.

Citing “people familiar with the matter,” Bloomberg said Wells Fargo is contacting private equity firms to determine the interest in Wells Fargo Insurance Services USA Inc. The bank is planning to move forward with a sale, Bloomberg reported, but it hasn’t set a timeline for holding a formal auction, one of the people said.


Read more in the Business Insurance.

Paying the Ongoing Costs of a Reputation Crisis

C. HUYGENS - Monday, May 08, 2017
#Reputation #Risk “Corporate names are resilient: when their images get damaged, a change of management or strategy will often revive their fortunes. But personal reputations are fragile: mess with them and it can be fatal,” wrote John Gapper for the Financial Times in August, 2016.

Wells Fargo is preparing to unveil new cost-cutting measures as the scandal-hit US bank tries to rebuild Wall Street’s confidence after a bruising annual meeting with shareholders.

Tim Sloan, chief executive, is this week expected to reveal plans for annual savings at Wells, the world’s third-biggest bank by market capitalisation, of as much as $3bn — on top of an existing $2bn expense-reduction plan.


Read more in the Financial Times.

Wells Fargo: Legal Bills Pile Up

C. HUYGENS - Friday, May 05, 2017
#Reputation #risk Entry level losses based on 6000 events average 24% market cap, 13% sales, and 12% net income. Values vary by industry sector, year, and underlying causes.

Wells Fargo has warned its litigation bill could be $200m higher than previously thought as the US bank sheds new light on a series of lawsuits it is facing over the bogus account scandal.

In a quarterly filing on Friday, Wells said “reasonably possible” losses from legal actions against it could exceed its existing provisions by $2bn — up from a $1.8bn figure it disclosed three months ago.

The document shows how lawsuits are piling up against Wells after thousands of its employees, under pressure to hit sales targets, turned to fraud. Workers signed up as many as 2.1m customers for cards and accounts over several years without their authorisation or consent, in some cases faking signatures.


Read more in the Financial Times.

Wells Fargo: Crediting the regulators

C. HUYGENS - Thursday, December 12, 2013
In a comment on Wells Fargo last week, reputation consultant Jonathan Salem Baskin wrote, "the Feds are forcing Wells Fargo to improve its reputation and, as a huge consumer-facing brand because of the nature of its business, it can’t help but communicate that operational rigor to its customers." Do the metrics bear him out?

The Consensiv reputation metrics, powered by Steel City Re's measures of reputational value, reflect stakeholder expectations and their economic effects. Of the 49 firms in its sector, Major Banks, Wells Fargo has generally hovered above the third quartile of the metric, Reputation Premium. Its most recent value was the 88th percentile. Its stakeholders are confident that this premium is appropriate as evidence by an extremely low Consensus Trend metric of 1.6%. This is especially notable since the 3rd quartile of the Consensus Trend measured off the scale at nearly 300%. The Consensus Benchmark,which is based on a one-year average standard deviation of the Reputation Premium, indicates at 8.1% a previously more volatile course. In short, Mr. Baskin is correct; it appears, the "Fed's made 'em do it."



For more background on the Consensiv reputation controls, click here. To view the November 2013 reputational value league table, based on Consensiv's metrics, and available exclusively at CFO.com, click here.

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