In recent years, employees have increasingly been stripped of their right to be human – to be living beings with the natural ability to think freely, feel, and respond. The widespread stoic behaviour exhibited by employees stems from organisational cultures that are solely focused on financial profit. The adoption and propagation of this approach have, over time, had detrimental effects on key internal stakeholders. Moreover, past trends have shown how such organisational cultures have precipitated adverse consequences as a result.

The King IV Report on Corporate Governance^TM urges organisations to self-govern ethically. While the report primarily emphasises the role of the board and senior leadership, this does not absolve employees of their ethical responsibilities. When managed and implemented effectively, ethical conduct cascades from the highest to the lowest level of employee. Drawing lessons from the Wells Fargo scandal, this piece seeks to highlight the urgency for organisations to take bold steps in transforming their organisational cultures for the benefit of employees. This task must be seen as an imperative, not a choice. Without intentional implementation, employees will bear the brunt of a defective organisational culture.

The Wells Fargo scandal has, in recent years, ignited significant discussions regarding unethical and unscrupulous behaviour and its far-reaching effects. Numerous news outlets have attributed the scandal to a “warped corporate culture, a decentralised organisational structure, and poor leadership,” which drove employees to fraudulently open accounts on behalf of customers without their knowledge. It is alleged that employees resorted to this to cope with immense pressure to meet sales targets. In 2013, the then Chief Financial Officer dismissed such claims, stating, “I’m not aware of any overbearing sales culture,” and emphasised that the organisation had established adequate systems and controls to discourage such behaviour. These controls included handbooks on sales violations, ethics programmes on conflicts of interest, a whistleblower line, and an employee incentive system aligned with best practices. However, in 2016, the company admitted that employees had opened up to two million accounts over a five-year period without customer consent. Following these revelations, in 2023, further lawsuits were filed against the organisation by former employees citing unfair labour practices.

Regrettably, organisations like Wells Fargo have suffered significant reputational damage from such scandals. Trust from both internal and external stakeholders gradually diminishes, and organisations once considered employers of choice no longer hold this prestige. As the saying goes, “Rome was not built in a day,” and research has shown that rebuilding an organisation’s reputation is far more challenging than damaging it. According to Mohiya Mohammed’s What Constitutes an Employer of Choice? a Qualitative Triangulation Investigation, factors such as company image, training and development, employee satisfaction, involvement and commitment, fairness, work culture, rewards, opportunities for growth, teamwork, motivation, and corporate social responsibility are key elements that lead employees to regard an organisation as an employer of choice. Additionally, alignment of personal values with those of the organisation is another major contributor. A lack of these attributes makes organisations far less appealing to both job seekers and current employees.

Be that as it may, not all employees in the South African context retain their jobs due to these attributes. For the average breadwinner and sole provider in a large, extended family striving to break the cycle of poverty in a country plagued by numerous social ills, such as unemployment, the alignment of personal values with those of an organisation is likely one of the least important factors influencing their decision to stay. The majority of employees in South Africa face limited alternative employment opportunities, making the endurance of unethical treatment a norm for many. As a result, employees often become inexpressive, passive, and stoic individuals who simply follow instructions. Consequently, they are not truly valued by their employers.

One of the key concerns surrounding the rise of Artificial Intelligence (AI) is the displacement of human workers. Are organisations devaluing and under-compensating their employees because AI presents an alternative, making them easily replaceable? Are poor working conditions being imposed on employees for the same reason? When did we reach the point where employees have become inanimate—devoid of mental capacity, autonomy, and agency to perform tasks? When organisations fail to prioritise and embed ethics, low-level employees often become scapegoats for the lack of ethical compliance. As a result, redundant so-called “systems and controls” have become mere façades, used by many organisations to appear compliant with ethical standards rather than to truly implement them.

An organisation faces an ethical deficit if the balance tips towards self-interest over consideration for others. For the foreseeable future, this article urges organisations to recognise their employees as human beings, not as expendable objects. The Ethics Institute defines ethics and morality as the practice of considering not only what is good for oneself but also what is good for others. If employees are excluded from this equation, where then do ethics and morality truly reside?

About the author: Siphiwayinkosi Mdluli is an Organisational Ethics Intern at The Ethics Institute.