Corporate and investment banking CEO Jon Weiss on identifying priority areas and trying to bring ‘excellence’ to delivery.

Jon Weiss

Jon Weiss

“No one’s going to accuse me of being an advocate for revolutionary change,” reflects Jonathan (Jon) Weiss, nine months into his tenure as CEO of corporate and investment banking (CIB) at Wells Fargo. “I’m more of a gradualist,” he states. At a time when building trust is cited as a key priority — not only within CIB at Wells Fargo, but across the organisation more widely — Mr Weiss’s considered and steady approach is very much a deliberate strategy. “Our strategic priorities start with being trusted by our clients, by our team, by our regulators and our shareholders,” he says. “And if we do that well, if we establish trust appropriately and if we pursue a path of excellence in what we do — excellence in execution, excellence in the advice that we provide a client — natural growth should come from that.”

Career history: Jon Weiss  

2020 CEO of corporate and investment banking, Wells Fargo

2017 Senior executive vice- president, head of wealth and investment management, Wells Fargo

2014 President and head of Wells Fargo Securities

2008 Managing director and co-head of investment banking and capital markets division, Wells Fargo

2007 Managing director and head of investment banking coverage, Wells Fargo (Wachovia)

2005 Managing director and head of financial sponsor coverage, Wells Fargo (Wachovia)

Since acquiring Wachovia (then the US’s fourth largest bank by assets) in 2008, Wells Fargo has been able to significantly upscale its investment banking activity, particularly in debt capital markets where it is a leading player, although in other areas it remains relatively small compared to some of its peers. However, for Mr Weiss, “bigger doesn’t always mean better” and “scale alone isn’t an objective”. Instead, he advocates the approach of “if you prioritise doing the right thing by your clients, the chances are you will pick up some market share”.

Demonstrating that client needs are being put first has been a particularly acute consideration for the bank in recent years, as it seeks to move forward from sales practices misconduct within Wells Fargo’s retail banking arm, which came to the fore in 2016. Although it is important to stress that CIB was not at all implicated in those events, the entire organisation has been impacted by the consequences to some degree.

While Mr Weiss is confident that CIB’s standing with its corporate clients has not been knocked, he is very alive to the importance of not taking their trust for granted. “I think our corporate clients have seen us consistently delivering quality and trusted advice. But that can only be reinforced in every transaction,” he says. “Trust takes a long time to build and it very quickly dissipates if you err. We need to be reinforcing that every step of the way, and making sure that what we stand for is that we’re trusted and we provide expert, unbiased counsel.”

Emerging as a better bank

The most tangible consequence of the fallout from the retail bank is the $1.95tn asset cap which the Federal Reserve placed on Wells Fargo in February 2018, on the basis that its growth would be restricted until it could demonstrate clear improvements in governance. It has remained in place since (albeit with some specific exemptions for business lending in relation to Covid-19 in recent months).

Mr Weiss is philosophical about what the asset cap has meant for CIB. While he accepts that it has “absolutely” had an impact, he believes it has not been an entirely negative one. “It’s easy to deduce that it’s impacted our growth, but I would say there has also been a bit of a silver lining,” he says. “It has caused us to look introspectively and make sure that we understand our priorities. If you have more limited resources to work with, it’s natural to use them more efficiently, effectively and thoughtfully, and manage the risk better. So, as a company, and as a corporate and investment bank specifically, it has made us prioritise more and we will emerge from it a better bank.”

Understanding core principles

Mr Weiss has coined a simple phrase that he uses often with his leaders and the CIB business to emphasise a new way of operating: “simpler, faster, better”. He believes that the bank as a whole has work to do in this area and that this is perhaps its greatest opportunity area. “In the past, we grew into a fairly complex organisation with many different business lines and lots of offerings to different types of clients. Understanding what’s core and what’s non-core, and simplifying the bank, will help us run it better,” he says.

Mr Weiss is not the only senior banker at Wells Fargo to speak in such terms. In October 2019, in his opening weeks as Wells Fargo CEO, Charles Scharf spoke of the importance of “doing everything we can to operate the company to the highest standards of operational excellence”. He made overhauling company structures, to ensure improved accountability and oversight, a key priority during his tenure, including defining five clear business lines within the bank in February 2019 and appointing a CEO to head each one. It was at this point that Mr Weiss became CEO of CIB.

If you have more limited resources to work with, it’s natural to use them more efficiently, effectively and thoughtfully, and manage the risk better

Jon Weiss

These changes are an important part of improving how business is done at the bank, Mr Weiss believes. “I think the title of CEO for each of those business areas is important, because it creates clear accountability,” he explains. “To the point around ‘simpler, faster, better’, there is a more straightforward structure with a clear line of accountability up to a CEO.” He also welcomes the fact that Mr Scharf has been open to making external appointments where appropriate too. “He’s brought in some new talent,” he says. “We’re an organisation that, in some ways, prided ourselves in developing from within — and there are wonderful things that come from that continuity of developing from within — but it’s also important to benchmark yourself constantly to the outside.”

The issue of recruitment and cultivating talent has also come to the fore recently in the context of creating a more diverse workforce, particularly in senior roles. Mr Scharf has attracted some controversy in relation to remarks he made in June about the difficulty of recruiting black talent into senior roles, albeit that these comments were made in the context of acknowledging the need for the organisation to improve on this issue. The bank has also announced a number of high-profile measures to improve levels of diversity.

For Mr Weiss, creating a more diverse workforce within CIB’s ranks is a clearly a priority: “There’s no question that we need a more diverse workforce than we currently have and part of my job is to make sure that I’m constantly looking out for new talent across the board.” He adds that: “Part of the diversity challenge is making sure that the smart pool of people that you have today or bring on board at the entry level is with you, not three years from now, not five years from now, but 10 to 20 years from now, as you’re filling senior positions. And that you’ve developed them well, so that they want to stay. That’s not an easy challenge in any industry, but it’s something we’re committed to addressing.”

Delivering effectively

As these organisational changes have been taking root, the external climate has become more challenging, making the importance of strong operational leadership even clearer. Mr Weiss is proud of how CIB has responded to the operational challenges thrown up by Covid-19. “We turned on a dime from a business that was almost 100% work-from-office, to an organisation that evolved very quickly into a 90% work-from-home structure. And that change occurred really over the course of three weeks,” he says. And rather than seeing any deterioration in service, clients have noticed that they’ve been able to continue delivering effectively.

“In the midst of all of this change, we’ve helped hundreds, if not thousands, of clients to tap capital markets in ways that no one would have thought possible before all this,” he says. “We’ve helped clients achieve strategic ends, including mergers and acquisitions activity, with due diligence that has been almost completely digital. And I think what clients would tell you is that the high standards that they expect from us every day have not changed.”

While the impact of Covid-19 is perhaps the most immediate challenge, Wells Fargo — like institutions across the financial sector more broadly — is facing more fundamental questions about its responsibilities to the wider society.

High corporate governance standards 

Mr Weiss is keen to stress the bank’s broad commitment to environmental, social and governance issues, including within CIB where it has been assisting high profile clients to access the green and social bond markets or considering how to support the development of more environmentally friendly industrial activity, such as renewable energy. But it is within the often-overlooked area of governance where Wells Fargo has perhaps a unique opportunity to make a virtue of its recent difficulties. “We’ve been through our own governance challenges as a company, and I can’t think of a better learning for Wells Fargo coming out of the last four years than to be a standard bearer for what good corporate governance is about,” he notes. “We aspire to having the highest standards that would allow us to set the standard for corporate governance.”

Having a positive impact on society is clearly important to Mr Weiss, believing that banking can be a “noble profession” which plays a vital role in the healthy functioning of the global economy. “I think what’s evolved since the financial crisis is that leaders in financial services have embraced the idea of societal responsibility more openly,” he says. “One of the first things that Charlie Scharf did when he came in as our new CEO, was sign up to a statement from Business Roundtable [an association of CEOs from leading US companies] which sets out that, in addition to our responsibilities to shareholders, we have responsibilities to employees, to customers, to vendors and to regulators; we have responsibilities to multiple stakeholders, which is a more expansive view of the responsibility that the company has in society and I subscribe to that. I don’t think it’s in conflict with making money. I think you can do good and do well at the same time.”

 

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