The Threat of a Challenge: Bank of America and WikiLeaks

US banks have few friends after being at the center of the last global, economic meltdown.  Among the villains was Bank of America.  In November of 2010, WikiLeaks director Julian Assange claimed he would expose a US major bank’s documents that would take down the bank by exposing an “ecosystem of corruption.”  Bank of America was believed to be the target and its share prices began to drop.  There was a rebound but when the story reappeared at the start of 2011, prices began to drop again.  It is believed that WikiLeaks has some 600,000 pages of Bank of America documents that it plans to release online (http://www.huffingtonpost.com/2010/12/01/bank-of-america-wikileaks_n_790253.html).  Again, this is supposed information, nothing has been posted.  The information supposedly comes from the hard drive of a Bank of America executive (http://blogs.forbes.com/andybeal/2011/01/03/bank-of-america-banking-on-a-reputation-crisis/).

Now experts have been offering advice.  A reasonable piece of advice is to disclose any negative information before WikiLeaks does.  The “Stealing Thunder” research says people react less negatively to a crisis when the organization itself releases the information than when the information is first reported by the news media (or in this case new media).  But there are two concerns here.  First, what if WikiLeaks does not have the information Bank of America chose to disclose?  How does Bank of America decide what to disclose in a preemptive release?  The WikiLeak bluffer would have forced Bank of America into admitting it wrongdoings.  Second, any actions taken by Bank of America are likely to trigger reputational damage.  People will assume that if Bank of America is preparing for damaging leaks, it has done something bad.  Why worry if you have nothing to hide?  Still, Bank of America cannot afford to do nothing (pardon the poor phrasing there).  Decisions made by large organizations are bound to have negative effects on some stakeholders.  Those stakeholders may not like how they were evaluated or treated in those decisions.  Hence, Bank of America might not have any legal or ethical concerns to hide but may just face reputational damage from a review of its decision making process. 

Bank of America has been preparing.  According to the New York Times:

“a team of 15 to 20 top Bank of America officials, led by the chief risk officer, Bruce R. Thompson, has been overseeing a broad internal investigation — scouring thousands of documents in the event that they become public, reviewing every case where a computer has gone missing and hunting for any sign that its systems might have been compromised.

In addition to the internal team drawn from departments like finance, technology, legal and communications, the bank has brought in Booz Allen Hamilton, the consulting firm, to help manage the review. It has also sought advice from several top law firms about legal problems that could arise from a disclosure, including the bank’s potential liability if private information was disclosed about clients.

The company’s chief executive, Brian T. Moynihan, receives regular updates on the team’s progress, according to one Bank of America executive familiar with the team’s work, who, like other bank officials, was granted anonymity to discuss the confidential inquiry” (http://www.nytimes.com/2011/01/03/business/03wikileaks-bank.html?partner=rss&emc=rss).

Again, these defensive actions by Bank of America are necessary yet place them at risk as well.  Stakeholders begin to wonder what is in these documents that Bank of America needs to fear?  Are the concerns legal, regulatory, ethical, or simply something some stakeholders will find unappealing?  We may never know the answer to these questions.  What we do know is the threat of what some call radical transparency has reputational implications for an organization and may even precipitate a crisis.  Radical transparency can be defined as when an organizations information is disclosed, without any editing, for all stakeholders to see.  In most cases this disclosure would be provided by a third party rather than the organization itself.  Consider how decision making documentation by Ford in the Pinto case and BP in the Texas City tragedy showed how managers treat people as numbers making death and injuries just part of an equation.  Though often a business reality, stakeholders are often appalled when the details or corporate decisions are revealed.  Bank of America is in a no win situation that could get worse or simply disappear if the documents never emerge onto the Internet.

Questions to Consider:

1. What are the ethical concerns regarding the disclosure of corporate documents by a third party such as Wikileaks?

2.  What advice would you give management at Bank of America and what is the rationale behind that advice?

3. What is the role of the Internet and social media in this case?

4.  Why would media outlets be reporting this story?

5.  Why would stakeholder be interested in a story about something that may never happen or information that does not exist?

6.  What does this case say about how stakeholders in general feel about US banks?

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