Dive Brief:

• The New York Times (NYT) reports that an external review of the Wells Fargo saga uncovered 1.4 million more fake credit cards and bank accounts in customers' names, bringing the total number to 3.5 million. Almost a year ago the bank agreed to pay $185 million dollars to settle allegations that it encouraged employees to open the unauthorized accounts to meet sales quotas. The bank now will be required to pay $6 million to customers in refunds.
• Reviewers also found that the bank charged 800,000 customers for insurance they didn't need when they took out loans to buy cars, says the NYT. The bank is also accused of modifying home loans without owners' knowledge.
• Soon after the original scandal broke, John Stumpf was forced out as CEO and replaced by Timothy J. Sloan, a 30-year veteran with the bank, and the bank fired 5,300 workers. NYT says that Sloan represents a throwback to the bank's pre-scandal days. But Fortune questions whether the bank can survive the scandal.

Dive Insight:

Not all high-profile companies caught up in scandals over the years have survived. Enron was felled by an alleged financial cover-up and Arthur Andersen, charged with book-cooking for Enron, did not survive either. Corporate misconduct often stems from an unethical culture, rather than an occasional incident. Uber, for example, is trying to rebuild its culture following sexual harassment and sex discrimination allegations. Unless these companies also adopt ethical codes of conduct, merely replacing their top executives or CHROs will not end the bad behavior.

Ethics scandals not only generate bad headlines, but they have a direct impact on employees and on a company's ability to attract and retain talent. A recent study by Gartner, Inc., a research and advisory company, found that only one in four employees think their colleagues behave ethically. And a study by Navex Global, an ethics and compliance services company, found that companies across the globe are slow to train their leaders in avoiding corporate scandals and disasters.  

An ethical organization starts with accountable leadership. Led by HR, CEOs and other high-level executives must set a high moral code of honesty and trustworthiness to which they hold themselves and everyone in their organizations accountable.They also enforce these standards.  

Leaders of ethical organizations also set internal rules of conduct, such as restrictions on email content and the appropriate use of social media. Also, ethical companies fully and immediately abide by government and EEOC mandates on sexual harassment, discrimination, workplace safety and labor practices. Rules of conduct should be outlined in employee handbooks, which employees should be required to sign as proof that they read the rules and understand the consequences for violating them.