In a scathing report (available here), the independent directors at Wells Fargo released their findings and actions based on a comprehensive internal investigation of Wells Fargo’s sales abuses.

Based on its findings, Wells Fargo’s independent board took steps to clawback an additional $75 million from former CEO Stumpf and head of Community Banking Carrie Tolstedt for sales abuses resulting from the sales incentives program.

The investigation report is worth reading. The directors found that the root cause of the sales practice failures was a decentralized management structure, coupled with an aggressive sales program directed and controlled by senior management in the Community Banking operation. As a result, employees sold unwanted and even unauthorized accounts to customers to meet management sales targets.

While the report lays blame in Wells Fargo’s decentralized management structure, a closer read shows how senior corporate executives, including Carrie Tolstedt were able to resist oversight and accountability, while CEO Stumpf and the board of directors failed to exercise proper oversight and accountability to uncover and prevent the disturbing sales practices, the termination of numerous employees for failures to meet stringent standards or engaging in misconduct to reach applicable targets.

CEO Stumpf in the end is called out on his failures to intervene, to blindly rely on Carrie Tolstedt, and avoid meaningful oversight and review of relevant information. CEO Stumpf’s attitude was overly optimistic and reflected a wholesale denial in the face of real and serious questions about problems created by the sales incentives program. His failure to act is perhaps the most damning portrait of all.

Carrie Tolstedt is described along with her executive colleagues is described as a leader who resisted inquiries, management oversight, and questioning of her authority.  She deliberately mislead the board by understating problems resulting from teh sales incentive program.

The independent directors report, however, casts fair criticism on the Risk Management Committee of the board, the nascent and immature oversight of risk within the bank, and failures to delve into information about the number of terminated employees in response to the sales incentives program.  The Risk Committee’s failure to ask for basic information was highlighted by one simple and glaring omission – it never knew the number of terminations of employees, which was over 5,000 and a major red flag, in response to the sales incentives program, until Wells Fargo settled its initial enforcement action.