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Culture: What you expect, what you accept

There’s your code of conduct, and then everyday business life. Do they synch?

“There’s really not much that indicates we’ve learned anything new over the last several cycles,” says veteran lender and CEO Ed O’Leary. He aims to fix that. “There’s really not much that indicates we’ve learned anything new over the last several cycles,” says veteran lender and CEO Ed O’Leary. He aims to fix that.

As a father of four, all of whom are at least in early middle age, I thoroughly enjoy talking to my kids about their workplace experiences. The other day, for example, my clergyman son in a discussion of workplace culture at his church told me “Culture is a combination of what you expect and what you accept.”

That’s a good description of how cultures develop and become “baked into” the enterprise. I was surprised—though I shouldn’t have been—that I heard that bit of wisdom from this particular son. Once again I was reminded that workplace behaviors are mostly generic in nature, with few having special characteristics peculiar to a particular job title or an industry.

One very useful thing about culture is its ability to sustain and reinforce certain types of attitudes and behaviors. That’s an important and largely a constructive factor for a bank, though as organizations grow in size and diversity of activities, any culture can be very difficult to maintain or enforce

The principal force of culture is to promote a uniformity of attitudes and behaviors. In the long run, significant “outliers” in the culture sense are eliminated either by forced terminations or an ultimate realization by the individual that the environment is not hospitable to his or her long term career goals and work satisfaction. (In other words, “I don’t fit here.”)

“I’m too loud”

The most startling example of this to me occurred several years ago with a boss who was then an executive officer of my bank. The bank’s executive suite was the entire third floor of a downtown high rise. My boss had just assumed a significantly expanded new role and high title.

The next day I ran into him on the elevator and he was carrying a large box of materials from his desk. He explained that he was moving that day to his new office on three but then remarkably said, “I don’t belong there. I’m too loud.”

If I ever heard truth, it was that day.

Yes, he was loud. He was garrulous, friendly, well met, and a very physical sort of man who could hardly talk to you without his arm around your shoulder. Everyone to the last person loved him—and would have done anything for him.

He left a year or so later out of frustration in the midst of some extreme problem asset difficulties and management turmoil. He accepted a job as CEO of a similar-sized bank in a nearby state where he worked happily and successfully for three or so years.

Then, the grapevine told us, he was fired for a sexual harassment issue. Apparently he put his arm around a female staffer (his preferred way of addressing anyone, male or female) and was dismissed upon the employee’s claim of harassment. There’s no defending that sort of behavior, but I’m convinced that it wasn’t malicious or premeditated. It was just the man himself.

This example has elements of both culture and personal decorum and the corporate landscape is certainly changing with respect to personal behaviors and allegations of sexual harassment.

“How about them Yankees?”

Another cultural example that I still chuckle about many years later occurred in Midland, Texas. I was quite new to the bank and talking with a small group of credit committee members in the hallway following a meeting.

In addition to me, there was a man who had grown up in Connecticut and was brusque, businesslike, and sort of “standoffish.”

The two or three others that morning in that brief conversation included home-grown Midland bankers who would fit any Hollywood casting model of a typical Texan. Bill, of Connecticut, finished his remarks and left. One of the Texans said in an audible voice “That damned Yankee.” Then he spotted me and was immediately flustered and embarrassed. He blurted out, “But Ed, you’re a good Yankee.”

That told me volumes about the culture and while it didn’t offend me, it did put me on notice that I would be judged by my co-workers in large part by criteria not normally contemplated in any credit-related job description.

“Best behavior” gets broader definition

Personal behaviors are a fertile source of terminations for bankers, probably exceeding such a basic reason as professional competence. This is why banks feel they need Code of Conduct statements so employees may have a clear sense of acceptable behaviors. Most of us think about conflicts of interest as the focus of these statements and codes, but they have become much broader than that.

Will a community bank tolerate public intoxication by an officer or employee?   What about a senior officer, married, consorting with a staffer in a less-than-discreet way? Some environments may be tolerant of such behaviors while others are not.

The simplest code of conduct statement I ever saw covered two or three pages in length. The code began with the opening declaration that the company “shall tolerate no employee behavior that causes embarrassment to the bank.” Then there were some specific examples of the range of what that simple principle meant. It was remarkably clear to me though I have only seen this principle stated once this way and wondered why others have not picked up on the simplicity and clarity of the declaration.

In the years since the Great Recession and the revelations of corporate misdeeds that created our industry’s extreme levels of reputation risk, we seem to be confronted with new ways that behaviors of some employees continue to plague us.

It’s never the wrong time to look carefully at our human resource policies and “squaring” them with a very honest assessment of our culture. What behaviors will you simply not tolerate? You should give that some thought right now, as you will probably be challenged in such a way before too long.

Credit culture within bank culture

Credit policies get dated—stale, if you will, and a ruthlessly calculated credit and collateral exceptions list will highlight how practices and policies may have diverged over time. The same is very likely true for the HR policies.

Culture can help the staff by creating clear norms of behavior. The mistake we frequently make is assuming that employee behaviors are a consistently accurate reflection of our policies. Yet, as my son instructs, culture is the sum total of the behaviors we accept. Any infraction of an internal credit control that gets the occasional wink or nod is undermining the credit culture of the bank. Yet we often look the other way because the matter seems trivial.

Any experienced manager will tell you that a new hire will assimilate the culture of the workplace in a day of observing than a week of reading policy manuals.

Ed O’Leary

Banking Exchange Contributing Editor Ed O'Leary, a veteran lender and workout expert, spent nearly 50 years in bank commercial credit and related functions, working with both major banks as well as community banking institutions. His last job before retiring was as the CEO of a regional bank headquartered in Alburquerque, N.M. He earned his workout spurs in the dark days of the 1980s and early 1990s in both oil patch and commercial real estate lending. O'Leary began his banking career at The Bank of New York in 1964, and worked at banks in Florida, Texas, Oklahoma, and New Mexico. He served as a faculty member and thesis advisor at ABA's Stonier Graduate School of Banking for more than two decades, and served as long as a faculty member for ABA's undergraduate and graduate commercial lending schools. Today he works as a consultant and expert witness, and serves as instructor for ABA e-learning courses. You can e-mail him at [email protected]. O'Leary's website can be found at

In mid-2016 O'Leary's "Talking Credit" blog received a bronze excellence award for the Northeastern Region from the American Society of Business Publication Editors.

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