The article in the url below presents a pretty compelling argument in favor of CSR:
“The six biggest U.S. banks, led by JPMorgan Chase & Co. (JPM) and Bank of America Corp., have piled up $103 billion in legal costs since the financial crisis, more than all dividends paid to shareholders in the past five years. That’s the amount allotted to lawyers and litigation, as well as for settling claims about shoddy mortgages and foreclosures, according to data compiled by Bloomberg. The sum, equivalent to spending $51 million a day, is enough to erase everything the banks earned for 2012.”
“JPMorgan and Bank of America bore about 75 percent of the total costs, according to the figures compiled from company reports. JPMorgan devoted $21.3 billion to legal fees and litigation since the start of 2008, more than any other lender, and added $8.1 billion to reserves for mortgage buybacks, filings show.”
Numbers like that represent either a lot of wrongdoing or overpaid lawyers (or both). Either way, it does not suggest well-run organizations that are structured around meeting the needs of their stakeholders, broadly defined. Don’t you just hate it when the statute of limitations will not come round fast enough?
“The legal process could be extended if the U.S. attorney general brings more cases and unearths information that can be used in new lawsuits. While some cases have a five-year statute of limitations, those involving bank frauds have a deadline that’s twice as long. The Financial Institutions Reform, Recovery and Enforcement Act, known as FIRREA, has a 10-year limit, and the U.S. used the law against JPMorgan and Bank of America.”
Have a good weekend.
David Chandler & Bill Werther
Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
U.S. Bank Legal Bills Exceed $100 Billion
By Donal Griffin & Dakin Campbell
August 28, 2013