In the lawsuit, which was filed on Monday, shareholders said that SVB failed to share how interest rates had compromised its business model. This begs the question: Is it always necessary for executives to be transparent in moments of crisis?
Some might argue that if the bank’s executives were open to stakeholders, its employees and the public, then that would have sealed the business’ catastrophic fate, as deposits would have been withdrawn faster and the bank may have collapsed earlier.
Reportedly, employees received their yearly bonus hours before regulators seized the bank.
Despite this, employees have criticised SVB’s CEO for a lack of honesty. In a video message sent on Friday to the bank’s 8500 employees, Becker said: “It’s with an incredibly heavy heart that I’m here to deliver this message. I can’t imagine what was going through your head and wondering, you know, about your job, your future.”
“I have an ask, and it’s a completely unfair ask,” Becker continued. “My unfair ask is this: Can you guys just hang around, try to support each other, try to support our clients, work together to what may be a slightly better outcome to where we are right now?”
In the shape-shifting wake of COVID-19, companies the world over are renewing efforts to improve operational efficiency and cut costs, anticipating the difference these actions could make to their longer-term business performance.
The pandemic exposed lingering structural problems in payroll, revealing a pressing need for the function to evolve from unpredictable and reactive to data-driven and strategic.
These issues look set to intensify as firms face ongoing difficulties in recruiting payroll professionals with sufficient strategic, technical and analytical know-how.
Download this report to learn:
Why payroll maturity matters
The three phases towards transformation
The technological capabilities needed to expand
According to The San Francisco Standard, any empathy from employees soon turned into anger as it was revealed that Becker sold $3.6 million (£2.6 million) in company shares days before the bank’s losses were officially disclosed. This was especially frustrating for employees with a stock in the company as it was now essentially worthless.
The gravity of the fast collapse can be seen in the impact it has had on many businesses. Beyond SVB’s internal employees, its depositors were primarily tech start-ups who were subject to the risk of losing deposits and potentially not being able to pay their employees.
American Investor and Entrepreneur David Sacks told The Megyn Kelly Show: “There are 40,000 small businesses who use SVB, and 10,000 of them were in danger of missing payroll on Monday and having to lay off employees because they couldn't get to their cash.
“If you subject small businesses to the risk of losing their deposits, we are going to have runs on the banks just like that Jimmy Stewart movie, and we are going to be right back to the Great Depression...”
Create a free myGrapevine account to read the latest HR news and analysis, and personalise your experience.