Linking Integrity and Success – CFOs and UBS

For several years, Peter Wuffli was the CEO of UBS. A former McKinsey consultant, he set the firm on a path of integration—a global organization that would unite investment bankers, wealth managers and asset managers in unified service to the bank’s clients. Under him, the firm articulated the UBS Identity Framework: Vision, Values, Brand, saying

Our integrity is key to preserving our most valuable asset—our reputation.

March 30, 2006: UBS: Toward the Integrated Firm, Harvard Business School Case Study

Wuffli noted: You cannot [ask professionals to share client relationships] without knowing, respecting and trusting each other. When people ask how far we have come, I tell them we are probably halfway into a ten-year process. And you need strategic and leadership consistency. If you change your management every six months, it’ll never happen. We’re one of the few firms that has all that.


June 28, 2007 Investors’ Business Daily, Survey: Integrity is Number One

Integrity is the most important qualification for a successful business leader. That’s the finding of a survey of 1,400 chief financial officers… 31% deem integrity the top quality for a leader. Experience and communication, both at 27%, are next.


July 6, 2007: The Case for Breaking Up UBS, Wall Street Journal,

…the surprise ouster of Peter Wuffli as CEO. The main event was the blow-up of a hedge fund inside the firm…

… new speculation that UBS and its investment bankers will part ways. The bankers don’t like feeling underappreciated or having to beg for funds from Switzerland so they can help fund leveraged buyouts and remain competitive with the likes of Morgan Stanley. Also, are the synergies between investment banking and wealth management all they’re cracked up to be? How much business, for instance, are investment bankers at the firm steering from their corporate clients to UBS’s wealth management unit?

July 7. 2007, UBS’ Wuffli Slipped on Investment Banking, LiveMint.com, The Wall Street Journal,

[Wuffli’]s lost his job at a moment’s notice, in the tradition of his predecessor Luqman Arnold and former CS bosses such as Lukas Muehlemann and John Mack.

Where Wuffli slipped up was in his handling of UBS’ investment bank……his bet on an internal hedge fund, Dillon Read Capital Management (DRCM). UBS couldn’t make DRCM work despite a fair wind in financial markets and a roster of star bankers. That’s dented UBS’ reputation, even if it didn’t leave a huge hole in the group’s finances.

It has helped put the brakes on UBS’ shares too. After outperforming their European peers for most of Wuffli’s reign, they’ve fallen behind in the last year. What’s more, the group has lost some of its premium over rival Credit Suisse too. UBS’ bigwigs may have found that particularly hard to swallow.


Disclaimers: I don’t have any inside info about UBS; I haven’t talked to any acquaintances there since Wuffli’s ouster.

I do know this. The day after his departure, I checked the UBS website and found no mention of him; a clean airbrush job. And the analysts all cite short-term performance, internal power struggles, loss of profits, momentum, stock price. The usual suspects. Strategic failure? Values violations? Integrity? Not mentioned.

Back to those CFOs in the survey: are they right about integrity being the number one driver of success? I’m from Missouri on that one. When CFOs use that word, it carries overtones of financial statements, where “integrity” has very precise meanings.

More generally, “integrity” is related to words like integral; integrated; integrative; whole. Wikipedia says:

integrity is the basing of one’s actions on an internally consistent framework of principles.

Like what Wuffli was trying to do with values in his integrated, one-firm firm strategy.

From this outsider’s perspective, it sounds like another failure to achieve escape velocity from the more traditional financial services value set—the curse of short-term, clannish, me-me ego and money-driven values. Financial services (some parts more than others) have a hard time living relationship values internally—and if they can’t do that, why should customers believe it when they hear it externally?

Somebody tell me if I’m wrong, but it feels like we just witnessed a Tony Soprano whack where they got the wrong guy—and the response is hey, shoulder shrug, eh, waddya gonna do, huh?

Feels like a good experiment, cut short. Leaves you wondering, what might have been?