What is HR's role in the epidemic of Moral Bankruptcy in the FInancial Services sector?

HSBC busted for laundering Monday for the Mexican Cartel 

ING paid 619M fine for funneling billions for Iranian and Cuban companies through the US 

Wachovia in 2010 goes into DOJ deal for funneling cocaine dollars 

Barclays admits rigging the LIBOR rate for years 

Wells Fargo pays $175 Million dollar fine for targeting minorities for High Risk mortgages 

Capitol One pays $210 Million fine for deceptive product sales

The above headlines come from the Financial Times, Wall Street Journal, The Economic Times, and others and the result is a couple of people resign, and there is more investment in controls - but where is the conversation about what apparently is moral bankruptcy? Pause for a moment, the above are not simple ethics issues - these are groups that decided it was okay not only do business with, but to help increase profits for Drug Dealers, Terrorists or develop processes that target minorities! Even more importantly - where is the conversation about where is Human Resources?

This was groups of people: 
Now if you are thinking these were isolated cases of one or two individuals - they weren't. Do the reading and every one of the cases involved groups of people that made the events happen, help facilitate the issues and were complacent in not doing anything to stop them. Now this is not saying everyone in the banks were complicit - but the articles are pretty clear that there were large groups of people involved in each one (we are talking 30 or more people) in each of the above.

What about Risk Management controls?
First of all, most of the controls in the financial services industry from the Fed, OCC, etc are based around risk management principles - which are more designed to limit overall financial risks. Often the ethics controls are based around audits and separation of duties controls. But lets think about that - separation of duty controls are designed to make sure one individual can't commit fraud. Separation of duties controls are not capable of stopping or identifying when you have group failures of ethics.

So where is HR in all of this? 
In all of the headline cases mentioned, I have not seen any mention of HR being deposed by the regulators, or the senate. Nor have I seen any mention of anyone from HR being fired as a result of these events. So I have to ask - does this show a failure of HR to play any value add role in these organizations? So before people start backpedaling and saying - this isn't HR's job - then lets dig into the details:

1. HR is responsible for the hiring process and responsible for training managers on how to interview candidates.
2. HR is responsible for the background checks
3. HR is responsible for the Employee Engagement and Morale Processes
4. HR is responsible for designing the Incentive Compensation plans which are purely designing compensation plans to drive behavior
5. HR is responsible for leadership training - so what is "right" in an organization
6. HR is responsible for Succession Planning - which is focused on functional and character readiness of individuals to be ready for leadership
7. HR is responsible for the administration and calibration of performance management cycles
8. HR as a function - embeds HR business partners in the functional areas

Do you think during any of the above 8 HR processes that no one in HR had a clue that something was rotten in Danmark? We keep on talking as a profession that HR wants a seat at the table - but if we want a seat at the Strategic Table - then we also need to be prepared to welcome and take accountability for HRs failures.

But what do you think? What is HR's role in proactively identifying, preventing and/or creating a culture where such Moral Bankruptcy can't take hold?


{Personal Note: I do want to make it very clear - I have had the pleasure to work with several financial institutions, and had the pleasure to meet some amazing individuals who I found to be incredible, moral and honest individuals. Which also really shows how egregious the above issues were - as all it would have taken is one person to have stopped it!}