SVB’s failure was the largest since the global financial crisis of 2008. But some employees, who spoke anonymously to The Financial Times, said it wasn’t poor risk management but work-from-home culture and an overfocus on social issues that killed the bank.
It’s an argument that Dan Schawbel, a managing partner at Workplace Intelligence, doesn’t buy.
“I think that remote work is being used as a scapegoat and an excuse, which distracts people from the underlying root causes like ineffective or bad management and leadership, lack of diversity in terms of their portfolio, just to overall portfolio allocation,” Schawbel told NewsNation.
Former SVB bankers claim leadership of the California-based bank was spread across the country. They said the company’s president, chief risk officer, and lender’s chief executive all worked remotely — along with the majority of its 8,5000 employees.
In SVB’s 2022 annual report, the bank included remote work as a risk to its business, citing IT issues and productivity reasons.
Schawbel doubts that estimate as well.
“There’s not one study that proves that remote work makes workers less effective or productive,” he said. “In fact, every study shows quite the opposite.”
The banking industry has led the push to bring employees back into the office in the post-pandemic era. Goldman Sachs, Morgan Stanley and Bank of America have taken hardline approaches against remote work policies, while SVB’s approach was in stark contrast to those that have championed returning to the office throughout the pandemic.
Most industry leaders are blaming the immediate cause of SVB’s collapse on its failure to take into account the risk of a high-interest rate environment paired with a bank run.