HUMANIST
The truth first and foremost
“Pioneer in the data strip tease”. That’s how Dinero1 magazine once defined Banco Popular, given its mania for transparency: “The bank led by Valls Taberner was the first to publish an externally audited balance sheet and is the most accessible in terms of information,” it added. But what was the reason behind the bank’s concern for not hiding anything, for telling all, whether good or bad?
Four Reasons for Transparency
Luis Valls himself gave the answer in an interview 2 he granted during the times when his bank was opening the economy sections in the media as the best and most profitable in the world, in recognition of a job well done:
“There are four reasons for transparency so people can find out what’s going on. Firstly, educational. It benefits the bank’s staff to get used to the fact that everything that happens will be published. The tradition in banking is that no one talks or analyses their mistakes out loud. It would be logical for everyone in the bank to be aware of the abuses that occur and how they are sanctioned, the reasons for dismissals, and so on. Transparency is a good school for human formation. You can’t go through life being naive.
Secondly, for control. Because people wrongly believe that mistakes discredit them, no one wants their failures to be exposed. This attitude costs the bank a lot of money because mistakes continue to be made. The ongoing policy of transparency, supported by the rapid transfer of information provided by computers, helps to improve income and avoid many cases of loss of earnings.
A defensive reason. Rumor is a formidable weapon in the hands of adversaries in banking. Ours is a profession which is very vulnerable to rumor. For that reason, there is no better antidote against rumors than transparency. That’s why we have given an immediate and sufficient explanation every time there is an incident in the bank. We must be faster than the phone in order to prevent exaggerated comments and classic misunderstandings.
And finally, an informative one. Every president is subject to the insulation of those around him, of his immediate circle. Kennedy complained about having to find out through the press about problems that his services and, on occasion, his own government concealed from him. For the shareholder and the board of directors, it’s important to be able to follow the bank’s progress; what goes well and what goes wrong. For both, there must be no surprises. In banking, you have to know how to react in time rather than not wanting to make mistakes. A problem can stop being a problem simply by being detected at its beginning.”
Everything must be publishable
His eagerness to demonstrate that transparency was one of the pillars and principles on which his governance was based. He tirelessly repeated the phrase: “Don’t say, write, or do anything that can’t be published in a newspaper the next day.” He believed in this principle so much that one day he did it; he kept his promise: The director of a small office in Santander had caused a financial hole of six billion pesetas at the time (it was approximately one-sixth of the bank’s profit), and, to demonstrate that transparency, he reserved a column in the newspaper El Mundo, which at the time had a spectacular circulation 3, and narrated the case in detail. (See annex)
Bibliography
(1) “The Banking of the 80s. Presidents Speak”, published in the magazine DINERO in its August 1980 issue. (2) Business Future Magazine, October 1990 issue (3) “Pepe’s Trajectory,” by Luis Valls El Mundo, January 20, 1992.
