C Citigroup Inc

By Christina Rexrode 

Can a big bank have a conscience? Citigroup hired one.

David Miller is an on-call ethicist the bank consults on weighty questions of right and wrong, supplementing its armies of lawyers and compliance officers. A Princeton University professor by day, Dr. Miller has worked with Citigroup intermittently for the last three years to tackle abstract issues about banking and morality.

Those are squishy topics for Wall Street, where aggression is a virtue and making money a necessity. Dr. Miller, who spent years in banking before going to seminary, acknowledges the dichotomy -- and the ribbing from friends and colleagues who thought he had sold his soul when he agreed to work with Citigroup.

"You need banking, just like you need pharmaceuticals," says the 60-year-old New Jersey native. "And pharma can save lives, or it can kill and cause addictions."

If the topic is philosophical, the stakes aren't. As Citigroup's president James Forese pointed out in a 2015 industry conference, the bank made $1 million in revenue from dubious foreign-exchange trading -- and paid roughly $2.5 billion in penalties.

Dr. Miller's role at Citigroup is strategic. He doesn't walk the trading floor, hold office hours at call centers or even have an office. Instead he reviews projects, ideas and locations where top executives have concerns.

The bank describes his role as providing "advice and input to senior management." His conversations with top executives like Chief Executive Michael Corbat filter through the organization.

At a meeting with managing directors, for example, Mr. Corbat raised an idea that came from Dr. Miller. In an uncertain situation, Mr. Corbat said, ask the four M's: What would your mother, your mentor, the media and -- if you're inclined -- your maker think?

Dr. Miller also tries to get the bank to look beyond programs such as whistleblower hotlines and compliance training to human impulses. The problem, he adds, isn't the bad apples. Rather, it is how easy it is for good employees to justify bad decisions when they face gray-zone questions.

Citigroup, with a reputation for ethical problems before and after the financial crisis, brought on Dr. Miller at the behest of Mr. Corbat. The CEO was surprised when employee surveys found some workers weren't comfortable escalating concerns about possible wrongdoing.

Mr. Corbat was also motivated by the banking industry's image problem. "If you look today at what the poll numbers say, what the general population says, there is distrust of banks," Mr. Corbat said in an interview.

Despite that, Dr. Miller believes banks can change. "To make the assumption that an organization cannot be more ethical than it was is to give up before you start," said the professor, who declined to say how much the bank pays him. "It is not naive. It is a realistic and necessary goal."

At Princeton, where Dr. Miller runs the university's Faith & Work Initiative, he works from a cramped room piled with books by John Bogle and John Calvin, Martin Luther and Martin Luther King Jr. Posters advertise Q&As he conducted on the intersection of faith and work with Mr. Bogle, the founder of Vanguard Group, and former pay czar Ken Feinberg.

That wasn't always his career trajectory. As an undergraduate at Bucknell University, he studied business and helped run fraternity parties and a rock-concert committee. His career featured stints at IBM, State Street and what was then Midland Securities in London.

Dr. Miller's poise impressed colleagues at Midland, which in the early 1990s was struggling. "You walk into a room where you would think, 'Oh God, I can't deal with this guy, he's immaculate, he's tall, he looks like a movie star and had this 200-watt smile," said Richard Greensted, who worked with him at Midland. "But he was very, very good at putting people at ease."

Dr. Miller eventually fired Mr. Greensted, who wasn't a good fit for the bank, according to Mr. Greensted and confirmed by Dr. Miller. The two remain friends and are still in touch.

While in London, Dr. Miller's wife, Karen, left her job as an attorney at Skadden, Arps, Slate, Meagher & Flom LLP to teach law and ethics at Notre Dame law school's London campus. Soon Dr. Miller felt a similar tugging.

When he penned a letter to announce he was going to study theology at Princeton, he was embarrassed to use the word "calling."

"I never thought of Dave as a scholar," said Patty Hurley, a longtime friend. "He was a sales guy, he was a people person. And then he was learning Greek and Hebrew and he loved it."

Dr. Miller assumed he would return to finance, but ended up pursuing a doctorate in ethics. After the Sept. 11 attacks, he spent nine months working overnight shifts at ground zero as a volunteer chaplain.

During his doctoral studies, Dr. Miller also began advising senior executives. While he has worked with different companies, Citigroup posed unusual challenges including operations in nearly 100 countries where local customs produce varying standards of right and wrong.

Last month, Citigroup confirmed that it, along with other banks, is being investigated over whether it improperly hired the adult children of foreign officials in Asia -- where it can be a common practice, but can violate U.S. laws.

The bank has embraced Dr. Miller's idea of three lenses to apply in ethical decision-making, an approach influenced by Plato and Aristotle: Is it right, good and fitting? Citigroup executives composed their own three questions: Is it in our clients' interest, does it create economic value, and is it systemically responsible?

Citigroup is sharing the idea with employees and plans to work it into training manuals. It is also posting the questions at its offices around the world, including in big letters in the lobby of its Manhattan headquarters.

Write to Christina Rexrode at christina.rexrode@wsj.com

(END) Dow Jones Newswires

March 17, 2017 05:44 ET (09:44 GMT)

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