Commercial Federal Bank

An Interview with Bill Fitzgerald, Former Chairman and CEO of Commercial Federal Bank
By Jamie Jones and Brandon Struebing, Creighton University MBA students

In this current climate where banks are not easily trusted, it is hard to imagine any benefit coming from the banking industry. During former years when some in the industry were making risky bets leading to recent financial failures, a good and ethical hometown bank, known as Commercial Federal, was growing rapidly and doing ethical business, with then CEO William A. Fitzgerald at the helm. As a result, the Mr. Fitzgerald was inducted into the Omaha Hall of Fame for outstanding exhibition of ethics in business.

Some Notes about Mr. Fitzgerald

William A. Fitzgerald was born and raised in Omaha, NE where he attended Creighton Prep and Creighton University. It seemed to be a natural progression to go into banking, considering both his father and grandfather were heavily involved in the industry. At the age of 14, Mr. Fitzgerald started unrolling abstracts and filing them during the summer. He then became a teller where he learned a lot about the industry and the importance of customer relationships. Following college, Mr. Fitzgerald joined the Army, but before he left, his father approached him about joining the family business. At that time Commercial Federal had only two branches with about 20 employees. His father thought together they could grow Commercial Federal into the significant business it would become.

The Meaning of Ethics in Business

For Mr. Fitzgerald, ethics is treating others the way you want to be treated, reflecting the Golden Rule. As it relates to business, this comes from an explicit respect for the customer where a deal is only a good deal when it benefits both parties. Also, honesty to both the employees and to the customers creates an ethical plan for good business to occur. This natural sense of direction comes from one’s upbringing in faith and family. Mr. Fitzgerald applied this principle when he interviewed employees to join his team. He always looked for a favorable background that would allow for the person to interact well and justly with the customer.

The Role of Corporate Social Responsibility

Mr. Fitzgerald is an active volunteer who serves on many non-profit boards, involved Commercial Federal in community efforts, and encouraged employees to be generous with their own resources which was allowed to be done on company time. He believes corporate social responsibility is essential to a community because this is at the heart of what sustains such an entity. The support is just the right thing to do: it benefits others and the community as a whole. As an added bonus, it encourages others in the community to do ethical business with a company who participates in corporate social responsibility. This in turn continues to encourage ethical behavior and again can lead to further benefiting the community.

On the Uniqueness of Omaha in Terms of Moral Responsibility in Business

Mr. Fitzgerald agrees that “there is something in Omaha’s water” as it relates to more people consistently making ethical decisions. According to the former CEO, the Midwest holds a plethora of good people, perhaps dating back to the many hardworking immigrants who dedicated themselves to having a positive impact on their surroundings as a whole, while not being as concerned about what was necessarily in it for them personally. Mr. Fitzgerald also gives a lot of credit to the Knights of Aksarben, who bring together many prominent business people in order to help the Omaha community. Mr. Fitzgerald has served as both a counselor and a governor for the Knights of Aksarben and has seen the good that can be done when people of the same mindset go after projects that contribute to the building of a better culture and community.

An Easy to Handle Ethical Situation

Mr. Fitzgerald received an e-mail from a branch manager requesting to meet with him. At their meeting, she informed him that she was being harassed by the regional

manager, who had superior credentials and had been with Commercial Federal for five years. The married regional manager consistently asked the woman to dinner, which made for an uncomfortable situation. Mr. Fitzgerald immediately took action and was informed that two other female branch managers had encountered the same harassment from the regional manger. The regional manager was immediately dismissed from the company. Handling this ethical situation in this matter of fact manner said two things: one, behavior like this would not be tolerated, and two, the President of the company had the integrity to meet with a branch manager at her request and be open-minded to her situation.

A Difficult to Handle Ethical Situation

With the Farming Crisis in the 1980’s, Commercial Federal saw its fair share of tough times. The Federal government came to Mr. Fitzgerald’s bank at a time when the industry was really struggling and asked him to acquire other failing institutions. If Commercial Federal would acquire these institutions the government would allow the bank to write off its buying of the troubled banks as goodwill. When the Savings and Loan Crisis was in full effect, the Feds, with an act of poor integrity, went back on their word and did not recognize the goodwill they had previously agreed to. Because of the sudden shift of the balance sheet, Mr. Fitzgerald and his company found themselves in a very dangerous situation. Despite this, Mr. Fitzgerald was able to convince the government to allow his bank to continue to function, largely based upon its prior success and with the conviction that they would succeed in the future. Still, in order for the weakened bank to survive, Mr. Fitzgerald was forced to downsize his work force by nearly one-third of its size. This survival tactic was difficult but necessary for the bank to stay afloat. Mr. Fitzgerald looks at the situation as best as possible, noting that at least he was able to keep two-thirds of the people working rather than letting the whole business fail. Afterward the company enjoyed steady growth and rebounded effectively.

The Ease of Discussing Ethical Situations

Mr. Fitzgerald was happy to share the two previous ethical situations. He feels as though it is good to constantly discuss ethical dilemmas and share them with others. This will help future business leaders since they will encounter similar situations in their careers. By bringing these issues to light, leaders will know how to effectively and justly resolve them.

The Importance of an Ethics Mentor

While Mr. Fitzgerald believes in the importance of an ethical mentor, he did not have a particular mentor who he looked to for guidance on ethical concerns. However, he and his father had open lines of communication and often discussed many topics. As a mentor in business, Mr. Fitzgerald focused on his employees. He often would take a few mid-level officers to lunch so they could discuss the status of the business and any other topics or issues important to the employees. Given these mid-level officers did not directly report to him, he was able to find out who was making good decisions or who was not making decisions at all. Furthermore, this helped Mr. Fitzgerald build a rapport with his employees and allowed him to make friends along the way.

Final Comments

A humble yet obviously accomplished man, Mr. Fitzgerald interviewed with an honesty focused on relating his own experiences and conclusions to the young and perhaps naive business aspirants who sat before him. He was still striving to give back, this time to future business leaders. We were struck by his poise when he related his life experiences about business and were pleased when he joined in our own enthusiasm concerning what was on the horizon for business leaders. It was clear to us why Mr. Fitzgerald was chosen for honors such as the Omaha Business Hall of Fame, and we were fortunate to be able to speak with him about such an important issue as business ethics.