The "retirement" last week of Wells Fargo's chairman and CEO, John Stumpf, was not the end of this story. Rather, it's just the first chapter of a book on crisis management.

As former president at First Bank System (now U.S. Bank) with responsibility for community banking and financial services, I am very familiar with cross-selling programs, and Wells Fargo's program is no different than those of other banks. But the company carried the effort to a fraudulent extreme by opening more than 2 million phony bank and credit card accounts during the past five years without its customers' knowledge or consent.

How could this happen? Many are focusing on their high-pressure sales program, but that's the symptom of a much deeper issue. The real problem is an insular corporate culture fostered by executives with decades of tenure and by a board of directors that implicitly, or explicitly, appeared to condone wholesale fraud by bank employees and their supervisors. As the old Chinese proverb says, "A fish rots from the head down."

Proof is in the most recent action by Wells Fargo's board of directors. Rather than naming an outsider as a CEO replacement who could help install a new culture, the board named Tim Sloan, Wells Fargo's president and chief operating officer, as CEO.

First, it's perplexing that they rushed to name a replacement instead of waiting until their internal investigation is completed. It's not uncommon during a crisis to name an interim or acting CEO while an investigation is in process.

Second, Sloan has been at Wells Fargo for 29 years and may be deeply inculcated in the same culture that Stumpf accommodated. And Carrie Tolstedt, who reported to him, ran the division responsible for the phony accounts until she was quietly escorted out the door with a $125 million severance package. Sloan served on the company's operating committee, where as an insider he should have had full knowledge of the illicit activities. When he was named as president in November 2015, it was assumed that he was the heir apparent to eventually succeed Stumpf. Why would he ever raise issues with the board regarding fraudulent activities when he and Stumpf were being showered with praise and handsomely rewarded by the board with millions of dollars for their performance? Wouldn't it be in their personal best interest just to stay the course?

More evidence of Wells Fargo's corporate culture was illuminated during Stumpf's testimony before Congress in September while still chairman and CEO. He was "playing dumb" by not answering the lawmakers' questions and rejected their notions that the scandal was a result of failure in leadership and corporate culture. Yet he revealed that he first became aware of the problem in 2013, and that employees were still being fired for creating phony accounts. He also admitted that no senior management leaders had been fired over the scandal. Stumpf's lack of action and accountability enraged the lawmakers, to the point where Sen. Elizabeth Warren, D-Mass., said Stumpf had practiced "gutless leadership." It's the CEO's and board of directors' fiduciary duty to be fully informed about what is happening in their organization. They can't claim ignorance — unless, of course, they are ignorant!

Even if not aware of the issue until 2013, governance best practices and federal law would require Wells Fargo to disclose to its auditors any potential "material event" that could have a negative impact on the company, and it should have been included in their regulatory filings. Failure to address the problem when it was first reported three years ago will likely end up costing the organization millions, possibly billions, of dollars and could result in employee layoffs as the company shrinks. For example, the states of California, Ohio and Illinois have broken banking ties with Wells Fargo, citing social irresponsibility. The material reputational damage felt by customers, employees and other major constituents will last for years.

Finally, the most telling symptom of Wells' unhealthy corporate culture is the dysfunctional sales quota program and the irreconcilable disparity between the income levels of the 5,300 employees who were fired and the folks at the top. It's often said in business that compensation is the best method of communication. So when employees are given sales quotas for which they will either get a bonus, or if they don't, get fired, it doesn't take an IQ of 140 to figure out what they may do to survive — especially when many of these employees are making about $25,000 to $35,000 a year.

On the other hand, Stumpf made $19.3 million and Sloan made $11 million last year, and Stumpf's retirement package is $134 million, which is more than the total salaries of the 5,300 terminated employees. I support paying executives fairly and competitively, but this is outrageous.

Wells Fargo used to be a friendly competitor of mine, and it pains me to see this. A vast majority of its employees are good, ethical, hard-working and oriented to serving customers, so I hope they will pull through this soon.

My advice to the board is simple: hold a special committee meeting (excluding the CEO), close the boardroom doors, and focus on crisis management and your corporate governance guidelines. Next, take bold actions to mitigate the damage to the company's reputation. And that should begin with an apology to the real victims of this scandal — the cheated customers and the terminated employees. And until this matter is resolved, stop taking your own $350,000 annual director's compensation. Regardless of the small effect this would have on the bank's bottom line, the symbol of accepting responsibility will be huge.

What leaders do speaks louder than what they say. The time is right now to show accountability. Make apologies and take action on long-term correction of Wells' corporate culture before the last chapter in this story is written.

Mark W. Sheffert is the chairman and CEO of Manchester Companies Inc., a Twin Cities-based board and management advisory firm.