There’s a good reason no big financial institution has ever won the Baldrige Award: Their applications would be fatally flawed.

In fact, it’s too bad every financial institution doesn’t have to submit a Baldrige application because their responses to the following Criteria questions (verified with a site visit just to keep them honest) would expose the dangerous and destructive practices that caused the financial crisis:

• What are your key strategic challenges and advantages associated with organizational sustainability?
• How do senior leaders personally promote an organizational environment that fosters, requires, and results in legal and ethical behavior?
• How do senior leaders create a sustainable organization?
• How do senior leaders include a focus on creating and balancing value for customers and other stakeholders in their organizational performance expectations?
• How does your organization review and achieve accountability for management’s actions, fiscal accountability, transparency, and protection of stakeholder and stockholder interests?
• How do you evaluate the performance of your senior leaders and the members of your governance board?
• How do you address any adverse impacts on society of your products and operations?
• How does your organization promote and assure ethical behavior in all your interactions?
• How do you consider societal well-being and benefit as part of your strategy and daily operations?
• How do you ensure that strategic planning addresses long-term sustainability?
• What are your key current findings and trends in key measures or indicators of governance and fiscal accountability?
• What are your results for key measures or indicators of ethical behavior and of stakeholder trust in the senior leaders and governance of your organization?

In an article in today’s StarTribune, Bill George, a board member of Goldman Sachs and former CEO of Medtronic, said, “You can’t regulate character. And we have to choose leaders who focus on long-term sustainability for all the stakeholders, not just themselves and the stockholders.”

That’s a good start but it’s not a long-term solution. We need to fix the system that allowed this crisis to happen. Ideally, a large financial institution will integrate the Baldrige model and become a role model for the industry. In the meantime, we should encourage regulators to start asking the right questions about running a legal, ethical, and sustainable financial institution.

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