JPMorgan Chase follows suit over compliance independence
JPMorgan Chase announced it is altering the reporting structure for its chief compliance officer, moving the responsibility away from the business’s general counsel.
In a development that is already being touted as a major blow in favour of compliance independence, Corporate Counsel magazine reports that the bank’s new compliance chief, Cynthia Armine, will now report to the JPMorgan’s operational co-heads.
The magazine says the US bank is following a similar shift in policy announced recently by UK global banking giant HSBC. That bank took a recent US Justice Department clobbering to the tune of a nearly $2 billion fine for alleged money laundering violations. Immediately after grimacing and writing the cheque, HSBC officials enhanced the power of its chief compliance officer by promoting the post to the top table of directors.
The magazine goes on to wax lyrical on the glory of compliance officers, describing them as the ‘unsung heroes of the corporate landscape’, who struggle ‘mightily to carry out their near-Sisyphean mandate — often with scarce resources and in the face of institutional resistance and sometimes downright threats of retaliation’.
But it also points out that banks have historically dragged their feet in recognising the value of top-flight compliance executives, and more importantly, of keeping them at arm’s length from their legal departments. ‘Until recently,’ says the report, ‘the financial services industry has been slow to adopt this sensible best practice for compliance departments, choosing to hold on to a compliance-reporting-to-legal construct.’
However, points out Corporate Counsel, ‘JPMorgan seems to have gotten the memo’.