JP Morgan’s Tone-Deaf Attitude

more+
less-

jpmorganSome people are gluttons for punishment.  We all know people in our professional and personal lives who repeatedly end up in trouble.   Even when they escape some serious consequence or problem, they inevitably bring about more trouble.

I have written about JP Morgan and its continuing compliance nightmare; its resounding compliance failures; and its unwillingness to acknowledge its own responsibility for much of its own problems.

All of this was recently capped off by the Board’s decision to award its Chairman and CEO with a raise.  For prosecutors, policymakers and regulators responsible for oversight of the industries in which JP Morgan operates, I am sure there was a collective scratching of their heads.  How could a company that had such a “bad” year in Washington, D.C. turn around and reward its Chairman and CEO?

I know the question is rhetorical but when we write about corporate culture and setting a tone at the top – please tell me what the message is to JP Morgan’s management?

You can caught up in numerous controversies, pay large fines and penalties, and turn around and reward yourself for a job well done.  I may be missing something here but the headline reports of Jamie Dimon’s raise were bordering on the absurd.

JP Morgan has a highly-respected General Counsel, who was a former Enforcement Chief for the SEC.  He was well known for touting the importance of compliance.  Yet, under his watch, JP Morgan’s compliance record was so poor that his credibility had to be questioned.jpmorgan2

If a company suffers from a government enforcement action, the leadership of the company is responsible for remediating the event, assessing the causes of the problem, and then improving its internal controls and compliance program to make sure the event never happens again.

Most companies in this situation use the events to turn a positive corner – to make a commitment to reform, improving performance and then sending a message internally and externally of a new and improved corporate culture.

The ironic part of JP Morgan’s story is that underneath the bluster of Jamie Dimon and its General Counsel, JP Morgan is instituting some real improvements – it has dedicated substantial resources to improving its compliance program, and it separated its compliance leadership from the General Counsel’s office, and had the CCO report to the head of corporate operations.

These are all welcome improvements.  You have to wonder though what was the board thinking when it approved Jamie Diimon’s raise?  What kind of message did the Board jpmorgan3want to send to the company?

The real question boils down to a corporate board, including its Chairperson Mr. Dimon, which did not appreciate the significance of its action.  Sometime humility can be a very powerful strategy.  JP Morgan has not displayed much humility nor remorse.  It continues in its tone-deaf way to assure continued government attention and renewed focus on criminal and civil enforcement actions.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

more+
less-

The Volkov Law Group on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×