One of the most important issues any board of directors faces is the oversight of risk management for the organization he or she serves. While the financial fallout from a fraud or corruption investigation or enforcement actions such as under the FCPA can be quite high, it can pale next to the reputational damage to a company. The Wells Fargo fraudulent account scandal still resonates as one of the most prime examples where the continued fallout from a board’s failure in the area of oversight of risk management is working to damage the organization.

Now the Wells Fargo board is facing an outright rebellion of institutional shareholders for additional changes in the aftermath of the scandal. Reports note that one group has gone so far as to request the breakup of the bank for being simply too large to manage effectively. Other institutional investors have complained bitterly on the lack of response by the board, from the time period before the scandal was made public up to the present. The board did not have any compliance expertise on its board, instead it had a blue chip list of former Cabinet secretaries, former CEOs, and retired military officers.

All of this activity points toward one clear fact. Investors want engaged directors who are actively involved with an appropriate level of board oversight. When you couple this with the recent Justice Department document Evaluation of Corporate Compliance Programs requirement for compliance expertise at the board, the clear message is that both investors and the government want board’s more involved with an appropriate level of oversight and expertise to deal with a variety of compliance issues including FCPA, cyber-security, InfoSec, and other related issues. Equally important to many institutional investors was the crisis management response—or lack thereof—by the Wells Fargo Board.

Earlier this week, the company announced replacement of it general counsel. As the fallout of senior managers from the company continues, The Man From FCPA wonders if the board will soon face scrutiny.