Still trying to polish its tarnished reputation, Wells Fargo announced Friday the appointment of two new corporate risk leaders and an enhanced organizational structure “designed to provide greater oversight of all risk-taking activities and a more comprehensive view of risk across the company.”
The new risk model will have five line-of-business chief risk officers (CROs) along with other teams aligned by risk type, each reporting to Wells Fargo CRO Mandy Norton. “This enhanced organizational structure will strengthen our risk management program, provide greater consistency in how we manage risk across our businesses, and better position us for the future,” Norton said.
“We have made—and continue to make—transformative changes to our risk management structure and practices, including important work to provide greater oversight of all risk-taking activities and a more comprehensive view of risk across the company,” Norton added. “These organizational changes further those efforts and increase our ability to effectively execute our top priorities, including our critical risk, regulatory, and control work.”
In February, Wells Fargo announced it had started to revamp its leadership structure into one that is more accountable and transparent—something former board members of Wells Fargo have struggled with in the past. The new structure removes risk management assessments from individual business line leaders and, instead, places them into the hands of independent risk managers.
In March, Wells Fargo CEO Charlie Scharf was candid during congressional testimony about the bank’s past failures to stem abuses in its banking, lending, and auto insurance divisions. The Department of Justice and Securities and Exchange Commission levied $3 billion in fines against Wells Fargo & Co. and a subsidiary in February to resolve its fake account scandal, in addition to a $575 million resolution the bank agreed in a 50-state settlement in 2018.
During his testimony, Scharf said the changes the bank announced in February will help eliminate a serious management flaw that existed at Wells Fargo prior to him coming on board and further brings the bank’s organizational structure more in line with similarly sized banks. The bank also has hired eight senior managers from outside the company since Scharf was hired in September 2019, with several more planned in the coming months, he said.
As part of these changes, Kevin Reen, who most recently served as JPMorgan’s CRO for its card services business, will join Wells Fargo in August as CRO of consumer lending. Wells Fargo said it will conduct a search for the new CROs for its commercial banking, consumer & small business banking, corporate & investment banking, and wealth & investment management businesses.
In addition, Bill Juliano, who most recently served as consumer and business banking CRO and U.S. chief operational risk officer at Santander Bank, will join Wells Fargo in July to lead the operational risk management team.
“Other teams organized by risk type and governance will continue to report to Norton,” Wells Fargo said. “In addition, due to the criticality of the function, Enterprise Testing will be elevated to a direct report to Norton after a search for a new leader is complete.”