Bank Chief Compliance Officers Gradually Taking Their Posts, Half Concurrently Held by Presidents—Will There Be Role Conflicts?

Financial Times Reporter | Zeng Lingjun

Recently, several banks have successively appointed Chief Compliance Officers.

According to incomplete statistics from Financial Times reporters, as of March 10, about 30 listed banks have officially appointed Chief Compliance Officers. However, in this process of standardizing compliance structures, a notable feature has attracted widespread market attention: more than half of the Chief Compliance Officers are also serving as bank presidents, such as Agricultural Bank of China appointing President Wang Zhiheng as Chief Compliance Officer, and Bank of China appointing President Zhang Hui as Chief Compliance Officer.

Xue Hongyan, a special researcher at Shangshang Bank, told FT reporters that the high-level approach of appointing bank presidents as Chief Compliance Officers reflects multiple considerations. From an internal management perspective, since the president is at the core of operational decision-making, serving as both president and compliance officer can effectively break down departmental barriers, ensuring compliance requirements are deeply integrated into the entire business process, and avoiding disconnection between compliance management and business development. Additionally, this model can optimize governance efficiency, allowing compliance directives to be directly transmitted to front-line operations, reducing transmission losses across levels, and improving the responsiveness of compliance work.

Bank Presidents Serving as Chief Compliance Officers Is Becoming the Mainstream

In December 2024, the China Banking and Insurance Regulatory Commission issued the “Regulations on Compliance Management of Financial Institutions” (hereinafter referred to as the “Regulations”), which clearly states that financial institutions should establish a Chief Compliance Officer at their headquarters, who should be a senior management personnel, and allows bank presidents (general managers) or other senior management to serve concurrently.

The Regulations will take effect from March 1, 2025, with a one-year transition period. As the transition period ends on March 1, 2026, major banks are accelerating their appointment of Chief Compliance Officers.

Currently, among A-share and H-share listed banks, over 30 institutions including Agricultural Bank of China, Bank of China, and China Everbright Bank have announced appointments of Chief Compliance Officers. For example, on March 9, Dongguan Rural Commercial Bank announced that its Vice President Ye Yunfei’s appointment as Chief Compliance Officer has been approved by the Dongguan Financial Regulatory Bureau; on February 27, Bank of Construction, Bank of Communications, Zheshang Bank, Qingdao Rural Commercial Bank, and Lanzhou Bank announced their appointments of Chief Compliance Officers.

Dongjian, Chief Economist at Zhaolian and Deputy Director of the Shanghai Financial and Development Laboratory, told FT that appointing multiple senior management positions with narrow responsibilities can increase internal communication and coordination costs. If the Chief Compliance Officer or Compliance Officer is only a general senior management rather than a Party Committee member, their influence in bank management may be limited, making it difficult to play an effective role. Especially for small and medium-sized financial institutions, establishing too many senior management roles can hinder work progress and increase management costs, so it is not recommended to set up dedicated Chief Compliance Officers or Compliance Officers.

According to FT’s review, the sources of candidates for Chief Compliance Officers mainly fall into three categories:

1. Deputy Presidents, Chief Risk Officers, and other senior management serving concurrently. For example, Bank of Communications appoints Chief Risk Officer Liu Jianjun as Chief Compliance Officer; Everbright Bank appoints Vice President Yang Wenhua; Chongqing Bank appoints Vice President and Chief Risk Officer Wang Wei.

2. Dedicated Chief Compliance Officers. Huaxia Bank is a pioneer in this model, appointing Yang Hong as Chief Compliance Officer. Yang Hong has extensive experience working in Huaxia Bank’s international business department, credit card center, and regional branches. Notably, among all large and medium-sized banks (6 major commercial banks and 12 nationwide joint-stock banks), only Huaxia Bank has established a dedicated Chief Compliance Officer position.

Since 2025, Huaxia Bank has faced the largest regulatory penalties among the 12 joint-stock banks, totaling 122 million yuan; in 2025, it received a single penalty of 87.25 million yuan, the largest fine in the banking industry that year. Jiang Hua from the Legal Inquiry Financial Regulatory Research Institute believes that the high penalties likely exposed some deficiencies in compliance management, prompting Huaxia Bank to establish a dedicated Chief Compliance Officer to strengthen compliance controls, reduce regulatory penalties, and eliminate negative impacts.

3. Bank presidents serving directly as Chief Compliance Officers. This is currently the mainstream model, accounting for over half. Examples include Zhang Yi, President of China Construction Bank; Wang Zhiheng, President of Agricultural Bank of China; Zhang Hui, President of Bank of China; and Liu Min, President of Lanzhou Bank.

Jiang Han, senior researcher at Pangu Think Tank, analyzed to FT that having the bank president serve as Chief Compliance Officer can directly assign compliance responsibilities to the “top leader,” ensuring compliance resources are allocated without departmental barriers and enabling rapid response to regulatory requirements. Moreover, this approach reduces internal coordination costs and improves execution efficiency. Since compliance management involves all business lines, if a deputy or independent senior management holds the role, it often faces difficulties in cross-departmental promotion and lacks sufficient authority. As the core of operations, the bank president can effectively break the deadlock between business and risk control, ensuring compliance directives reach the grassroots level.

Will There Be Role Conflicts?

A deeper question arises: when business development targets conflict intensely with compliance requirements, can a bank president who also serves as Chief Compliance Officer maintain independent compliance judgment?

A compliance officer from a joint-stock bank told FT, “We specifically compared the three models during our planning. The dedicated model has the strongest independence but requires rebuilding cross-departmental coordination mechanisms, with a trial period of at least six months; deputy presidents can leverage existing structures but may lack authority; having the bank president serve as both decision-maker and compliance officer offers the highest decision-making efficiency, but we are also concerned about potential role conflicts.”

Jiang Han analyzed that this situation inherently involves conflicts of interest and risks of role ambiguity. The bank president bears the responsibility of meeting shareholder-imposed revenue and profit targets. When business expansion clashes with compliance red lines, the person holding both roles may easily fall into the dilemma of “being both player and referee.” Under performance pressure, decision-making may instinctively tilt toward business interests, leading to superficial compliance review or even selective neglect of risks to pursue growth.

Furthermore, this could undermine internal checks and balances, creating systemic risks. The core function of a Chief Compliance Officer is independent supervision and checks. If the role is held by the bank president, it weakens the board’s oversight of management’s compliance. If the president makes a mistake or faces ethical risks, without an independent compliance officer to “brake” or issue early warnings, violations could be tolerated or institutionalized across the bank, potentially resulting in huge fines or reputational damage.

Third, it is not conducive to the independent performance of professional compliance teams and the cultivation of compliance culture. When facing a bank president who also serves as Chief Compliance Officer, subordinate compliance departments may find it difficult to maintain objective judgment, risking becoming mere executors rather than supervisors. Over time, this could hinder the formation of a true “no violation, no violation” compliance ecosystem, and may even foster a culture of concealment, impeding long-term stable operation.

Xue Hongyan told FT that when business development goals conflict with compliance requirements, a bank president serving as compliance officer has inherent biases. The president’s main responsibility is to promote business growth and profitability, while the compliance officer’s core duty is to independently oversee and prevent compliance risks. These objectives are naturally at odds.

Under performance pressure, there is a risk that compliance requirements may be sacrificed for short-term business interests, weakening the original purpose of compliance management and leading to overlooked or concealed compliance risks.

“In traditional compliance management systems, compliance departments are often viewed as cost centers with limited influence within the organization, making it difficult to effectively check violations by business units. While the president serving as compliance officer can enhance authority, overlapping responsibilities may weaken compliance supervision. The ultimate effectiveness of this model depends on whether clear delineation of responsibilities and reporting channels can be established to ensure compliance functions remain independent and effective in practice, preventing compliance management from becoming subordinate to business development,” Xue Hongyan further analyzed for FT.