Listed banks intensively appoint Chief Compliance Officers, potentially ushering in a profound transformation in banking compliance governance

Shishi Yu, China Securities Journal

As of March 2, nearly 30 listed banks have announced appointments of Chief Compliance Officers. Among them, Agricultural Bank of China, China Construction Bank, Bank of China, Lanzhou Bank, Qingnong Commercial Bank, and others have announced that their Chief Compliance Officers are also their Presidents.

Industry experts believe that establishing a Chief Compliance Officer is not only an important measure for banks to respond to regulatory policies but also promotes a deep restructuring of the banking compliance management system, helping banks shift from “passive regulatory compliance” to “proactive compliance governance.”

Compliance Starts at the Senior Management Level

Recently, listed banks have been rapidly announcing appointments of Chief Compliance Officers.

On February 27, five listed banks announced their Chief Compliance Officer candidates. Except for Bank of Communications, which appointed Liu Jianjun, the Chief Risk Officer, as Chief Compliance Officer, the other banks—Construction Bank, Zheshang Bank, Lanzhou Bank, and Qingnong Commercial Bank—have their Presidents also serving as Chief Compliance Officers. Among them, Lü Linhua of Zheshang Bank will assume the role once his appointment as President is approved. On February 13, Agricultural Bank of China announced that its President, Wang Zhiheng, would also serve as Chief Compliance Officer; on the same day, Bank of China issued a board resolution appointing President Zhang Hui as Chief Compliance Officer. On February 12, Everbright Bank announced that the board approved Yang Wenhua to serve as Vice President and Chief Compliance Officer.

Looking at the current positions of the appointed Chief Compliance Officers across these banks, most are also Presidents, with some banks appointing Vice Presidents, Chief Risk Officers, or Assistant Presidents as Chief Compliance Officers. A few banks have adopted a dedicated Chief Compliance Officer model.

A relevant official from the China Banking and Insurance Regulatory Commission previously stated in a Q&A that financial institutions need to improve their ability to operate lawfully and compliantly, integrating compliance management organically into corporate governance, operational structures, and business processes. This requires compliance to start from the top, promoting the effective operation of the compliance management system from a high level.

Compliance Management Must Be Serious and Independent

Industry analysts note that the recent wave of appointments of Chief Compliance Officers by banks mainly responds to the requirements of the “Regulations on Compliance Management of Financial Institutions,” issued by the China Financial Regulatory Administration in December 2024. The regulations will take effect on March 1, 2025, with a one-year transition period.

“The regulations clearly state that financial institutions should establish a Chief Compliance Officer at their headquarters, who can be a dedicated compliance officer or a senior management member, depending on their operational circumstances,” said a relevant person from a state-owned bank’s board office. Having senior management serve as Chief Compliance Officers helps ensure compliance responsibilities are taken seriously from the top, fostering a compliance culture, raising awareness among all employees, and creating an environment where violations are not dared, not allowed, and not desired, effectively supporting high-quality development.

The regulations also specify that the Chief Compliance Officer and compliance personnel should not be responsible for front-office operations, finance, capital utilization, internal audit, or other departments where there could be conflicts of interest with compliance duties. Exceptions are made for bank Presidents (General Managers) serving as Chief Compliance Officers or Presidents of provincial or primary branch offices serving as compliance officers.

An official from the China Financial Regulatory Administration emphasized that the core of compliance is to follow laws, regulations, and supervisory standards, avoiding crossing “bottom lines” or “red lines.” This requires compliance management to be serious and independent.

Moving Toward Proactive Compliance Governance

Experts generally agree that the establishment of a Chief Compliance Officer by banks marks a new stage in compliance governance within the banking industry. Under the guidance of the regulations, financial institutions should build a comprehensive, cross-functional, and vertical compliance management system, embedding compliance into all aspects of development decisions, business operations, and across all fields, transitioning from “passive regulatory compliance” to “proactive compliance governance.”

“The unique nature of financial institutions demands higher compliance standards than ordinary companies,” said Dong Ximiao, Chief Economist at Zhaolian and Deputy Director of the Shanghai Financial and Development Laboratory. He believes that financial institutions must adhere to compliant operations, cultivate a compliance culture, guide employees to enhance risk and compliance awareness, continuously improve compliance levels, and effectively prevent operational risks.

According to the specific requirements outlined in the regulations, the Chief Compliance Officer of a bank should bear primary leadership responsibility for compliance management within the institution and its staff. Their main duties include: overseeing the institution’s compliance management work, organizing and promoting the construction of the compliance management system, supervising the performance of compliance departments and roles, ensuring strict and effective implementation of compliance standards, promoting the development of compliance policies, conducting compliance reviews, inspections, evaluations, handling major compliance incidents, conducting compliance assessments, problem rectification, and team building, and ensuring the orderly operation of compliance work; and regularly reporting to regulatory authorities as required.