UPDATE: Jan. 19, 2022: Wells Fargo named Derek Flowers as its chief risk officer, effective immediately, the bank announced Tuesday.
Flowers, a 24-year veteran of the bank, assumes the role from Amanda Norton, who announced this month she would retire in June. She is expected to continue at Wells Fargo until then to help with the transition.
“Building a risk and control foundation appropriate for Wells Fargo's size and complexity remains our top priority, and Derek’s background and familiarity with the company … make him the ideal candidate,” CEO Charlie Scharf said in a press release.
Flowers most recently served as the bank’s head of strategic execution and operations and, before that, was its chief market risk officer and chief credit officer. In those roles, he oversaw credit, counterparty and market risk throughout the bank.
At last count, Wells Fargo was operating under 10 enforcement actions — many of which stem from its 2016 fake-accounts scandal, including a Federal Reserve-imposed $1.95 trillion asset cap.
- Wells Fargo’s chief risk officer (CRO), Amanda Norton, is slated to retire at the end of June, the bank said Tuesday in a memo seen by Bloomberg, The Wall Street Journal and Reuters.
- “Under her leadership, we have made tremendous progress, and our risk organization is completely different from what existed when she arrived,” CEO Charlie Scharf wrote in the memo. “Mandy has strengthened all areas of risk management — financial and non-financial — and enabled heightened oversight of our lines of business.”
- A replacement will be named in the coming weeks, the bank said.
Norton joined Wells Fargo from JPMorgan Chase in June 2018, two months after the San Francisco-based lender entered into a $1 billion settlement related to its 2016 fake-accounts scandal. To that point, Wells often promoted from within rather than hiring an outsider directly to its management committee. (Scharf has taken the opposite tack and only recently named his first Wells insider to the panel: new commercial banking CEO, Kyle Hranicky.)
Norton replaced Mike Loughlin in the CRO role. Loughlin, who had served as Wells' CRO since 2008, later agreed to pay the Office of the Comptroller of the Currency (OCC) a $1.25 million penalty for his role in the 2016 scandal.
Under Norton, the bank expanded its roster of chief risk officers, naming four unit-level CROs in 2020 — a move that raised eyebrows at the time because Scharf, a month earlier, castigated the bank for its numerous management layers.
Norton defended the move, saying, "Our new model will strengthen our centralized, independent risk management program, provide greater consistency in how we manage risk across our businesses, and better position us for the future."
Scharf's tone was markedly softer Tuesday.
“Strengthening our risk and control infrastructure is our top priority, and Mandy has been central to that effort,” he wrote in this week's memo. “She and her team have worked tirelessly and with a great sense of urgency to transform risk management at our company.”
Wells Fargo had 12 enforcement actions against it at the outset of Scharf's tenure in 2019. The bank has winnowed that number to 10.
In a separate memo to risk management employees, Norton said she was retiring to spend more time with family and on personal pursuits, including health matters.
“Living through a pandemic teaches you things, and I’ve realized that now is the time to do some things I want and need to do outside of my career,” she wrote Tuesday, according to Bloomberg. "I am confident in the deeply talented team we have to continue building on the foundation we’ve put in place."