You never see the words “poor” and “JP Morgan” in the same sentence.  It is a historical oxymoron – the words do not fit together.  However, if you have been following the headlines lately – you have to think to yourself, “poor JP Morgan.”  How can a company get hit so hard, so many times, and expect to survive?

The timing could not be any worse – after a bruising shareholder and management battle over Jamie Dimon’s continued role as CEO and Chairman of the Board.  One-by-one, drip-by-drip, JP Morgan has been suffering enforcement action after enforcement action – most recently, JP Morgan settled the “Whale” blowout case for hundreds of millions of dollars with the SEC because its risk monitoring and controls were apparently ignored or faltered and resulted in a trading loss in the billions.  Even more surprising was the fact that JP Morgan failed to follow one of the most basic governance requirements — informing the board of the catastrophic breakdown in risk management.

Then JP Morgan was added to the list of companies engaging in hiring of relatives of foreign government officials, apparently in connection with attempts to secure lucrative business contracts from the same government officials.  For a few days, JP Morgan took over the headlines on this issue and pushed Glaxo Smith Kline off the front pages as this scandal unraveled in China and other Asian countries.

In a recent announcement, JP Morgan touted the fact that it was increasing its spending on compliance and internal risk controls in the billions over the next few years.   Its announcement was not very effective in taking JP Morgan off the front page.

Even in the announcement of its SEC settlement over the Whale fiasco, the CFTC leaked that it was continuing to investigate the SEC over market manipulation in the energy sector.  JP Morgan simply cannot buy a good break these days.

JP Morgan is relying on its sudden change of strategy — throwing $4 billion and 5000 new employees to compliance and risk management functions.  What JP Morgan will soon learn is that the success or failure of compliance and ethics has just as much to do with how it is structured and how it is communicated as a priority throughout an organization.  For years, the CCO in JP Morgan reported to the General Counsel, Stephen Cutler, who is an admired and qualified general counsel, but who is not well equipped as an innovator when it comes to the compliance function.  The proof will be in the pudding — the CCO has now been liberated from the legal function and should not have the resources needed to do the job.  Only time will tell if this is window dressing or the sign of a new commitment.

I have recounted all this to make a point (in case you were wondering) – what happened in JP Morgan to lead to all of these calamities, reported in a steady drumbeat of disclosures: misstep after misstep.

It is naive to conclude that Jamie Dimon’s dual role as Chairman of the Board and CEO explains all of this.  However, it is naive to think that Dimon’s dual role did not have some impact on the corporate culture of compliance in JP Morgan.

JP Morgan’s corporate culture of compliance suffered a systemic breakdown.  There is no question about that.  In the beginning of this year, JP Morgan announced a major shift in its compliance structure by taking the chief compliance officer and the compliance function and separating it into a separate unit with direct reporting responsibility to the Chief Operating Officer.  This was a big step which could have a profound impact on JP Morgan’s culture.

The recent disclosures by JP Morgan are remnants of its past misconduct and should not be blamed on the current compliance operation.  That would be unfair.  Whatever happens in the next few months once the dust settles on the recent disclosures, the new compliance regime can – and should be – held accountable.  For now, JP Morgan is suffering for its past sins and praying that it will not commit any new sins.