Jack Harrington Quoted in Bank Director on a Board's Role in Overseeing Fraud Risk

Bradley attorney Jack Harrington was quoted in Bank Director sharing his perspective on a board’s role in overseeing fraud risk at banks.

Harrington said setting the tone for an ethical, compliance-focused corporate culture “really does start with the board of directors at any financial institution, whether it’s a small community bank or a JPMorgan.”

One way to ensure a board sets the correct tone is to give the chief risk officer or chief compliance officer a direct reporting line to the board. “If you’re trying to filter that information through a traditional business line,” Harrington warned, “they are going to have naturally competing priorities in terms of what they’re going to put in front of the board.”

Fraud-risk assessment should not be a one-and-done action. “Risk profiles do not stay stagnant,” Harrington explained. “As banks grow in terms of geography, as banks enter into new product lines, as banks grow their customer bases in new ways, they are always taking on and potentially in some cases walking back from new types of risk.”

Harrington outlined the full risk-management loop: “You need to identify the risks, you need to assess the risks, you need to mitigate the risks, and then you need to monitor and review whether or not that mitigation works,” he said.

For a small board, a simple process might be ensuring the chief compliance officer or chief risk officer has engaged in an annual review of the bank’s risk, which should include fraud. The board can look at ways the bank’s risk profile has changed that year and a summary of steps management is taking to address those changes, Harrington added.

One risk that has been on the rise is cybercrime. A common problem is that banks don’t address audit findings about problems with cyber risk, said Harrington. He recommended significant findings and issues be put on the board meeting agenda as a line item until they are mitigated.

The full article, “How Boards Can Oversee Fraud Risks at Banks,” was published by Bank Director on Dec. 1, 2025.