Now that JPMorgan Chase is on the verge of reaching a $13 billion civil settlement over the bank’s questionable mortgage practices leading up to the financial crisis, the time has come for CEO Jamie Dimon to relinquish his role as chairman.

The total penalty, which would resolve an array of federal and state investigations, includes $9 billion in fines and would very likely provide about $4 billion in relief for struggling homeowners.

This latest news comes on the heels of the bank admitting wrongdoing to settle an investigation into market manipulation involving the bank’s trading loss in the so-called "London Whale" episode and pay a separate $100 million settlement.

Fighting hard to preserve his legacy, Dimon is attempting through negotiations with the government to put an end to complex legal troubles that have engulfed his firm since May 2012 when the bank announced a $2 billion trading loss (a figure that eventually ballooned up to $6.2 billion).

In return, Mr. Dimon is looking for assurances that JPMorgan Chase would be protected from future expensive litigation. Whether he gets it or not, I believe it’s a safe bet to say that Dimon is no longer the king of banking on Wall Street.

Paying billions to the government will not get the bank completely out the woods. Press reports have indicated that Attorney General Eric Holder will not give the bank a non-prosecution agreement on the criminal side. That means the Justice Department is free to continue its investigation of JP Morgan Chase, and eventually prosecutors will have to decide whether or not to charge any executives at the bank.

In the larger context, that is not good news for shareholders.

So far, likely due to an overall strong operational performance, Mr. Dimon has held onto his main job as CEO and kept his chairmanship. However, there are some rumblings from JPMorgan Chase-watchers that are speculating at some point he will have to step down as chairman although he won strong shareholder support on the issue this past May.

Other storm clouds are appearing on the horizon.

In a recent note after the D.C. meeting, John McDonald, analyst at Bernstein Research, pointed to "reputational damage that could impact both the bank’s business prospects and stock valuation."

His worst-case estimate of the bank’s legal exposure is $31 billion, or around $10 billion more than the bank has set aside. That could be $31 billion the bank won’t have to use for all sorts of initiatives such as lending, hiring, branch expansion, and a return to shareholders in the form of dividends.

If these estimates are close to accurate, why should Dimon remain as CEO and chairman?

Even before the trading loss, the bank was in the spotlight over a series of mortgage backed securities issued between 2005 and 2007 and accusations it manipulated energy markets in California and Michigan.

On the numbers front, a loss was reported in the third quarter as a litany of legal and regulatory problems forced the bank to disburse more than $9.2 billion in litigation-related fees. Despite Dimon’s apparent cult personality of Wall Street, that’s a hit to the bottom line that should concern the board and every shareholder.

For the quarter, the financial services giant posted a loss of $380 million, or 17 cents per share, compared with net income of $5.71 billion, or $1.40 per share, a year earlier. It was the first quarterly loss since Dimon became CEO.

So far, the impact on shareholders equity has been minimal, which may explain in part why Dimon continues to hold both positions. At this writing, the stock was hovering around $54 a share, close to the 52-week high of $56.93 and up 23% for the year. Last November, the stock traded as low as $38.83.

No Longer a "Tempest in a Teapot"

While praised for stepping up and taking responsibility for the massive trading loss, things have gone downhill from there. At first, when rumors hit Wall Street, Dimon said it was a "tempest in a teapot."

Dimon’s reputation was further sullied in May 2013 when a report by the U.S. Senate’s Permanent Subcommittee on Investigations found that the bank’s top risk manager had called warnings about the trading loss "garbage."

For CEOs, producing revenue growth and profits are typically at the top of the list, but increasingly risk management is gaining importance. Maybe that’s why Dimon wrote, in a September 2013 memo to employees, that the bank had increased spending on internal controls by about $1 billion this year and dedicated more than $750 million to address concerns from regulators. Dimon also stated that some 5,000 employees have been assigned to compliance activities.

Functions Should be Separate

In my view, given what’s happened at the bank, Dimon simply does not deserve both titles. As outstanding as he is, he has demonstrated that he cannot effectively manage all aspects of an enterprise as large as JPMorgan Chase.

Even if the bank was squeaky clean, a case can be made that it’s about accountability. The operator (CEO) should be running the business and the board should essentially oversee all activities (including risk management).

While there is uncertainty about whether a final deal will be made with the government and what that deal will ultimately cost, changes on the board are likely, and there will be a new board chair of JPMorgan Chase.

As time has proven, no one is irreplaceable or larger than the enterprise they represent ... not even Jamie Dimon.

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Richard E. Nicolazzo is managing partner of Nicolazzo & Associates, a strategic communications and crisis management firm headquartered in Boston, Mass.