- Date: December 16, 2016
- To: All Federally Regulated Financial Institutions
Earlier this year, OSFI announced that it would undertake a comprehensive review of the expectations it has of boards of directors of federally regulated financial institutions (FRFIs).
The board of a FRFI plays a critical role in ensuring its safety and soundness and compliance with governing legislation. OSFI’s prudential approach to supervising FRFIs relies on boards to discharge their mandate effectively. OSFI’s expectations for FRFI directors are largely set out in its Corporate Governance Guideline, last updated in 2013. However, other guidelines dealing with specific areas of risk oversight may also contain board expectations, and additional requirements are placed on individual boards through Supervisory Letters that OSFI may send to a FRFI.
Feedback from boards indicates that the total of these expectations can be challenging to navigate and, in some cases, burdensome. Feedback also indicates these challenges can be felt more acutely by smaller FRFIs. The review announced by OSFI aims to ensure that boards can continue to be effective in their role.
As with any proposed change to guidance, OSFI plans to undertake a broad consultation with all FRFIs. OSFI will begin, however, by speaking directly to a number of boards of FRFIs, representing a cross section of size, business model and complexity. OSFI wishes to engage in discussions about its expectations and areas where clarification or rationalization of those expectations would have greatest impact on a board’s ability to effectively fulfill its prudential responsibilities. The feedback received in these targeted discussions will be used to guide the next steps.
If you are interested in participating in these consultations or if you have questions related to this project please contact Judy Cameron, Senior Director, Legislation, Approvals and Strategic Policy (613-990-7337).
Assistant Superintendent, Regulation Sector