The Office of the Superintendent of Financial Institutions (OSFI) is launching a consultation to review its expectations for boards of directors of federally regulated financial institutions in an effort to “ensure that boards can continue to be effective in their role.”
OSFI’s expectations for directors are largely set out in its corporate governance guidelines along with its guidance on risk oversight and other, firm-specific, supervisory efforts. The regulator indicates that directors have complained that these requirements can be tough to meet.
“Feedback from boards indicates that the total of these expectations can be challenging to navigate and, in some cases, burdensome,” OSFI says, adding that smaller firms may have a particularly hard time.
As a result, OSFI is starting its review with a sample of boards from firms of different sizes and business models.
“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 regulator says, adding that these initial discussions will help shape a broader consultation to come.
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