OSFI plans on staying ahead of the curve.
The Office of the Superintendent of Financial Institutions (OSFI) is looking for ways to better monitor and enhance the corporate governance framework across the country’s banking sector.
This week, OSFI released a consultation letter about its guideline on the corporate governance of federally regulated financial institutions. The new guideline is expected to reflect the changes in the corporate governance setting, common industry practices and provisions relating to international business transactions.
‘In light of the global financial crisis and the increasingly heightened attention regarding the corporate governance of financial institutions (by industry and regulators), the current version of the OSFI guideline is no longer consistent with current industry best practices and international standards,’ says OSFI.
The original version of the guideline was first published in 2003 and the regulator notes that since then corporate governance has evolved tremendously and financial institutions should be provided with clarity on effective governance measures.
OSFI hopes to equip boards with sufficient knowledge of their governance responsibilities and required competencies. Another hot button area is risk management and the regulator’s new rules will offer guidance on navigating through risky activities and improving overall internal controls.
