On January 29, 2026, the Office of the Superintendent of Financial Institutions (“OSFI”) released a consultation on a proposed senior leader regime (“Consultation”). The Consultation is focused on potential changes to a range of existing guidance, including the Corporate Governance Guideline, Background Checks Guideline and parts of the Integrity and Security Guideline. While most of the detailed requirements are still under consideration, the Consultation aims to create a clearer, more formalized accountability framework for “senior leaders”, defined as “members of the board of directors and senior management, including the ‘c-suite’, heads of oversight functions, heads of business platforms, or anyone else reporting directly to the CEO or the board.”
The consultation period is open until October 31, 2026.
Background
OSFI notes that the growing complexity and unpredictability of the financial sector’s risk environment requires senior industry leaders to make increasingly challenging decisions. As the Backgrounder to the Consultation states, “Strong senior leader accountability helps institutions stay resilient, manage risk and maintain public trust.” While suitability and accountability requirements are part of existing laws and guidance, OSFI takes the view that today’s circumstances require a stronger set of standards, including at board level where directors play a major role in setting the tone for effective governance, conduct and risk oversight. OSFI last updated its Corporate Governance Guideline in 2018.
The Consultation sets out OSFI’s general approach and expectations, with most of the detailed requirements to be developed as the consultation continues over the coming months. OSFI envisages alignment with best practices that have been adopted or proposed by jurisdictions such as the U.K., Australia, Ireland and Singapore, while adding that, “[i]n the Canadian context, our research leads us towards a scaled and moderated approach that … complements our existing legislative requirements and guidance expectations.”
An Outcomes-Focused Framework
OSFI’s new principles-based and outcomes-focused senior leader framework will apply to all federally-regulated financial institutions (“FRFIs”). An appropriate framework for management of foreign branch entities in Canada is also contemplated but will not be part of OSFI’s initial focus. Suitability and accountability are the central concepts of the new framework.
Suitability
Suitability is a measure of the qualifications and competence of senior leaders to fulfill their responsibilities. The Consultation envisages the imposition of criteria – such as fitness and propriety – that would be assessed at the time of a senior leader’s appointment and thereafter on an ongoing basis. Specific suitability requirements will presumably be developed during and after the consultation period.
The Consultation clearly states that OSFI does not intend to insert itself into the appointment process for senior management, such as by requiring regulatory approval for such appointments.
Accountability
OSFI is also seeking an improved accountability framework for senior leaders’ decisions, actions, inactions, omissions and, more broadly, their oversight of the FRFI. OSFI plans to adopt an approach under which each institution would be expected to develop, implement and maintain an “Accountability Framework” for ensuring the accountability of its senior leaders.
Elements of the Accountability Framework
The Accountability Framework – which will generally be based on existing internal governance, control and risk management structures – includes the following core elements:
- The suitability criteria discussed above;
- Mapping of the individual responsibilities of senior leadership (roles, functions, accountability);
- A process by which senior leaders will attest to their ability to carry out their responsibilities, both upon their appointment and at regular intervals thereafter;
- A remuneration policy that links compensation to governance outcomes;
- Practices for monitoring compliance, including disciplinary measures in the case of breaches or lapses; and
- A description of the FRFI’s governance arrangements and oversight processes that demonstrates how the institution is structured to ensure accountability. Relevant arrangements and processes include, among others, committees, escalation procedures and a challenge function.
Approval and attestation requirements
Formal requirements for the adoption of an Accountability Framework are expected to be as follows:
- Annual approval by the board, with updates to the Accountability Framework as required;
- Annual submission to OSFI (and at other times if OSFI so requires); and
- Annual attestation by the board chair that the institution is adhering to the Accountability Framework and that all senior leaders continue to meet suitability standards.
Note that the wording of the Consultation suggests that the requirement relating to the board chair is only a possibility at this stage. Another possibility under consideration is a requirement that a summary or version of the Accountability Framework be publicly available.
OSFI is considering the possibility of creating a standardized regulatory return to streamline the submission process for assessments and responsibility maps.
Consultation Questions
The Consultation proposes three questions for the consideration of stakeholders:
- What are the current governance practices of institutions regarding the suitability and accountability of senior leaders? How is the effectiveness of these practices measured?
- What are your reactions to OSFI’s proposal? Will the proposed guidance enhance leadership suitability standards, governance, and public confidence?
- Are there any alternatives to the proposal, or specific elements you think we should include, prioritize, or omit in our guidance? For example, is the scope of our definition of “senior leaders” adequate? Is there a need to expand or reduce it?
As noted above, the consultation period closes on October 31, 2026. OSFI hopes to engage stakeholders at an early stage, so it is advisable, where possible, to submit comments earlier rather than later in the comment period. Information on submissions is provided in the Consultation.
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