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On January 29th, 2026, the Office of the Superintendent of Financial Institutions ("OSFI") published a proposed accountability regime for senior leadership of federally regulated financial institutions (the "Proposal") that would modernize expectations for accountability and suitability across these institutions.
The Proposal aims to modernize governance by requiring institutions to establish and maintain a formal senior leadership accountability framework (the "Accountability Framework") that clearly defines senior leader responsibilities, assesses senior leader fitness and propriety on an ongoing basis, links senior leader remuneration to governance outcomes, and includes mechanisms for monitoring and addressing breaches. The consultation process relating to the Proposal is focused on potential changes to a range of existing OSFI guidance, including its Corporate Governance Guideline, Background Checks Guideline, and parts of the Integrity and Security Guideline. The purpose of the Proposal is to create a clearer, more formalized accountability framework for so-called "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."
While OSFI does not intend to approve individual senior management appointments, and most of the detailed requirements remain under consideration, boards would play a central role through annual approval, oversight, and potential attestation of adherence to the Accountability Framework. The consultation reflects OSFI's view that increased complexity and risk in the financial sector necessitate clearer, more enforceable accountability standards, aligned with international best practices but adapted to the Canadian context. While not OSFI's initial focus, they also intend to evaluate their approach for management of branches in Canada of foreign financial institutions.
Stakeholder may provide feedback up to October 31, 2026.
Overview
The proposal reflects OSFI's view that governance standards, capabilities and practices within Canadian financial services must keep pace with a more uncertain risk environment. OSFI proposes that institutional resiliency, risk management, and maintaining the public trust can be achieved through strong senior leadership. To that end, OSFI will seek feedback on its Proposal. As stated in the backgrounder to the Proposal, the "goal [of the Proposal] is to ensure the regime is practical, effective, and aligned with industry realities and international practices."
The consultation signals a shift toward clearer responsibility, stronger oversight, and more explicit accountability for senior leader within Canadian financial institutions. The extended consultation period will provide time for stakeholders to provide input while minimizing any operational impacts. OSFI has aligned the consultation timeline with its decision to postpone consultation on the draft Corporate Governance and Accountability Guideline.
Defining Senior Leaders and Principles-based and Outcomes-Focused Framework
As noted above, under the Proposal, senior leaders would include members of the board of directors, senior management such as c-suite executives, heads of oversight functions, heads of business platforms, and individuals who report directly to the chief executive officer or the board. The proposal focuses on strengthening both suitability and accountability frameworks.
OSFI intends to regulate senior leadership accountability with a principles-based and outcomes-focused approach, rather than prescriptive rules, and would apply that approach to all federally-regulated financial institutions. This approach would require Canadian financial institutions to design and implement their own Accountability Framework for senior leadership in a way that reflects the institution's size, complexity, and risk profile.
The Proposal includes the following requirements:
Suitability Criteria
The proposal refers to suitability as the extent to which senior leaders possess the appropriate qualifications, and experience to fulfill their responsibilities. OSFI proposes that suitability will be established as assessed at the time of appointment and on an ongoing basis.
The proposal provides that fitness and propriety are the criteria for suitability. Fitness refers to an individual's education, experience, and business record, while propriety relates to character, judgment, and integrity.
Accountability Criteria
Accountability, in turn, involves the clear assignment and mapping of responsibilities, effective oversight, and an obligation to be answerable for decisions, actions, inactions and outcomes. OSFI emphasizes that accountability gives practical effect to suitability by linking individual conduct and competence to governance outcomes.
OSFI proposes the following accountability criteria:
- mapping of the institution's governance arrangements and oversight mechanisms, including committees, escalation protocols, and challenge functions;
- a process under which senior leaders regularly attest, on an individual basis, to their roles and responsibilities;
- compensation practices that link remuneration to governance outcomes; and
- practices, procedures, or mechanisms for monitoring and addressing lapses or breaches, including but not limited to, disciplinary measures.
The Accountability Framework would require approval by the board of directors and would be reviewed and updated annually. OSFI is considering requiring the board chair to provide an annual attestation confirming that the institution is adhering to its framework and that all senior leaders remain suitable for their roles. Institutions may also be expected to submit their framework to OSFI annually or upon request.
Transparency Without Regulatory Appointments
OSFI has been clear that it does not intend to introduce a regulatory approval process for the appointment of senior leaders or to involve itself directly in senior management hiring decisions. Instead, institutions would remain responsible for assessing suitability and maintaining responsibility maps, which would be filed with OSFI on an ongoing basis, potentially through standardized regulatory reporting.
We expect the formal requirements of the Proposal will include, among other things, the following:
- annual approval by the board of the Accountability Framework;
- submission of the Accountability Framework to OSFI annually, or otherwise as requested; and
- annual attestations by the board chair that the institution is adhering to its Accountability Framework and that senior leaders remain suitable to execute their roles and responsibilities pursuant to the standards set out in the Accountability Framework.
Stakeholder Feedback and Next Steps
As part of the consultation process relating to the Proposal, OSFI is seeking stakeholder input on current governance practices related to senior leader suitability and accountability, how the effectiveness of those practices is measured, and whether the proposed guidance would strengthen leadership standards and public trust. OSFI has also invited feedback on the scope of the proposed definition of senior leaders and whether any elements of the Proposal should be added, refined, prioritized, or removed.
If implemented, the Proposal would modernize senior leadership accountability in Canadian financial institutions by moving toward clearer and more enforceable standards. For boards and senior executives, it reflects a regulatory expectation that accountability be clearly documented, demonstrable in practice, and actively maintained over time, rather than implicitly assumed.
We anticipate that OSFI will release a proposed senior leadership accountability regime applicable to foreign entities operating in Canada on a branch basis, though no release timeline has been specified. Additionally, we expect OSFI to issue a draft Corporate Governance and Accountability Guideline and are awaiting its announcement.
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