Canada's financial regulator wants companies to spell out exactly who's responsible for what at the top, and tie executive paychecks to how well they govern.
The Office of the Superintendent of Financial Institutions released a consultative document on January 29, 2026, proposing a senior leader regime that would modernize suitability and accountability expectations for federally regulated financial institutions under the Insurance Companies Act, Bank Act, Trust and Loan Companies Act, and Cooperative Credit Associations Act.
Under the plan, federally regulated financial institutions would need to build their own Accountability Framework using governance documents and risk management structures they already have. The framework would need to spell out how accountability works and how it gets tracked.
OSFI defines senior leaders broadly: board members, the c-suite, anyone running oversight or business units, and anyone reporting straight to the CEO or board. Suitability means fitness, which covers education, business record, and experience, and propriety, which covers character, judgment, and integrity. Accountability means clearly assigning responsibilities, oversight, and making sure people answer for their decisions, conduct, and outcomes.
The framework would need several pieces. First, suitability criteria that apply when someone gets appointed and continuously after that. Second, a map of individual responsibilities that shows what each senior leader actually does and what they're accountable for.
Companies would also need to map out their governance setup: committees, how problems get escalated, how decisions get challenged. Senior leaders would need to regularly confirm in writing what their job entails, especially when they first take the role.
Compensation would need to connect to governance outcomes. The framework would also need to explain how the company monitors problems and what happens when someone falls short.
Boards would need to approve the framework and send it to OSFI every year, or whenever the regulator asks. The board chair might also need to confirm annually that the company is following its framework and that senior leaders remain suitable for their jobs.
OSFI is weighing whether to make companies publish a version of their framework, either on their own or when someone asks for it.
The regulator made clear it won't approve appointments or get involved in hiring decisions. Companies would file their own assessments and responsibility maps with OSFI on a regular schedule, possibly through a standard form.
OSFI says the regime responds to a changing landscape. Financial services are getting more complex, new technologies and products are creating different kinds of risks, and company structures are getting harder to oversee.
Recent governance problems in Canada and bank failures around the world showed the need to make sure senior leaders can handle the pressure and stay accountable when risks mount.
OSFI looked at how regulators in the UK, Australia, Singapore, and Ireland handle senior leadership. For Canada, the regulator settled on an approach that follows international patterns but fits with the rules already on the books.
Federal law and OSFI guidance already cover some of this ground. But emerging risks call for stronger measures to fill in the gaps.
The consultation runs through October 31, 2026. OSFI plans to put the regime in place sometime in the coming year.
External link to consultative document: https://www.osfi-bsif.gc.ca/en/print/pdf/node/3133
