On February 28, the Office of the Superintendent of Financial Institutions (“OSFI”) published for consultation a Draft Culture and Behaviour Risk Guideline (the Draft Guideline).

OSFI outlines that : “Culture can influence sound decision-making, prudent risk-taking and effective risk management, which can materially support or weaken the resilience of Federally Regulated Financial Institutions (FRFIs)”. As such, OSFI’s expectations for FRFIs are embedded in a set of principles, notably:

• Desired culture and expected behaviours should be designed to align with the purpose and strategy of the FRFI and governed through appropriate structures and frameworks.

• Leaders, at all levels, should consistently promote and reinforce the desired culture and expected behaviours through their words, actions and decisions.

• Talent and performance management strategies and practices should promote and reinforce the desired culture and expected behaviours.

• Compensation, incentives and rewards should promote and reinforce the desired culture and expected behaviours.

• FRFIs should proactively monitor for, assess, and act to address risks related to culture and behaviour that may influence their resilience.

Comments may be submitted by May 31, 2023.