Financial regulator wants advance notice of board, executive changes at banks

TORONTO – Canada’s banking regulator wants to be informed before banks and other federally regulated financial institutions make changes to their board or directors or among top executives.

The Office of the Superintendent of Financial Institutions (OSFI) said Monday that it is seeking comment on a proposal that would require such institutions to give it written notice of any changes before appointments are made so it can provide comment.

Deputy superintendent Mark Zelmer said in a letter that the proposal is part of its efforts since the global financial crisis to “enhance corporate governance domestically to meet new international expectations.”

The agency said while the institutions must be able to make independent decisions, including appointments, OSFI may have specific concerns about the appropriateness of a potential candidate.

It said the proposal would formalize current practice.

OSFI would have to be told about candidates for senior management positions at least 30 days before the official appointment, while the identity of preferred board candidates would be provided as soon as the person is identified.

Written notification would include a resume to demonstrate qualifications for the position, rationale for the selection, the date of proposed appointment and a formal assessment, including background checks.

The regulator may also request an introductory meeting four to six months after the appointment for large banks or other entities to ensure the candidate is aware of his or her duties under OSFI statutes.

Canadian banks have been widely considered a model for international banks because they weathered the global recession better than others.