On January 20, 2014, the Office of the Superintendent of Financial Institutions (OSFI) issued its Draft Advisory Changes to the Membership of the Board or Senior Management of a federally-regulated financial institution (FRFI) for public comment.The Draft Advisory requires a FRFI to provide OSFI with prior written notification of changes to its board of directors and senior management team.  In the case of a change of director, the FRFI must notify OSFI as soon as the FRFI identifies the potential new board candidate, and it must provide OSFI with written notification at least 30 days prior to the appointment of a new senior manager.  For large, complex FRFIs, OSFI may also request an introductory meeting with the candidate shortly following his or her appointment or election.

The Draft Advisory complements OSFI’s Corporate Governance Guideline, published in January 2013, which requires a FRFI to notify OSFI of any circumstances that may adversely affect the suitability of a director or senior manager, as well as any potential changes to its board or senior management team.

Although the Draft Advisory recognizes the importance of a FRFI making its own decisions in the context of its day-to-day operations, including with respect to the appointment of senior managers or the nomination of directors, OSFI will inform a FRFI if it has any concerns regarding the appropriateness of a specific candidate.The Draft Advisory is, therefore, one further step in the direction of a formal corporate governance regulatory approval.