C56 OSFI CORPORATE GOVERNANCE

OSFI’s Supervisory Assessment → Roles of BoD & Senior Mgmt

Board

• Oversee mgmt

• Understand regulatory env the company operates in

Senior Mgmt

• Oversee operations

• Implement BoD’s decisions

OSFI Supervisory Assessment → Key Oversight Functions

• BoD

• Senior Mgmt

Role of Corporate Governance in OSFI’S Supervisory Process

• Protects policyholders

• Reduce amt of supervisory resources OSFI needs

Changes to BoD or Senior Mgmt

Notify OSFI

• Provide info on qualification of candidates

Risk Appetite Framework should contain:

Risk Appetite Statement

• Reflects aggregate lvl & type of risks the entity is willing to accept

• Forward looking

Risk Limits

• Allocation of Risk Appetite Statement to risk categories, LOBs, etc.

• Often quantitative

Risk Appetite Framework → Roles

Board → approve risk appetite framework

Senior Mgmt → implement risk appetite framework

Chief Risk Officer → assess risk appetite framework

• Report to BoD & mgmt

Internal Audit → routinely assess compliance

Risk Appetite Statement

FATS

• Reflects Aggregate level of risk

• Reflects Type of risk FRFI’s willing to accept

• Forward looking

• Considers normal & stressed Scenarios