Canadian bank regulators this week issued new corporate governance guidelines (PDF) for banks and insurance companies. The most significant changes relate to board effectiveness, composition and competencies; risk governance, including risk appetite frameworks; and the roles of the chief risk officer and the audit committee.
Institutions under the regulator's purview would be expected to develop a company-wide, board-approved "Risk Appetite Framework" tailored to their activities and operations. The framework would set basic goals, benchmarks, parameters and limits, such as loss levels, on how much amount risk an institution is willing to accept. It should consider the material risks as the institution’s reputation vis-à-vis policyholders, depositors, investors and customers. the regulator said.
The main objectives of the revised guideline, it said, are to: Ensure that federally regulated financial institutions have prudent corporate governance practices and procedures that contribute
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