Managing Culture And Behaviour Risks: OSFI's New Draft Guideline For Financial Institutions

On February 28, 2023, the Office of the Superintendent of Financial Institutions ("OSFI") released a draft Culture and Behaviour Risk Guideline (the "Guideline"). The Guideline outlines OSFI's expectations for Federally Regulated Financial Institutions' ("FRFI") management of culture and behaviour risk to support their risk governance and resilience. The Guideline provides several defined terms to assist with interpretation, and lists expected outcomes and important principles for FRFIs to develop.

The principle-based expectations are as follows:

• desired culture and expected behaviours are designed to align with the purpose and strategy of the FRFI and governed through appropriate structures and frameworks;