Last week, Canada's Office of the Superintendent of Financial Institutions (OSFI) published its final guideline on Integrity and Security. The guidance lays out the regulator's expectations for how financial institutions can protect themselves against threats to their integrity and security and maintain public trust.
"Resilience and trust in the financial system depend upon the integrity and security of financial institutions," said Peter Routledge, the Superintendent of Financial Institutions. "Though much work remains, this guideline serves as an important, initial step towards enhancing integrity and security in the financial system."
The guideline lays out four key principles by which firms can enhance the integrity of their organization:
- Ensuring people are of good character;
- Promoting a culture that values compliance, honesty, and responsibility;
- Subjecting actions, behaviors, and decisions to sound governance; and
- Verifying compliance of actions, behaviors, and decisions with regulatory expectations, laws, and codes of conduct.
"Integrity is an important value in and of itself," OSFI writes. "A lack of it can damage reputation, result in fraud, cause legal issues, and increase vulnerabilities to undue influence, foreign interference, and malicious activity."
In an interview for Starling's 2022 Compendium, Routledge discussed the philosophy behind OSFI's culture regulation.
"In the culture taxonomy that we have created, diversity of thought, leadership, and group dynamics are examples of areas where we can begin to assess effective culture practices," Routledge said. "Future work includes looking more closely at senior executive compensation structures and related measurement to support and reinforce a culture of integrity and effective risk management at all levels." ▸ Read More