In the wake of its latest round of independent reviews, which recommended a variety of reforms, the Ombudsman for Banking Services and Investments (OBSI) is undertaking a public consultation into proposed changes to its governance model.
OBSI issued a consultation paper seeking feedback on its governance model. It also plans to hold a virtual roundtable on Jan. 19, 2023 to consider possible changes to its current design.
“This consultation is focused on understanding how OBSI’s board can best ensure that it has the opportunity to consider the perspectives of stakeholders with financial service industry expertise and consumer advocacy expertise in its decision making,” OBSI said in a release.
The independent review, which was published in the spring, recommended, among other things, that OBSI consider revising its governance structure to do away with designated directors to represent the industry, and directors to represent consumers.
It also recommended eliminating the requirement that industry directors be nominated by industry trade group the Canadian Bankers Association (CBA), and by the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers’ Association of Canada (MFDA).
The review argued that doing away with designated directors “would emphasize the importance of OBSI’s impartiality and independence (and its perceived impartiality and independence among stakeholders), and would remove any inference that directors might use their position to represent a particular stakeholder group.”
It also suggested that a remodelled approach to governance at OBSI will be more flexible. And, it indicated that OBSI should consider scrapping its Consumer and Investor Advisory Council (CIAC), assuming that the existing board structure is reformed.
Now, OBSI’s consultation seeks feedback on the recommendation to do away with designated board representatives; and, if it retains the existing model, how the board should be formed.
It also asks for input on alternative ways of ensuring adequate consumer and industry involvement with the organization apart from designated directors, such as roundtables, focus groups, and task forces to engage on specific issues.
Alongside the independent review’s recommendations, the consultation noted that the proposed SRO reform (starting with the merger of IIROC and the MFDA) also represents an opportunity to reconsider the director selection process.
“OBSI will carefully consider all submissions received as we work towards updating our organizational governance structure and we will consult with our regulators on any proposed changes,” it said.
The deadline for responses to the paper is Jan. 31, 2023, and it has launched an online survey to gather feedback too.
Any proposed changes to the governance model, including further consultations, are expected later in 2023.