In response to recommendations made by OBSI's independent reviewer, the Board of Directors created an ad hoc Governance Committee of the Board in 2012 to oversee the transition to a new governance structure, develop new governance policies and processes as appropriate, and consult with stakeholders on these changes.
In May 2012, OBSI's Board consulted on a draft framework for reforming OBSI's governance structure. The proposals were guided by the following principles: the protection of the independence of the Ombudsman in fact and perception; the involvement and commitment of individuals with knowledge and/or experience in consumer-related issues and the financial industry; and, the continued development and promotion of good governance.
The Governance Committee considered the feedback received from consumer and investor groups, firms and industry associations as well as OBSI's independent Consumer and Investor Advisory Council.
In August 2012, OBSI's Board published its response to stakeholder feedback along with its proposals for modifying the governance framework. It also consulted on a draft corporate Bylaw, reflecting the proposed governance framework as well as the requirements of the new Canada Not-for-profit Corporations Act.
After considering stakeholder comments and feedback, OBSI's voting members approved a new corporate Bylaw at the organization's Annual General Meeting in September 2012. It took effect when the corporation continued under the Canada Not-for-profit Corporations Act.
OBSI's Board of Directors reviewed and evaluated the effectiveness of OBSI's proposed governance structure after two years, including taking into account changes in the membership. It considered opportunities for improvement and identify changes necessary to adapt to the changing environment.
The Board undertakes a full evaluation of its own performance at a minimum once every two years. The evaluation is conducted and reported to the Board by a third party. This third party will not be the same one conducting the external review of OBSI's operations.
The Board of Directors also approved a new policy limiting complaints to those that are raised with the firm within six years of the date when the client knew or reasonably ought to have known there was a problem.
In the spring of 2012, the long-serving Chair of OBSI's Board of Directors, Dr. Peggy-Anne Brown, announced she would be retiring from the Board in September. Three other Directors also planned to step down from the Board after many years of distinguished service. OBSI engaged with executive search firm Odgers Berndtson to conduct a comprehensive, wide-ranging search for a new Chair and Directors.
Fernand Bélisle was appointed as OBSI's new Chair in September 2012. Mr. Bélisle brings to OBSI a wealth of experience navigating complex multi-stakeholder, highly-regulated environments. He was trustee of the Canadian Association of Broadcasters (CAB) during their restructuring and is a consultant to several broadcast companies. Mr. Bélisle previously served as Vice Chair, Broadcasting, at the Canadian Radio-Television and Telecommunications Commission (CRTC), which followed a series of senior executive posts at the organization, including Secretary General. He is a current Director of Corus Entertainment inc., RNC Media inc., and Chair of Xittel Télécommunications inc. Mr. Bélisle has also served on a number of other boards and is active in the community.
Three new Directors were also appointed in September 2012: Jim Emmerton, Executive Director of the British Columbia Law Institute; Kevin Regan, Executive Vice-President and Chief Financial Officer of IGM Financial Inc.; and Janis Riven, adjunct professor at the John Molson School of Business at Concordia University.
All new Directors were selected on the basis of an enhanced competencies matrix developed as part of the consultation on a new governance framework.
Over the course of 18 months, beginning in 2011, OBSI undertook a comprehensive consultation on our investment suitability and loss assessment methodology. We did this in part because the majority of investment complaints that we investigate each year revolve around questions of investment suitability and there had been criticism of our approach from certain securities firms. While firms may agree with all or part of OBSI's process, when there is not agreement it can lead to significant delays in resolving client complaints. That consultation process concluded with a series of enhancements having been made to OBSI's investment suitability and loss assessment methodology.
At the end of October 2011 OBSI received a letter from the Canadian Securities Administrators (CSA), the Investment Industry Regulatory Organization of Canada (IIROC), and the Mutual Fund Dealers Association of Canada (MFDA) concerning the resolution of twenty-one complaints considered to be stuck at impasse as of the date of the letter (several have since been resolved).
At the direction of the regulators, OBSI identified a one-time method of independent review of these cases with a view to bringing them to a resolution. Firms were offered the opportunity to have credible and experienced former commissioners of the Ontario Securities Commission (OSC) provide an independent assessment of the files in question, at the firms' expense, based on standards consistent with OBSI's Terms of Reference. If OBSI had unfairly considered the facts of the case or our investigation findings were objectively flawed, the reviewer would say so in his or her report on the matter. Only one firm took up this offer.