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MFDA Governance By-law No. 1- Sections 3.3, 3.6.1, 4.7
Letter Summary:
The MFDA board is comprised of an even number of industry directors and public directors. Currently, a quorum consists of a majority of directors, and the proposals would instead require that a majority of public directors be present to constitute a quorum. In addition, the governance committee consists of two public and two industry directors, and the amendments would increase this size by adding one public director and by requiring a majority of public directors to constitute a quorum (instead of one public and one industry director). Finally, with respect to term limits, the current term of office for an industry directors is two years for a maximum of three terms, while public directors serve three years with a maximum of two terms. The amendments would increase term limits to eight years for both type of directors. The proposed amendments are intended to align the MFDA governance structure with those of similar organizations and reflect best practices.
Overview of the Council’s Comments:
We supported the initiative as we understand it to continue to reflect best governance practices for SROs, which we support. Our comments relate to the requirement that the presence of a majority of Public Directors would be required to form a quorum for both MFDA Board of Directors meetings and meetings of the Governance Committee. The complement of Public Directors on the Governance Committee would also be increased by one such that the majority of directors on the committee would consist of Public Directors. Just as we are in favour of public company boards consisting of a majority of independent directors, we believe this should extend to regulatory boards as well.