High angle view of businesspeople over boardroom table collaborating celebrating

The Mutual Fund Dealers Association of Canada (MFDA) is proposing changes to its governance setup designed to boost independence and allow for longer director tenures.

In a notice published Thursday, the MFDA proposed amendments that would increase the size of its governance committee and the term limits for directors to eight years.

The self-regulatory organization also proposed changes to quorum rules for board meetings and governance committee meetings, requiring that public directors form a majority.

The MFDA said the changes were prompted by a governance review carried out by Borden Ladner Gervais LLP.

“BLG concluded that the MFDA’s corporate governance requirements and practices are consistent with best practices. Nevertheless, as corporate governance practices are ever evolving, BLG offered certain recommendations,” it said.

In adopting those recommendations, the MFDA said the changes will enhance the independence of its governance committee and the quorum requirements for board meetings.

The proposed increase in term limits will “address concerns relating to the limited pool of candidates for election as directors, ensure greater continuity on the MFDA board… and allow the MFDA to benefit from directors who have had a chance to develop familiarity and expertise with MFDA affairs,” it said.

Comments on the proposed changes are due June 12. Read the proposed amendments here.