The Mutual Fund Dealers Association has struck a task force to examine how it appoint new board members after December’s annual general meeting, where members voted down the proposed amendment that would have seen term extensions for directors.

In a bulletin released Thursday, the MFDA says a number of issues relating to the governance of the MFDA resulted from the meeting including:

> the failure to pass By-law 15 respecting the definition of public director and the terms of office of all directors;

> the process for nominating and selecting members of the board;

> the process for making and/or amending the by-laws and rules of the MFDA; and

> the failure to elect three proposed public directors.

The MFDA says a task force will be established comprising the Governance Committee and additional members from smaller dealers and the public.

“The task force will conduct a review of the relevant governance principles and engage in a robust consultation process with members, the CSA and interested members of the public,” the MFDA says.

According to the MFDA, the failure to elect three public directors also raises issues with respect to the constitution of the current board.

“The approach of the board is to maintain its current composition with one vacancy of a public director in order that the board can continue to oversee the operations of the MFDA with an appropriate balance of industry and public directors. This interim position is consistent with the corporate legal principles that are applicable in the circumstances,” the MFDA says.