Investor Presentaiton
protection. This proposal is supported by Mouvement d'éducation et de défense des
actionnaires (MEDAC), which recommends strengthening mutual fund governance by
requiring that funds have an independent board of directors whose powers would exceed, by
definition, those of an IRC. This obligation would also apply to financial services firms. Such
a board of directors should also have a majority of independent members 10.
It is nonetheless important to note some experts believe that, while reducing conflicts of
interest, setting up an independent board of directors would not be sufficient to ensure that
managers do not "deviate" from their official duties. Moreover, these experts point to
certain difficulties, including who will sit on the board of directors and how we can know the
board will perform the same, regardless in which fund you invest.
Questions
3. Would setting up an IRC better protect Québec's investors?
4. Can this mechanism adversely affect small firms that want to do business in the Québec
mutual funds market and, consequently, work to the advantage of the big institutions?
10
Since 1940, US law has stipulated that a board of directors be responsible for a mutual fund's
management.
Robert COURNOYER, Fonds communs et gouvernance, une histoire à suivre..., APÉIQ newsletter,
Vol. VIII, No. 1, Spring 2004, pp. 7-8
Consultation paper
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