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The board of Montreal Museum of Fine Arts fired its high-profile general director, Nathalie Bondil, in July.Valerian Mazataud

Concluding that the crisis at the Montreal Museum of Fine Arts is filled with shades of grey, a Quebec government report on the situation calls for an overhaul of the institution’s governance.

“Nothing is black or white, and it is precisely these shades of grey that reveal the changes that have become a priority if the museum is to remain healthy and relevant,” independent expert Daniel Beaupré writes in the French-language report tabled Thursday with Quebec’s National Assembly. The report was commissioned by Quebec Culture Minister Nathalie Roy after the museum’s board fired its high-profile general director, Nathalie Bondil, in July. Ms. Roy said Thursday she would follow the report’s recommendations to change the provincial law governing the museum and work with the MMFA board to revise its internal rules.

The report found discrepancies between the two and recommended adjustments, as well as better definitions of the roles of the general director and of board members, including those appointed by the province. The province grants the museum about $16-million annually, covering about a third of its operating budget.

The board fired Ms. Bondil July 13, saying the working environment at the museum had become dysfunctional and Ms. Bondil had refused to co-operate with the appointment of a new deputy to help fix the problems. Ms. Bondil, who has fought her dismissal in the Quebec press and is now suing the board for defamation, has said that she disagreed only with the candidate for curatorial director, curator Mary-Dailey Desmarais, because she wanted a more experienced person in the role.

Museum employees have come forward backing Mary-Dailey Desmarais, seen here.Nolan Bryant

Corporate leaders and governance experts have weighed in on both sides, arguing over whether the board had the right to impose a lieutenant on Ms. Bondil. Employees in the museum, angered by what they feel is a distraction from their workplace issues, have come forward backing Ms. Desmarais and complaining of micromanagement and a lack of respect from Ms. Bondil.

Sections of the report dealing with these workplace complaints have been redacted from the version posted on the National Assembly website, as have all the names of the people Mr. Beaupré interviewed. However, his report does state that the independent human-resources report commissioned by the board last year – and which led the board to intervene in the museum’s management and create the curatorial director position – was rigorous and credible, accurately reflecting employees' experience at the time.

“The problems with the working environment were not in the least superficial: the reported perceptions and facts testified to a significant problem,” he wrote.

When it comes to both the hiring process that eventually selected Ms. Desmarais, the board’s involvement and its decision to fire Ms. Bondil, the government report has much to say – almost all of it redacted. It does state, however, that the board acted in good faith in its handling of its own human-resources report, working with the employees' interests in mind.

Mr. Beaupré's report considers whether it’s a conflict of interest to have major donors on boards, as the MMFA and many large museums do, and remarks on the important separation of powers between a board and a general director, and the principle that the chair of the board should not run the institution. Pointing to discrepancies between the Quebec law covering the museum and the MMFA board’s own internal rules, the report makes a series of recommendations that would clarify these roles. It also recommends the board establish an ethics committee and a human-resources committee.

“Reading this report, it’s clear that correctives are needed to improve governance at the MMFA and I will be very happy to work with the new board towards this goal,” Ms. Roy said in a statement in French. A new board is due to be elected at the museum’s annual general meeting on Sept. 29.

Montreal businessman Pierre Bourgie, who has been designated the next chair of the board, said he welcomed the report’s recommendations and he was “happy” with how the board handled the workplace complaints. And Mr. Bourgie, who is himself a major donor to the museum, said he did not think that status put him in a conflict of interest.

“I think it’s perfectly normal that the person who gives money wants to know what’s going on," he said in an interview. “Just like the minister.”

Ms. Bondil’s lawyer, Caroline Biron, said the report outlined “serious governance issues” at the museum. “From our perspective, these issues are directly related to our client’s dismissal and have caused her serious damages,” Ms. Biron said in an e-mail.