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John Malloy stands in the halls of Westmount Secondary school in Hamilton on November 12, 2013. Mr. Malloy was named interim director of the Toronto District School Board on Wednesday, Dec. 9, 2015.Glenn Lowson/The Globe and Mail

Ontario Education Minister Liz Sandals says she won't be placing Canada's largest school board under supervision, because the new leadership is a "much better recipe" for fixing major structural problems.

Toronto District School Board trustees appointed John Malloy as interim education director on Wednesday. Mr. Malloy, an assistant deputy education minister and former director of the Hamilton-Wentworth District School Board, replaces Donna Quan, who is stepping down after a rocky tenure.

Ms. Sandals described Ms. Quan's departure as "transformative" for the school board, saying the institution has the new, external leadership it needs.

The government typically resorts to provincial supervision when a school board is in severe financial trouble, Ms. Sandals said in an interview on Thursday.

"It's a really good tool for fixing money, but it's never, ever been a good tool for fixing behaviour," she said. "It's really important that we get the cultural issues fixed."

Ms. Sandals plans to formally respond on Friday to an advisory panel's report that recommended placing the school board under immediate supervision and then breaking it up into smaller entities if improvements were not made within a year.

The TDSB, a product of the amalgamation of seven boards in 1998, has an annual operating budget of $3-billion and more than 245,000 students in 550 schools.

Ms. Sandals said size is not at the root of the board's dysfunction. The school board can avoid being broken up into smaller entities, she said, if it addresses the disconnection identified by the advisory panel at various levels – between parents and school staff; principals and superintendents; executive superintendents and the education director. She will direct the TDSB to reform its administrative structure.

The sense of disconnection is what drives the "culture of fear" identified by the advisory panel and in other official reports, Ms. Sandals said.

The panel, led by former Toronto mayor Barbara Hall, said superintendents are responsible for too many schools – 30 on average – which contributes to the disconnection.

"What you end up with, not surprisingly, is a broken structure in which the board doesn't do a good job of carrying out its core reason for being, which is to ensure the excellent education of students," Ms. Sandals said.

School board sources said it was important to recruit an outsider as interim director, someone with no ties to other staff or trustees. Ms. Quan was a polarizing force during her nearly three years at the helm. She will be seconded to the Education Ministry for the remaining 20 months of her four-year employment contract.

Mr. Malloy was the unanimous choice of a five-member selection committee of trustees, one source said. He got the nod in part because he did not see his 18-month term as a caretaker role.

Trustee Jerry Chadwick said Mr. Malloy represents a "fresh start" for the board.

"I think across the board a deep sigh has gone out," he said in an interview. "We can relax a bit."