Who selects new mods, is it the other mods or just Arn? If it's all the other mods, then I think you may end up with a group-think problem eventually, as they would only approve of someone who is like them and not every mod here in MR's past has been stellar.
So, I would actually be happier if Arn was the sole person to choose Admins and Moderators for the forum (based on recommendations), because he's the only person who knows the entire history of the site, and what did and what didn't work in the past. He's also very intelligent and has proven he knows how to run a great website.
On a slightly different topic...
On a forum I once managed, I assigned mods to particular forums, which allowed them to become better familiar with the "atmosphere" and users of that forum. If the forum was about a topic the mod was interested in, I noticed the forum was better moderated as a result. This system worked well for us. It also meant we needed more mods to cover all the forums, which meant we always had the right number of mods at all times. While the mods recommended people for new mods, I ultimately made the decision myself to be sure we got a good variety of people and not just online friends of other mods.
We also implemented 1 year terms for mods, which I could either renew or not at the end of that term. Most of the time, the mods decided this for themselves, either to stay on for another year, or go back to being a regular member if they were burnt out. Term limits assured we had a team of mods who were dedicated to the job at hand, with enough turnover to keep things fresh and moving along with little stagnation.
Just a few suggestions you may want to ponder for MR.