WASHINGTON - Should the membership of the Municipal Securities Rulemaking Board represent America, a cross section of the municipal securities industry, or just the market's movers and shakers?
That is the question now before every member of the industry, given the recent criticism leveled at the MSRB by two black securities professionals who point out that the board has never had a black member in its nearly 20-year history.
In fact, a former public member of the board has joined the criticism, saying that the MSRB has what he termed a "closed" process for selecting new members that makes it difficult to bring in women and minorities.
The question represents a dilemma that has and probably will continue to haunt the 15-member rulemaking board.
The MSRB obviously needs to draw the bulk of its members from the upper echelons of the municipal industry if it is going to effectively write rules for the ever-changing market.
But that also has meant that the makeup of the board has tended to be self-perpetuating and doesn't come very close to representing the overall composition of the municipal industry, let alone America.
The result is that the MSRB tends to represent what best can be termed "an old white boys club" because those are the people who tend to run the top firms and banks in the industry.
The board has included several women and a few Hispanic members over the years, which reflects the increasing numbers from those groups that have made their way up in the municipal securities industry.
Even though there is a small, but increasing, number of blacks in the inudustry, including some who operate their own small firms, not a single black has ever been elected to serve on the MSRB.
Some have been nominated, but none elected, in part because of a classic Catch-22. The black professionals that were nominated did not hold senior enough positions to be selected for the board, some former board members have argued, because the board wanted to select the most qualified people available. Yet black professionals as a group will never get into senior positions, where they can show they are qualified unless they are allowed to hold responsible and visible positions, such as a seat on the MSRB.
While the board's mission is not to engage in social policy, it does have a responsibility to lead - in this case, by going out of its way to find a qualified black professional to serve on the board.
After nearly 20 years, it's high time that the membership of the MSRB looked a little more like America.
