Paragraph 23 of Israel's Civil Service Law laconically states only that "no person shall be appointed to this position except with the government's approval, and according to the conditions specified by it." It says nothing about the conditions to be set by the government. So it is not surprising to discover that for most of the posts covered – and those requiring government approval are naturally at the highest levels – apparently no conditions whatsoever have been set.
One of these positions is that of commissioner for capital markets, insurance and savings. And to anyone who's interested, there are no legal criteria for appointing the commissioner, there are no minimal requirements and no obligation to carry out a formal selection procedure. So anyone can be tapped as commissioner – on condition, of course, that he has government connections, particularly in the office of the finance minister, who makes the recommendation for the appointment to the government.
The current commissioner, Oded Sarig, was chosen at the end of 2009 by Yuval Steinitz, the finance minister at the time. Despite not being required to do so, Steinitz appointed a sort of unofficial search committee to identify candidates and review them. This was Steinitz's way of doing things, apparently due to the importance of the job and a desire to maintain public propriety. At the end of the process he chose an outside expert devoid of political ties, Prof. Sarig.
Finance Minister Yair Lapid has saved himself the bother of setting up a search committee, even an unofficial one. Lapid asked Yael Andorn, his ministry's director-general, to provide him with a list of candidates from which he could choose. He probably explained to Andorn that he really doesn't want any professor serving as commissioner: The capital market has already enjoyed a good laugh about the brotherhood of professors serving as regulators. In addition to Sarig there is Prof. Shmuel Hauser at the Israel Securities Authority, and Prof. David Gilo at the Antitrust Authority. Andorn likely was also instructed to prefer female candidates.
That would be why notable candidates like Assaf Hamdani and Rami Dayan were rejected for the job. Hamdani, a law professor, is considered one of Israel's top experts on the Companies Law and its impact on the capital market. Dayan, a top-level executive at Clal Insurance, previously served as deputy insurance commissioner. These two candidates, presenting experience profiles different from each other but still very relevant for the job, found themselves sidelined – their only fault being apparently that they are men.
Given preference over them was Dorit Salingar, former CEO of the S&P Maalot credit rating agency, definitely a worthy candidate even though her experience is much less relevant to the job than that of the other two. Also, doubts were raised about the public stance displayed by Salingar when she was asked, for instance, to decide on downgrading the credit rating of powerful business concerns at the time, like IDB.
Why not the best?
It bears repeating: Salingar is an experienced executive who is very familiar with the Israeli capital market. Had there been minimum requirements for the commissioner's job she would have met them hands down. But her selection exposes the flaws in the process of the commissioner appointment, along with those for other high-ranking civil servants: lack of criteria, and especially the absence of a structured selection procedure under the auspices of a professional search committee. Such a committee would have examined not only the fulfillment of minimal prerequisites but also maximum suitability for the job – in other words, which of the candidates meeting the threshold requirements is the most appropriate.
It stands to reason that in such a selection process, being a university professor, or simply a man, wouldn't disqualify a candidate, and that his relevant experience – such as the public positions revealed during his professional career – would receive more worthy exposure.
The disappointing thing is that the flaws that surfaced in the selection of the capital markets, insurance and savings commissioner aren't likely to be repaired. For finance ministers throughout the ages it is convenient not to have the law restrict them, but allow them to appoint commissioners as they see fit – even when their choice is less suitable for the job than others.
It is even more disappointing that this isn't a localized flaw. Recall that paragraph 23 of Israel's Civil Service Law relates to a wide range of senior-level positions. It should also be recalled that the most senior economic jobholder of all – governor of the Bank of Israel – is chosen based on a similar provision. The relevant paragraph in the Bank of Israel Law doesn’t establish threshold requirements, criteria, or a need to appoint a search committee for a governor. The ongoing fiasco in appointing the next governor is likely a reflection of this failure.
The obvious result of this continuing slipshod approach for appointments to the highest jobs in the civil service is that someone who wasn't the worthiest candidate has been chosen commissioner – although she was a worthy candidate – and the choice for governor is also unlikely to be the worthiest of the candidates. And all this because the finance minister and prime minister insist on continuing to appoint candidates in an offhand manner according to whim, and not go through a proper, structured, transparent and objective selection process. This isn't how you build a country.
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