MSRB taking first steps in finding new CEO

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The Municipal Securities Rulemaking Board and its search firm are taking first steps to find the MSRB's next president and CEO , including gathering insight from the industry.

Sources say the executive search firm retained by the MSRB, Spencer Stuart, has been calling prominent muni market figures with questions about what the board does well and not so well and gauged their overall opinion of the self-regulatory organization. MSRB hired Spencer Stuart last month.

A municipal market participant said they received an email from both the search firm and the MSRB’s CEO Search Special Committee, which was formed this fall. In the email, they asked the market participant to set up a call with Spencer Stuart.

The MSRB said it is in its feedback gathering stage and that finding a new leader is a board priority for this fiscal year ending September 30, 2020. Former President and CEO Lynnette Kelly left the MSRB at the conclusion of the fiscal year that ended Sept. 30.

It took the MSRB about ten months to find Kelly as its new leader in late May 2007. The board announced that former MSRB Executive Director Christopher “Kit” Taylor was leaving at the beginning of August 2006.

Sources guessed that by the first quarter of 2020, the MSRB would be sending out a job description to set the criteria. Candidates are typically interviewed by the search firm, then a search committee and then the entire board may meet the final candidates, a source said.

The MSRB said they do have a plan on finding the next CEO involving the engagement of Spencer Stuart and that MSRB’s special CEO search committee will “facilitate the search.” The board then will decide on the next CEO.

The MSRB noted that choosing a new CEO is the board’s decision and that the process would not be described publicly. The MSRB would not say what the special committee’s process would be.

Spencer Stuart said it was not able to confirm what they are or are not working on, and could not comment on specific projects. The firm has 60 years of experience in leadership consulting.

The search firm wanted to know what characteristics to look for in the next CEO, said Chuck Samuels, general counsel to the National Association of Health and Educational Facilities Finance Authorities.


Samuels was contacted by Spencer Stuart and said he was asked about his thoughts overall on the MSRB. Samuels sees the process as a transitional opportunity.

“The board would be well served to consider somebody with a substantial background as an issuer or in state and local government,” Samuels said. “Of course, this person must be an outstanding leader and manager as well. Fortunately, given the generous compensation available there should be no paucity of candidates."

Before leaving the MSRB, Kelly earned as much as about $1 million in annual compensation.

Market participants said the MSRB may be surprised to hear some of the feedback from stakeholders.

A market participant told the search firm that the position itself pays too much and that the role of the organization needs to be more clearly defined.

“My guess is that this is the first step of the board to figure out what the perception is of the organization and they’re going to get an earful,” the market participant said.

The MSRB has a blank slate, he said, and could use the opportunity of finding a new CEO as a way to redefine the MSRB’s function.

A lobbyist received a call from the search firm this week and said she was not asked about Kelly at all, but was asked what it was like to work at the MSRB. The lobbyist has not worked for the MSRB, but the question may have stemmed from an internal staff survey or other stakeholders the search firm may have called, she said.

In August, multiple sources independently confirmed that prior to the departure of Kelly and former Chief Regulatory Officer Lanny Schwartz, the board had conducted an internal staff survey that “didn’t go well” and reflected “a lot of dissatisfaction.”

This past year, five total senior officials have left including Kelly, Schwartz, General Counsel Michael Post, Chief Communications Officer Jennifer Galloway and Chief Education Officer Ritta McLaughlin.

“We’ve seen a lot of departures recently,” the lobbyist said. “Everybody that I’ve talked to is wondering why? Why all the departures at the same time?”

The MSRB has to rebuild, she said.

“Staffing shouldn’t be done in haste, you’ve got to get the right person with the right qualifications, understanding of the industry and who also works well with others,” the lobbyist said.

The search firm asked the stakeholders about what direction the MSRB should go in, what they do well and where they don’t do well, said Mike Nicholas, CEO of Bond Dealers of America.

Nicholas was contacted by Spencer Stuart and said he was asked how the MSRB should be organized and what attributes a new MSRB leader should have.

“It’s a tough job and Lynnette has done a great job for a number of years,” Nicholas said.

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