There's a big world outside of the Steem blockchain of potential "recruits" (with their own track-records in related fields) for a governance position. It doesn't have to come from within this small pond.
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Then you would have to set aside a budget to pay those people a wage. They wouldn't do it voluntarily.
Even at current prices this is an asset worth many millions of dollars that is being managed. A budget is not unreasonable.
Of course. If public image is of any importance to Steemit, side stepping situations such as we find here with @aggroed (conflict of interest) should be a high priority, IMO.
It all boils down to a very simple question: is more money gained/ lost in the long-run (all things considered) by hiring on someone from the inside with a blatantly obvious conflict of interest or from the outside, in someone who requires an additional wage (but is also likely more qualified for the position, as he/she is chosen from a pool that consists of billions of people compared to the few thousand that exist on chain, and doesn't come along with the COI label)?
My guess is that investor confidence in Steem is not high at the moment (feel free to guess why I've come to that assessment). I also guess that it'll not grow from Steemit's decision here, but I could be wrong. Time (money) will tell.