Why is it a closed door process ?? - A closed door process can lead a Cartel ruling Jatland (not that I think this is the present case, but is for sure a future possibility) just like a Communist Party Politburo
And who are the people involved in that process and why are those particular people involved ??
My 2 cents... Its closed door to the extent it is not a popularity contest, or a democracy. We have experimented with a poll many years ago and broadly stuck to the mandate. But in hindsight, the process was not really helpful. A domacratic process leads to its own issues - for eg, an implicit division into "camps".
As far as I can recall, in case of almost every mod, we have requested them to take on the added responsibility. It is not a "reward", and all the mods can attest to that.
That said, the process is not quite as abrupt as you might think. As you would have noticed, mods keep changing depending on availability. The existing mods discuss potential candidates privately (admin forum etc), almost always before the person even knows that he/she is being considered. No one individual makes the decision on his/her own. For eg, in more than one case, I did not know too much about the person beforehand, but other mods thoughts it made sense.
The public nature of the forum automatically means a sharp light is on all mods, which helps provide a self check. The senior mods also help the newer ones "calibrate" their responses to ensure consistency. Without going into too much detail, let me say that mod actions can and are often discussed by other mods.
In any conflict situation, one party would have a tendency to feel offended or unfairly treated. The mods try to be consistent and fair, and sometimes, at the margin, they could have decided differently. That is the nature of the beast, so lets get on with it.