African Development Bank
Fixing international financial institutions: how Africa can lead the way?
Argues for governance reform in international financial institutions
Authors:
D. de Tray; T. Moss
Publisher:
Center for Global Development, USA, 2006
This Centre for Global Development Note argues that the boards of other international financial institutions should follow the lead of the recommendations made by the African Development Bank (AfDB) to streamline its governance structure. This recommendations specifically involves transforming its board of resident executive directors into a non-resident, non-executive body.
The brief argues that non-executive, non-resident boards would force the governing bodies to focus on their core responsibilities: setting strategy, establishing benchmarks for management, and monitoring of execution. A non-executive model would also increase accountability by reducing the overlap of responsibilities within the institutions, and it would reduce costs of all kinds.
The article argues that the multilateral system's mission of spreading global prosperity is too important – and these institutions too pivotal to that mission – to leave them languishing in an outdated and ineffective governance structure. Freeing management and staff to focus on the countries they are supposed to serve rather than keeping a resident board happy would sharpen accountability and improve effectiveness with no loss of oversight.
