Responsibilities and structure of the board
The board of executive directors (EDs) is based at the World Bank Group’s headquarters in Washington DC. It functions in continuous session and usually meets twice a week. It is responsible for policy decisions affecting the World Bank Group’s operation, and approval of the International Bank for Reconstruction and Development (IBRD) loan and guarantee proposals and International Development Association (IDA) credit, grant and guarantee proposals. It must also present an audit of accounts, an administrative budget, and an annual report on the Bank’s operations and policies to the board of governors at the annual meetings. The board of governors is a largely ceremonial body made up of finance and development ministers which meets only twice a year. The board of EDs considers the “evolving perspectives of member countries on the role of the Bank Group as well as the Bank’s operational experience.”
Appointment of executive directors
There are currently 24 EDs on the board, one each for the five largest shareholders at the Bank- US, Japan, Germany, France and UK (see box). Other countries are grouped into constituencies, each represented by an executive director. Under the articles of agreement of IDA and the International Finance Corporation (IFC), the EDs of IBRD serve ex-officio to both of these institutions. The Multilateral Investment Guarantee Agency (MIGA) has its own separate board of directors, consisting of 24 members, all of whom are elected. However, in practice the same individuals are chosen to serve on its board.
The five largest shareholders appoint their ED, while the others must hold elections. Elections of EDs are held every two years, normally during annual meetings. Elections are coordinated by the Bank Group’s corporate secretariat, which supports the day-to-day operation of the board. The secretariat anticipates changes in constituency groupings resulting from new memberships or political events, as well as increases in members’ capital subscriptions and the corresponding changes in voting power. The next elections will be held at the annual meetings in 2006 in Singapore. In the event that an elected ED terminates service before the next scheduled election, the affected constituency holds an interim election for a successor, either by mail vote or during an annual meeting that does not fall in a regular election year.
The Board makes decisions by consensus. Rarely does a decision require a formal vote. However, the relative voting power of individual executive directors, based on the shares that are held by the countries they represent is present in EDs minds when they calculate whether or not to support a project or policy. The president (or a delegate of his) chairs the regular board meetings. If there isn’t sufficient support for a project, its discussion is postponed rather than pressing ahead with a divisive vote. This triggers further behind-closed-doors negotiations between EDs offices.
Each ED also serves on one or more of five standing committees, which carry out in-depth examinations of policies and practices to assist the board with its oversight responsibilities: the audit committee, budget committee, committee on development effectiveness (CODE), personnel committee, and committee on governance and administrative matters (COGAM). Committee meetings are chaired by one of the EDs as decided by committee members.
Established in 1994, the committee on development effectiveness oversees the operations evaluation system of the Bank and IFC. It considers such issues as operational policies and safeguards, and monitors the implementation of Bank activities to ensure that the overall purpose of reducing poverty is being achieved. The eight-member committee also:
- plays a key role in the Bank’s efforts at harmonization
- Reviews the work program and reports produced by the Operations Evaluation Department OED and the Operations Evaluation Group (OEG) of the International Finance Company (IFC)-and management’s responses to them
- Examines selected issues concerning operations evaluation and development effectiveness, for review and decision making by the board.
The committee on governance and administrative matters makes recommendations to the board on issues of governance and administrative policy such as codes of conduct on corruption. It is the key committee in following up on the agenda to increase the ‘voice’ and participation of developing countries at the Bank and plays a key role in policy relating to codes of conduct on corruption.