The IMF and the World Bank are international organisations, established by international treaty, and accountable to the 184 countries who are their members and shareholders. For each institution the highest governing authority is the board of governors, which meets once a year; but responsibility for the day-to-day operations of the institutions, and for most decisions on policy and country issues, is delegated to the two executive boards. Each board is made up of 24 executive directors (EDs), chosen by the 184 member countries to represent them, and chaired by the managing director (in the Fund) and the president (in the Bank); and each meets, in Washington, for two or three (rather full) days each week. By tradition most decisions are taken by consensus, rather than by majority vote.
The UK is (with France) the joint fourth largest shareholder, with about 5 per cent of the shares of each institution; the chancellor of the exchequer is the governor of the IMF, and the secretary of state for international development is the governor of the World Bank. They appoint the UK’s executive director – since 1945 we have had a single ED for both institutions – who is supported by two alternate EDs and six advisers (from DfID, HM Treasury and the Bank of England). We work very closely with our counterparts in London, who are responsible for our instructions on positions and lines to take.
So what do we do all day? Well, reaching consensus on complex and often controversial issues takes time, so board meetings are a major part of our work. But on any issue the board meeting is typically the end of a long process, and to get the right result it is crucial to intervene much earlier; so we also spend a lot of time in discussions with Bank and Fund staff, trying to influence their work, often on projects or policy items that may not come to the board for several months. Of course, in an international consensus-based organisation we can only achieve results by working with others, so we are also in constant touch with other EDs and their staff, listening to their views and trying to build support for our proposals. We are in continuous dialogue with London and DfID’s country offices, reporting on these discussions, giving advice on how to take forward our various objectives, and receiving new instructions. And it is also essential that we receive and reflect views and experiences from the world outside the institutions – NGOs, think tanks, visiting ministers and country officials, parliamentarians, and so on. All this information from these many sources is fed in and absorbed and reflected in our position at the board -and, where we are successful, in the policies and actions of the Fund and Bank.
so what do we do all day?
Is this a good way of running an institution? Well, it has real strengths. Decisions are, in almost every case, taken genuinely by consensus, reflecting the views of 184 countries, and the international cooperation this brings about is a global public good. A board of 24 strikes a reasonable balance between inclusiveness (giving every country a way of influencing the debate) and effective and timely decision-making. The wealth of country experience often brings valuable and unexpected insights. But there are some clear challenges to address if the boards are to meet the highest modern standards of effectiveness and accountability. In particular, we need to do more to strengthen the voice of developing countries at the boards. Some progress has been made – for example, greater support to the two African EDs who between them represent 45 countries – but we must go further. And we need greater transparency around the decision-making process at the boards. Again there has been good progress – for example, most board documents are now released, and since April of this year the Bank has published the minutes of board meetings – but we need to do more, to improve effectiveness and strengthen confidence in the process. Progress on these two issues will not happen overnight, given the need for a broad consensus. But they are UK priorities and we will continue to press them.