IFI governance


Changes at the top for IFC and its accountability mechanism

6 October 2020

The World Bank’s private finance arm, the International Finance Corporation (IFC), and its independent accountability mechanism, the Compliance Advisor Ombudsman (CAO), will both undergo changes in leadership at a time when the World Bank’s approach to the private sector in development has become ever more contentious in light of multiple crises triggered by the Covid-19 pandemic (see Observer Spring 2020).

The IFC’s Chief Executive Officer, Philippe Le Houérou, announced via Twitter on 7 June that he will be stepping down from his position, effective 1 October (see Observer Summer 2020). As reported in Africa Intelligence on 18 August, Mari Pangestu, the World Bank’s new managing director of development policy and partnerships, will chair the recruitment panel for his replacement.

A call for the selection of the first-ever woman for the position was made in an August article in US political publication The Hill, where former senior World Bank officials called for the US administration to use its significant influence on the process to nominate an African woman to the post. A 21 July blog by US-based think-tank Center for Global Development also called for the inclusion of a woman on the shortlist of candidates. The blog stressed that, “this is a time for [World Bank] President David Malpass and the shareholders to put qualifications, experience, and demonstrated track record first.”

Le Houérou’s departure coincides with the replacement of the CAO’s Vice President, Osvaldo L. Gratacós, who concludes his term at the end of December 2020. Highligthing the importance of the new CAO vice president, a 18 September blog by US-based civil society organisations Bank Information Center and Accountability Counsel stressed that, “Given the current context, it is paramount that the new CAO VP have impeccable integrity, a demonstrable history of independence, and credibility with civil society and communities.”

In addition to taking the helm under the testing environment of the Covid-19 pandemic, during which pressure to get money out the door may well increase the risk of harms resulting from IFC investments, the new IFC CEO and CAO vice president will be responsible for the oversight of the implementation of the recommendations of a review of the IFC’s environmental and social accountability and the CAO’s effectiveness (see Observer Autumn 2020).