[stop-imf] IMF/Bank report on selecting institutional leaders
Robert Weissman
rob@milan.essential.org
Mon, 30 Apr 2001 11:31:47 -0400 (EDT)
Clean text at:
http://www.imf.org/external/spring/2001/imfc/select.htm
The Bank Working Group to Review the Process for Selection of the
President & The Fund Working Group to Review the Process for Selection of
the Managing Director
Draft Joint Report
April 25, 2001
This draft joint report,
together with the summing up of the IMF's Executive Board's discussion on
this
matter, is circulated for
the information of Members and Associates of the International Monetary
and
Financial Committee. April
29, 2001
Introduction
1. In July 2000, the World
Bank ("Bank") and International Monetary Fund ("Fund")
Executive Directors
established separate Working Groups to review the process for selection of
the heads of their respective
institutions. Under the Bank's Articles of Agreement, Executive
Directors select the
President; similarly, the Fund Executive Board selects the Managing
Director.1 While selections
have reflected certain understandings among Bank and Fund
members about the nationality
of the heads of the International Financial Institutions (IFIs),
neither the Bank nor the Fund
has specific formal selection procedures for the
President/Managing Director.
2. The lack of a clear
procedure raised critical issues during the 2000 selection process for the
Fund Managing Director.
Executive Directors in both institutions subsequently agreed that a
concurrent review of the
selection process was timely and necessary, and Working Groups were
established in each
institution to undertake this task. The Working Groups examined possible
means for improvements to the
selection process of the President and Managing Director,
which would apply whether or
not there are any understandings regarding the nationality of the
President/Managing Director.
Past Selection Processes
3. The Bank selected its current President in 1995
and elected him to a second term in 1999. The search process was
triggered by the incumbent's decision to leave his
post before his term had expired. The Executive Directors agreed on
several
basic qualifications for the post.2 The U.S.
government established a Search Committee (chaired by the Treasury
Secretary)
and used these qualifications in screening
prospective candidates. The Committee (assisted by a professional
executive search
consultant) researched and reviewed a preliminary
list of candidates. Recommendations from Member countries were
reviewed, including non-U.S. citizens. The U.S.
Executive Director kept the Dean of the Board informed about the various
stages of the search process. Eventually, the U.S.
President chose a finalist (Mr. Wolfensohn) who was nominated to the
Board by the U.S. Executive Director. The Bank's
Executive Directors subsequently selected Mr. Wolfensohn as President
by adoption of resolution, per usual Bank
procedures.
4. The 1999Ð2000 search process for the Fund
Managing Director was also triggered by the incumbent's decision to leave
his post before his term had expired. Although the
Managing Director had notified the Executive Board several months
before his planned departure, the selection process
was not completed by the time he left the Fund. There were intensive
consultations among capitals, not only involving
European Union (EU) Member countries, but the U.S., Japan, other
European countries, and some developing countries.
The selection process generated considerable publicity as well as
criticism from outside observers about its
non-transparency and "politics". For the first time in the Fund's history,
non-European candidates were nominated for the post.
The Executive Board, meeting in informal session, used straw polls to
determine if any of the three nominated candidates
had a majority of support.3 None did (and there were several abstentions).
A new candidate from the EU (Mr. Kšhler) was
eventually nominated to the Executive Board. The Fund's Executive Board
subsequently selected him as Managing Director.
5. During the selection process, the Fund Executive
Board met in informal session and noted the following principles
recommended by a group of Executive Directors
concerning the selection of the Managing Director, namely:
Executive Directors should be informed in a
timely manner regarding candidates, including their credentials and
knowledge of the institution;
all members of the Executive Board should be
consulted in the process of considering candidates that leads to the
selection of the Managing Director; and
a plurality of candidates representing the
diversity of members across regions would be in the best interests of the
Fund; the goal is to attract the best
candidates regardless of nationality.
Activities of the Bank and Fund Working Groups
6. The Bank and Fund Working Groups have met at
least monthly since their establishment to review past practices and
develop work programs. The Chairs of the Bank and
Fund Working Groups participated in each other's meetings as
observers and there was a regular exchange of
working papers and minutes. The Working Groups subsequently prepared
interim reports to their respective Boards in
September 2000. The Bank Board sent an information note to the Bank
Governors during the 2000 Annual Meetings; the Fund
Executive Board sent an information note to the members of the
International Monetary and Financial Committee
(IMFC) at its September 2000 meeting. The IMFC "noted the work of the
Fund Working Group which is being carried out in
tandem with the Bank Working Group, and further noted that the two
Working Groups will report together." Both Working
Groups met jointly several times and agreed to prepare a draft joint
report for submission to their respective Executive
Directors/Executive Board.
7. The Bank and Fund Working Groups reviewed search
and selection processes at various international institutions,
including the IFIs, and recommend the following
principles with regard to the search for and selection of the Bank
President/Fund Managing Director:
Executive Directors should establish clear
criteria for identifying, nominating, and selecting qualified candidates
for
the posts;
Executive Directors should be informed in a
timely manner regarding candidates, including their credentials and
knowledge of the institution;
there should be a channel for facilitating
smooth communication;
transparency and accountability are critical,
subject to the need to protect the privacy of candidates; and
any decision concerning the selection process
at the Bank and Fund should take into account any impact on the
selection processes at other international
financial institutions.
8. The Bank and Fund Working Groups' recommend that
the process should (a) facilitate assessment of candidates
according to their qualifications, experience and
suitability; and (b) allow for consultation between Executive Directors
and
their authorities and within the Board in order to
facilitate a final selection.
Recommendations on the Selection Policy and Process
I: The Advisory Group and Procedures
9. A selection process commences when the Executive
Directors have been advised that an incumbent is leaving during the
term of office, or when they have agreed to seek
candidates in view of the upcoming conclusion of an incumbent's term. As a
first step, the Executive Directors would decide4:
the qualifications of candidates to be
considered for that selection (refer to paragraph 15);
on the establishment of a small Advisory Group
(AG) to assist the Executive Directors in the selection process, the
composition and size of the AG, and the
procedure for identifying and nominating AG members5;
to establish the AG and agree on the terms of
reference and modalities for the AG, including public disclosure of its
members and terms of reference;
an expeditious timeframe for key steps in the
search process, and procedures to be used in reaching consensus on the
finalists (such as informal consensus or
formal voting).
10. The Bank and Fund Working Groups recommend that
each AG would be structured and operate as follows:
the AG would be composed of eminent persons
familiar with the goals of the institution and drawn from, but not
necessarily restricted to, academia,
diplomacy/international affairs, and international development, banking,
or finance;
the AG would be supported by executive search
expertise, as necessary;
due consideration would be given to geographic
balance in the AG; and
the Dean would serve as an observer in the AG
and act as a liaison to the Board.6
11. The AG would review the qualifications of
potential candidates and provide assessments on them to the Executive
Directors without any formal ranking of the
candidates. Assessments of "high potential" candidates could be
supplemented
with interviews and/or additional background checks,
taking into consideration the need for confidentiality. All candidates
should be reviewed by the AG.
12. Candidates should be nationals of a Member
country, whether or not nominated by Member Governments. The Working
Groups recommend that candidates whose names are not
formally submitted by Governments should have their
Government's support (or non-objection) prior to
being presented to Executive Directors for consideration.
13. At present, the Bank does not have an age limit
for candidates. The Fund's By-Laws state that a candidate is not eligible
for the first appointment to Managing Director after
he/she has reached age 65 and he/she cannot serve past age 70.7 The
Working Groups recommend that there be no age limit
for Bank President/Fund Managing Director. If the Fund Executive
Board concurs with this recommendation, it would be
necessary to submit a resolution to the Governors requesting an
amendment to the By-Laws.
14. The Bank's and Fund's By-Laws8 further state
that the Bank President/Fund Managing Director is appointed for an
initial term of five years that may be renewed at
the discretion of the Executive Directors (Bank)/Executive Board (Fund)
for
the same five years or for shorter periods, with no
limit on the number of extensions9. The Working Groups recommend that
the Bank President/Fund Managing Director normally
should not be expected to serve more than two terms.
15. The Executive Directors may wish to consider
any qualifications (e.g. academic background, experience,
professional/technical background, etc.) prior to
commencing the search and selection process. At the present time, the Fund
Working Group does not see a need for specifying
such qualifications. The September 2000 interim report of the Bank
Working Group included an indicative list of
qualifications10 that Bank Executive Directors may wish to use as a basis
for
discussion when they initiate the search process.
Recommendations on the Selection Policy and Process
II: Executive Directors
16. The Bank and Fund Working Groups recommend that
once the AG has completed its assessments, these assessments
would be circulated to Executive Directors on a
strictly confidential basis. The Executive Directors would consider the
AG's
assessments and agree on an initial shortlist. In
coming up with this list, and any subsequent or final list, of candidates,
the
rules of procedure for the Bank and for the Fund11
provide for ascertaining the sense of the meeting or formal voting, as
necessary, should the Executive Directors decide to
proceed along those lines.12
17. The Executive Directors would consult their
authorities regarding candidates assessed by the AG. A deadline would be
set for the proposal of any new candidates to allow
for assessment by the AG before a final shortlist is agreed by the
Executive Directors.
18. The Executive Directors would decide on a final
shortlist of candidates and on the modalities for public disclosure.
19. Once agreement has been reached by Executive
Directors on a final choice, they would proceed with the formal selection,
consistent with the procedures in each institution.
In the event consensus could not be reached, the Executive Directors could
decide to re-open the search process, drawing from
the AG's list and/or inviting submissions of new candidates.
Appointment
20. The appointment contract for the Bank
President/Fund Managing Director would subsequently be approved by the
Executive Directors/Executive Board.
Recommendation
21. Executive Directors of the Bank and Fund are
therefore requested:
to endorse this report; and
to consider next steps in transmitting the
report, including, in the case of the Fund, transmittal to the IMFC.
1To date, candidates for the Bank's President have
been nominated to the Executive Directors by the U.S. Executive Director,
and have always been
U.S. citizens; in the case of the Fund, until last
year, the candidates for the Managing Director have been nominated to the
Executive Board by
Executive Directors appointed or elected by Western
European countries, and have always been citizens of Western European
countries.
2Please refer to Annex 1 of the Interim Report of
the Bank Working Group, dated September 7, 2000 (R2000-175).
3Such straw polls were also used in the mid-1980s
when the Executive Board was choosing between two EU candidates. 4It is
expected that
meetings concerning the search and selection process
would be in restricted executive session at the Bank and informal session
at the Fund, and
chaired by the Dean of the Board.
5Including the coordinating role in this process of
the Dean or such other Executive Director as may be designated by the
Executive
Directors/Executive Board.
6 In case the Dean could not serve as an observer,
the Board would appoint an Executive Director in his/her place.
7Fund By-Law 14(c).
8Bank By-Law 13(c) and Fund By-Law 14(c).
9In the case of the Fund, the number of extensions
is circumscribed by the applicable age limits.
10Annex 3 of R2000-175.
11The Bank Rules of Procedure for Meetings of the
Executive Directors (Section 4) and the Fund By-Laws Rules and Regulations
(Rule C10).
12For example, Executive Directors could agree to
have successive rounds of consensus or voting in which candidates with the
least support would
be eliminated after each round.
The Chairman's Summing Up Review of Process for
Selection of the President and the Managing Director
Executive Board
Meeting 01/42
April 26,
2001
The Executive Board considered the Draft Joint
Report of the Bank Working Group to Review the Process for Selection of
the President and the Fund Working Group to Review
the Process for Selection of the Managing Director (FO/DIS/01/51,
4/24/01). Executive Directors shared the importance
of the objective of a more transparent and open selection process and
endorsed the Report as guidance for future selection
processes. This endorsement does not constitute a formal decision of the
Executive Board adopting the specific
recommendations in the Report.
The Executive Board further agreed to transmit this
Draft Joint Report to the IMFC for its meeting on April 29, 2001. The
Executive Board further agreed that strict
parallelism with the Bank should be observed.
The Report will be made publicly available during
the Spring 2001 meetings.
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