The Board of Executive Directors

Photo left to right: (standing) Robert B. Holland III, Mr. Herwidayatmo, Pietro Veglio, Eckhard Deutscher, Mathias Sinamenye, John Austin, Tom Scholar, Chander Mohan Vasudev, Thorsteinn Ingolfsson, Sid Ahmed Dib, Yahya Abdullah M. Alyahya, Nuno Mota Pinto, Otaviano Canuto, Pierre Duquesne, Paulo F. Gomes, Gino Alzetta, Gobind Ganga, Alexey G. Kvasov, Luis Marti; (seated) Mahdy Ismail Aljazzaf, Zou Jiayi, Jaime Quijandria, Yoshio Okubo, Ad Melkert
© The World Bank

EXECUTIVE DIRECTORS, ALTERNATES, AND COMMITTEE MEMBERSHIP

The Executive Directors are responsible for the conduct of the World Bank's general operations, performing their duties under powers delegated by the Board of Governors. As provided in the Articles of Agreement, 5 of the 24 Executive Directors are appointed by the member countries having the largest number of shares; the rest are elected by the other member countries, which form constituencies in an election process conducted every two years.

Executive Directors consider and decide on IBRD loan and guarantee proposals and IDA credit and guarantee proposals made by the President, and they decide on policies that guide the Bank's general operations. They are also responsible for presenting to the Board of Governors, at the Annual Meetings, an audit of accounts, an administrative budget, and an annual report (this report) on the Bank's operations and policies as well as other matters that, in their judgment, require submission to the Board of Governors. The Board of Executive Directors (the Board) also exercises an important role in shaping Bank policy and its evolution. It is in this role that the Board represents the evolving perspectives of member countries on the role of the Bank Group as well as the Bank's operational experience. In this regard, the Operations Evaluation Department provides independent advice to the Board on the relevance, sustainability, efficiency, and effectiveness of operations. The department is directly accountable to the Board for performing evaluations, as set out in its Board-approved policies, strategies, and work program.

During fiscal 2005 the Executive Directors regularly met at Bank headquarters to carry out their responsibilities, both in formal Board meetings as the Committee of the Whole and in informal meetings. Directors also serve on one or more standing committees: Audit; Budget; Committee on Development Effectiveness; Governance and Administrative Matters (COGAM); and Personnel. With the committees' help, the Board discharges its oversight responsibilities through in-depth examinations of policies and practices, such as the evolution of implementation of the Sarbanes-Oxley corporate governance legislation in the United States; budget reform at the Bank and IFC; the World Bank Group's involvement in extractive industries; strategic staffing and diversity; and strengthening the voice and participation of developing countries and transition economies. COGAM is involved in ongoing discussions on improving the effectiveness of Board activities.

Executive Directors and Alternate Executive Directors periodically visit member countries to review Bank assistance in progress. They meet a wide range of people, including project managers, beneficiaries, and government officials, as well as civil society organizations, the business community, other development partners, financial institutions, and resident Bank staff. In July 2004 Directors visited Angola, South Africa, and Tanzania. In January 2005 they visited Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka. In April 2005 they visited Morocco, Saudi Arabia, and the West Bank and Gaza.

Directors also play an active role in preparing the agenda and issues papers for the semiannual meetings of the joint World Bank–International Monetary Fund (Bank-Fund) Development Committee.

In fiscal 2005 the Development Committee continued to review progress toward achieving the Millennium Development Goals (MDGs) at its discussion of the Global Monitoring Report 2005, Millennium Development Goals: From Consensus to Momentum. The report included a major focus on Sub-Saharan Africa. The Development Committee also reviewed, among others, papers on aid effectiveness and financing modalities; an operational framework for achieving debt sustainability; Bank support of the economic growth agenda, which is based on creating an enabling investment climate and financing infrastructure; leveraging trade for development; prospects for the global economy; and strengthening the voice and participation of developing countries and transition economies in the work and decision making of the Bretton Woods institutions. (See “Development Committee Communiqués, Fiscal 2005 ” in Organizational Information.)

STRATEGIC ISSUES

The major areas of Board emphasis during fiscal 2005 are highlighted below.

Strategic Framework

The Board's work remained closely aligned with the twin pillars of the Bank's strategic framework—promoting a favorable investment climate and empowering poor people. The continued relevance of these priorities, confirmed over the years by a series of medium-term strategy papers, was underscored this year by the Executive Directors. Directors stressed the need for the Bank to intensify its efforts in implementing the framework by sharpening the tools and procedures for meeting the development challenges set forth in the Millennium Development Goals. Directors reviewed a number of progress reports on ongoing efforts at harmonizing operational policies, procedures, and practices among donors; on meeting the needs of low-income countries, including heavily indebted poor countries and low-income countries under stress; and on strengthening partnerships with middle-income countries.

Poverty Reduction

The challenge of meeting the Millennium Development Goals is becoming more and more pressing as the 2015 target date approaches. The Board continued to closely monitor implementation of the Bank's poverty reduction mandate and its contributions toward the goals. The Board discussed papers on the country-owned poverty reduction strategies outlined in Poverty Reduction Strategy Papers (PRSPs). Directors considered 8 PRSPs, 2 interim PRSPs, and 20 PRSP Progress Reports in fiscal 2005, identifying areas where further refinement would be useful. Directors also considered a paper that reviews the effectiveness of Poverty Reduction Strategy Credits, the Bank lending instrument that supports poverty reduction objectives.

Debt and Debt Sustainability

The Board discussed the choice of indicative debt burden thresholds to be used in a framework for analyzing debt sustainability in low-income countries, the interaction of the framework with the Heavily Indebted Poor Countries Initiative, and the modalities for joint debt sustainability analyses by Bank and Fund staff.

Country Programs

Building on PRSPs for low-income countries and national development strategies for middle-income countries, Country Assistance Strategies (CASs) and Country Partnership Strategies capture the essential elements of the Bank's partnerships with member countries. These strategies are the cornerstone of Bank Group work at the country level. During this fiscal year Directors continued to recommend that CASs include more detailed frameworks for measuring results, including intermediate indicators to measure and monitor progress toward medium-term outcomes agreed on by the country, the Bank, and other development partners. Directors emphasized the need for CASs to be more focused and selective and to build on partnerships. They highlighted the importance of linking harmonization and alignment efforts to the results agenda. They also identified the need for the Bank to complement country programs with regional and subregional approaches. The Board reviewed 36 CASs, 10 of which are results-based, during the fiscal year. It continued to monitor the evolving Bank response to the Asian tsunami disaster and to the Interim Program in Iraq.

SECONDMENT PROGRAM

To enhance the voice and participation of developing and transition countries in decision making at the Bank and the Fund, the Executive Directors of the Bank identified a number of capacity-building measures, including the creation of a five-year secondment program for Bank officials from those countries.

Sixteen secondees have been given six-month assignments in operational units at the Bank, with the objective of achieving better communication and knowledge sharing between Executive Directors and their constituencies, with particular attention to Bank procedures, products, and operations.

OVERSIGHT AND FIDUCIARY RESPONSIBILITY

The Board exercises oversight and fiduciary responsibility on behalf of its shareholders, in part through its Audit Committee. The committee revised its terms of reference in 2003 to reflect best practices and continues to remain abreast of evolving standards of corporate oversight, governance, and control issues. The committee advises the Board on financial management and other governance matters to facilitate Board decisions on financial policy and control issues. In particular, the Internal Audit Department and the Department of Institutional Integrity have begun briefing the committee in restricted executive sessions on risk and control issues within their respective purviews.

ADMINISTRATIVE BUDGET

The total administrative expenses for fiscal 2005 were $2,011.3 million, net of reimbursements, and included $172.7 million for the Development Grant Facility. The net administrative expenses of $1,502.2 million represented a 2 percent real increase over the fiscal 2004 budget (a 5 percent nominal increase). In June 2005 the Executive Directors approved a total administrative budget, net of reimbursements, of $2,102.8 million for fiscal 2006.

INSPECTION PANEL

In fiscal 2005 the Inspection Panel received three new Requests for Inspection involving Bank projects in Pakistan (National Drainage Program Project), Burundi (Public Works and Employment Creation Project), and Cambodia (Forest Concession Management and Control Pilot Project). Thirty-six Requests for Inspection have been filed since the panel was established: 11 from Africa, 11 from Latin America and the Caribbean, 10 from South Asia, and 4 from East Asia and Pacific. Of the 36 formal requests received, the Panel has recommended investigations in 18 cases, 6 under the rules that applied before the April 1999 clarifications to the resolution that established the panel, and 12 since those clarifications were adopted. As of May 2005, the panel was conducting 4 investigations.

Requests for Inspection, Management Responses, panel recommendations, panel investigation reports, and management recommendations for projects reviewed this fiscal year can be found atwww.worldbank.org/inspectionpanel.

SELECTION OF A NEW PRESIDENT

On March 31, 2005, the Executive Directors unanimously selected Paul Wolfowitz to become the Bank's tenth president, effective June 1, 2005.