The Board of Executive Directors

From left to right: (standing) Gino Alzetta, Zou Jiayi, Marcel Massé, Paulo F. Gomes, Jakub Karnowski, Jaime Quijandria, Mulu Ketsela, Dhanendra Kumar, Yoshio Okubo, Sid Ahmed Dib, Pierre Duquesne, Joong-Kyung Choi, Jennifer Dorn, Herwidayatmo, Mahdy Ismail Aljazzaf, Abdulrahman M. Almofadhi, Biagio Bossone; (seated) Otaviano Canuto, Thorsteinn Ingolfsson, Eckhard Deutscher, Alexey G.Kvasov, Jan Willem van der Kaaij, Tom Scholar. Not pictured: Luis Marti.
© World Bank

EXECUTIVE DIRECTORS, ALTERNATES, AND COMMITTEE MEMBERSHIP

The Executive Directors are responsible for the conduct of the World Bank's general operations, performing 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, grant, and guarantee proposals made by the President. Directors exercise an important role in shaping Bank policy and its evolution. In this capacity, they represent the evolving perspectives of member countries on the World Bank Group and its operations. The Executive Directors are responsible for presenting to the Board of Governors, at the Annual Meetings, audited 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) meets regularly at Bank headquarters in Washington, DC. Directors serve on one or more standing committees: Audit, Budget, Development Effectiveness, Governance and Administrative Matters, and Personnel. With the committees’ help, the Board discharges its oversight responsibilities through in-depth examinations of policies and practices. Committees are not empowered to make decisions for the entire Board. The Independent Evaluation Group, formerly the Operations Evaluation Department, provides independent assessments to the Board on the relevance, sustainability, efficiency, and effectiveness of operations. The group is directly accountable to the Board. (See www.worldbank.org/boards and www.worldbank.org/ieg for more information.)

In fiscal 2006, the Board approved measures to improve its effectiveness and ensure earlier Board input into the Bank’s decision making. Key measures include the introduction of a quarterly strategic review of the Board’s work program, a scheduling process, and a tool to track policy issues. Steps to improve Board efficiency include changes to and clarification of procedures and guidelines for conducting meetings and for preparing and submitting documents for consideration. These measures are at different stages of implementation. The result has been an increased focus on outcomes and greater selectivity in issues discussed by Board committees. Additional steps being taken include developing a handbook on Board rules and procedures, defining a sanctions framework for violations of rules and procedures, and establishing a time frame for reviewing the implementation status of recommendations.

The Board works closely with the International Monetary Fund (IMF) through the Bank-Fund Development Committee. Directors play an active role in preparing agendas and issues papers for the Development Committee’s semiannual meetings. Following the 2006 Spring Meetings, the Development Committee highlighted the need to promote good governance (including fighting corruption) and mutual accountability.

In fiscal 2006, the Board considered papers and reports on aid effectiveness, progress on the Doha Development Round of trade talks, the Bank’s Africa Action Plan, implementation issues surrounding debt relief and implications for IDA, and implementation issues surrounding the status of the Heavily Indebted Poor Countries (HIPC) Initiative. The Board also noted the creation of the External Review Committee, which is tasked with reviewing Bank-Fund collaboration.

To assess project implementation firsthand, Directors traveled to Grenada, Guatemala, and Peru (November 2005); the Central African Republic, Gabon, and The Gambia (March 2006); and the Russian Federation (May 2006). They met with a wide range of stakeholders, including project managers, beneficiaries, government officials, representatives of civil society organizations and the private sector, other development partners, financial institutions, and resident mission Bank staff members.

STRATEGIC ISSUES

The major areas of Board emphasis during fiscal 2006 are highlighted below.

Strategic Framework

The Board’s work continued to follow closely the twin pillars of the Bank’s strategic framework: supporting the creation of a favorable investment climate and empowering poor people. The range of interventions include support for sound governance, sustainable development, inclusive delivery of social services, improved infrastructure, private sector development, and job creation. The Executive Directors reaffirmed the need for selectivity in the Bank’s work and called for greater collaboration with development partners. The Executive Directors endorsed the Africa Action Plan and its 25 specific initiatives to be undertaken by the Bank’s Africa region during the implementation period for the 14th Replenishment of IDA. Other issues discussed by the Board focused on progress in harmonizing operational policies, procedures, and practices among donors; progress in implementing the Paris Declaration, which outlines enhanced aid effectiveness through mechanisms aimed at a stronger focus on results; meeting the needs of low-income countries, including HIPCs and fragile states; and strengthening partnerships with middle-income countries.

Poverty Reduction

The Board continued to monitor implementation of the Bank’s poverty reduction mandate and its contributions toward attaining the Millennium Development Goals. The Board reviewed 10 Poverty Reduction Strategy (PRS) Papers and 20 PRS Progress Reports in fiscal 2006, and it identified areas for further refinement. The Board also discussed several other papers designed to strengthen the Bank’s role in poverty reduction, including the efficacy of PRSs and the effectiveness of poverty reduction strategy credits, a Bank lending instrument that supports poverty reduction objectives.

Debt Relief

In March 2006, the Board approved the Multilateral Debt Relief Initiative (MDRI), which provides debt relief to countries that reach their completion points under the HIPC Initiative. The MDRI went into effect on July 1, 2006. The Board also discussed several joint Bank-Fund papers in support of debt relief, including one on the status of the implementation of the HIPC Initiative and another addressing IDA’s implementation of the MDRI, including the so-called free-rider problem. In fiscal 2006, the Board also reviewed one HIPC completion point document. (See www.worldbank.org/debt and Addressing Worldwide Poverty.)

Country Programs

Country assistance strategies (CASs), country partnership strategies, and the Bank’s policies with respect to low-income countries under stress, postconflict countries, and middle-income countries continued to guide the Bank Group’s work. During the year, the Board reviewed 31 CASs and other CAS products. Executive Directors commended the greater emphasis on poverty reduction as the overarching goal of the results agenda detailed in these strategy documents. To this end, Executive Directors welcomed the mainstreaming of the CAS completion report reviews, which for the first time provided systematic evaluation of CAS results. The Board supported the Bank’s efforts to move toward assistance strategies developed by IBRD, IDA, IFC, and MIGA. It also supported increased partnerships with other development partners.

OVERSIGHT AND FIDUCIARY RESPONSIBILITY

The Board exercises oversight and fiduciary responsibilities, in part through its Audit Committee. The Audit Committee has a mandate to assist the Board in overseeing and making decisions regarding the World Bank Group’s financial condition, its risk management and assessment processes, the adequacy of its governance and controls, and its reporting and accounting policies and procedures.

ADMINISTRATIVE BUDGET

The total administrative budget for fiscal 2006, reviewed by the Budget Committee and approved by the Executive Directors, was $2,102.8 million, net of reimbursements, including $171.9 million for the Development Grant Facility. The net administrative budget of $1,543.3 million represented a zero percent real increase over the fiscal 2005 budget (a 3 percent nominal increase). In June 2006, the Executive Directors approved a total administrative budget, net of reimbursements, of $2,118.6 million for fiscal 2007.

INSPECTION PANEL

The Inspection Panel received 4 requests for inspection involving Bank projects in Honduras (Land Management Project), Nigeria (West African Gas Pipeline Project), Romania (Mine Closure and Social Protection), and the Democratic Republic of Congo (Transitional Support for Economic Recovery Credit and Emergency Economic and Social Reunification Support Project). Since the panel’s establishment, 40 requests for inspection have been received: 13 from Africa, 12 from Latin America, 10 from South Asia, 4 from East Asia and Pacific, and 1 from Eastern Europe. Of the 40 requests, 35 were registered and the panel has recommended investigations in 20 cases, 6 under the rules that applied before the April 1999 clarifications to the resolution that established the panel, and 14 since those clarifications were adopted. As of June 2006, the panel was conducting 2 investigations.

The Inspection Panel provides a vehicle for private citizens, especially poor people, to bring claims to the World Bank’s Board of Executive Directors, who then decide, on the recommendation of the panel, whether an investigation will take place. The process for addressing claims has empowered and given voice to people who may have been affected adversely by Bank-financed projects.

Requests for inspection, management responses, panel recommendations, panel investigation reports, and management recommendations for projects reviewed this fiscal year can be found at www.worldbank.org/inspectionpanel.