Multilateral Development Banks by Ihsan Ugur Delikanli Todor Dimitrov & Roena Agolli

Author:Ihsan Ugur Delikanli, Todor Dimitrov & Roena Agolli
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

Board of Directors

BoD represents the governance layer between BoG and management, combining some oversight and executive roles. While all powers are vested at the BoG, most of them are actually delegated to the BoD.

The main BoD role is to ensure that the MDB is properly governed along the BoG-approved multilateral provisions of the establishing agreements. BoD guides and oversees executive management and independent control functions. It approves key policies on operational matters such as lending, recruitment, and so on, as well as supports the role and meetings of the BoG. Virtually any BoG issue is first addressed at the BoD as all fundamental BoG decisions are preceded by a BoD elaboration.

The members of BoDs are usually appointed upon nomination or election by shareholder countries. BoD members in the global and regional MDBs (except CEDB and EIB ) are nominated by a group of countries due to the high number of shareholders (and a limited number of Directors). While many Directors represent a group of shareholder countries in these MDBs, some countries are directly represented (by either appointed or elected members), reflecting their higher voting powers and status stipulated in the respective establishing agreements. Others are elected by a group of countries assembled according to either regional similarities or borrowing/non-borrowing status or voting power.

At IBRD , IFC, and IDA (International Development Association), there are individual country-appointed Executive Directors for each of the five largest shareholders (United States, Japan, Germany, France, and United Kingdom). The rest of countries are grouped into constituencies, each represented by an elected Director. The Executive Directors of IBRD serve ex-officio to the Boards at IDA and IFC.

BoDs usually take decisions by consensus, rarely involving actual voting. However, the relative voting power of individual directors is a key mind factor when they contemplate whether or not to support a project or policy. This makes them inherent opinion leaders and power brokers. Typically, if there is a lack of a sufficient support for a project, its discussion is postponed rather than involving a divisive vote, triggering behind-closed-doors negotiations.

In contrast to group representations in global and regional MDBs, sub-regional MDBs have direct Board representation of the member countries (every member country has a director and is able to express its own opinion/vote).

As illustrated by Table 4.3, one BoD member represents approximately ten countries in the global MDBs, four to seven countries in the regional ones, and one single country in sub-regional MDBs. In the relatively smaller sub-regional MDBs, Boards are clearly more operational and inclusive, as allowed by their moderate size.Table 4.3Composition of Board of Directors

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