The theme of this year’s conference was “Good Governance and Modern International Financial Institutions”. Stilpon presented on Panel 2: Institutional Design and Effective Governance on the topic of “What drives effectiveness in constituency boards: a practitioner’s perspective”.
A summary of his presentation
In contrast to most commercial organisations, international financial institutions (IFIs) and other international stakeholder organisations (ISOs) design their boards of directors as representative platforms of their constituents. The representation imperative, combined with prominent public service elements in IFIs and ISOs, creates additional challenges for the IFI/ISO boards, over and above the ones facing commercial organisations. These challenges are often compounded by low levels of delegation of authority compared to commercial organisations resulting in unusually heavy board workloads that leave little time for traditional commercial board considerations such as long term strategic direction. This paper explores the diverse tools available to address the board effectiveness challenges facing IFI/ISOs. These tools may include carefully designed nomination of appointment procedures, considerations of the size and diversity of boards, committee structure, and processes and procedures related to the board’s functioning. Effectiveness improvements rely not only on change towards best practice but also on proper governance “maintenance”. In this respect, this paper will discuss recent trends in the IFI/ISO world, borrowing board evaluation practices from the commercial sector.