Global Agenda Council on Institutional Governance Systems Effective Leadership in International Organizations April 2015 © World Economic Forum 2014 - All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system. The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum. REF 211014 Contents 5 Executive Summary 6 1. The Effective Leadership Project 6 a. Global Governance in the 21st Century 6 b. Why Focus on Leadership? 7 c. Constrained Leadership 7 d. How Are “Effective Leadership Structures” Measured? 8 e. Methods for Assessing Organizations 8 f. Who Is Responsible for Delivering Effective Leadership Structures? 8 g. The Objectives of the Study 10 2. Emerging Good Practices 11 a. Selecting and Re-Electing Leadership on Merit 11 b. Managing Performance 11 c. Setting and Evaluating Ethical Standards 12 d. Developing and Retaining Talent 12 e. Setting Strategic Priorities 13 f. Engaging with a Wide Range of Stakeholders 13 g. Evaluating Independently and Effectively 14 3. Appendix: Leadership Practices 14 a. African Development Bank Group 19 b. Asian Development Bank 24 c. European Bank for Reconstruction and Development 28 d. Inter-American Development Bank 32 e. International Monetary Fund 38 f. International Organization for Migration 42 g. United Nations Development Programme 45 h. United Nations High Commissioner for Refugees 50 i. World Bank Group 58 j. World Health Organization 60 k. World Trade Organization 66 References Evaluation of Organizational Structures that Enable Effective Leadership 3 Project Team Xue Lan, Dean, School of Public Policy and Management, Tsinghua University, People’s Republic of China Ngaire Woods, Project Leader; Dean, Blavatnik School of Yu Keping, Director and Professor, China Center for Global Government, University of Oxford, United Kingdom, dean@ Governance and Development, People’s Republic of China bsg.ox.ac.uk Zhang Haibin, Professor, School of International Studies, Shubhra Saxena Kabra, Council Manager, Global Agenda Peking University, People’s Republic of China Councils, World Economic Forum, shubhra.saxena@ weforum.org Acknowledgements Nina Hall, Fellow in Global Governance, Hertie School of Governance, Germany, [email protected] The authors are particularly grateful to the World Economic Yulia Taranova, Researcher, Blavatnik School of Forum for providing inspiration and supporting this project, Government, University of Oxford, United Kingdom, yulia. and the academic advisers, current and former officials who [email protected] have helped along the way. Conversations with several Miles Kellerman, Researcher, Department of Politics leaders, who provided insights into the challenges faced and International Relations, University of Oxford, United by leaders of international organizations, were particularly Kingdom, [email protected] inspiring, including those with Pascal Lamy, Gus Speth, Hugo Batten, Associate, McKinsey & Company, Australia, Takehiko Nakao, Helen Clark, Suma Chakrabati and Donald [email protected] Kaberuka. Members of the Global Agenda Council on Sincere thanks go to the many officials from the Institutional Governance Systems following organizations who answered questions: African Development Bank (AfDB), Asian Development Ernesto Zedillo Ponce de Leon, Chair; Director, Yale Bank (ADB), European Bank for Reconstruction and Center for the Study of Globalization, Yale University, USA Development (EBRD), Inter-American Development Bank Robert C. Orr, Vice-Chair; Assistant Secretary-General for (IDB), International Monetary Fund (IMF), International Strategic Planning, United Nations, New York Organization for Migration (IOM), Organization for Economic Cyrus Ardalan, Vice-Chairman and Head, UK and EU Co-operation and Development (OECD), Multilateral Public Policy and Government Relations, Barclays, United Organisation Performance Assessment Network (MOPAN), Kingdom United Nations Development Programme (UNDP), United Ann M. Florini, Professor, School of Social Sciences, Nations High Commissioner for Refugees (UNHCR), Singapore Management University, Singapore World Bank, World Health Organization (WHO) and World David Kennedy, Director, Institute for Global Law and Trade Organization (WTO). The authors would like to Policy, Harvard Law School, USA thank the following current and former officials from these Pascal Lamy, Chair (2012-2013); Honorary President, organizations: Bjorn Gillsater, Brian Gleeson, Kazu Sakai, Notre Europe - Jacques Delors Institute, France Margret Thalwitz, Inge Kaul and Max Watson. Jeffrey D. Lewis, Director, Economic Policy, Debt and Trade Department, Poverty Reduction and Economic A number of academic experts generously offered their Management Network, World Bank, Washington DC insights and feedback, which made this study possible: Lin Jianhai, Secretary, International Monetary Fund, Michael Barnett (George Washington University), Sam Daws Washington DC (University of Oxford), Carolyn Deere Birkbeck (University of Emmanuel E. Mbi, First Vice-President and Chief Operating Oxford), Michael Doyle (Columbia University), Tana Johnson Officer, African Development Bank, Tunisia (Duke University), Jérôme Elie (Graduate Institute), Martha Riyad Abdulrahman Al Mubarak, Chairman, Abu Dhabi Finnemore (George Washington University), Guy Goodwin- Accountability Authority, United Arab Emirates Gill (University of Oxford), Jane McAdam (University of New Arunma Oteh, Director-General, Securities and Exchange South Wales), Craig Murphy (University of Massachusetts, Commission, Nigeria Boston), Catherine Weavers (University of Texas, Austin), Katharina Pistor, Michael I. Sovern Professor of Law, and James Vreeland (Georgetown University). Columbia Law School, USA Qu Bo, Associate Professor and Deputy Director, China Finally, the authors thank the Blavatnik School of Foreign Affairs University, People’s Republic of China Government, University of Oxford, United Kingdom, and Gabriela I. Ramos Patiño, Chief-of-Staff and OECD G20 the Hertie School of Governance, Germany, for providing Sherpa, Organisation for Economic Co-operation and research support for this report. Development (OECD), Paris Nasser Saidi, President, Saidi & Associates, United Arab Emirates Jan Sturesson, Global Leader, Government and Public Services and Partner, PwC, Sweden Ngaire Woods, Vice-Chair (2012-2013); Dean, Blavatnik School of Government, University of Oxford, United Kingdom 4 Effective Leadership in International Organizations Executive Summary Good leadership in international organizations is necessary, but not sufficient, for their success. Structures supporting leadership vary enormously across global agencies. This report highlights some of the best practices across 11 organizations that facilitate good leadership. It also underscores that international institutions could learn from each other’s practices across seven domains: (1) selecting and re-electing leadership on merit, (2) managing performance, (3) setting and evaluating ethical standards, (4) developing and retaining talent, (5) setting strategic priorities, (6) engaging with a wide range of stakeholders, and (7) evaluating independently and effectively. Evaluation of Organizational Structures that Enable Effective Leadership 5 1. The Effective Leadership Project a. Global Governance in the 21st Century b. Why Focus on Leadership? Effective leadership in international agencies is crucial: the Over the last two decades, the world has suffered from a world relies on these organizations to ease cooperation global governance deficit. This deficit comprises a lack of – whether in ensuring pandemics are constrained, mail is the following: delivered to foreign countries, or citizens can fly safely to other countries. – Adequate mechanisms to deal with issues of international peace and security To be effective, agencies need leaders who can identify – Satisfactory mechanisms to anticipate and counter and deliver on organizational goals without the constraint global economic shocks of undue influence, by individual members or other – Effective instruments to ensure important global public stakeholders. Yet, some IOs have not even defined the goods, not least in critical areas such as climate change leader’s role, let alone recruited or managed that person and public health on the basis of particular knowledge, competence and experience required to effectively lead the organization. In the early 2000s, it was expected that the international In addition, democratic election processes and strong community would embark on a comprehensive effort to accountability mechanisms are necessary to ensure that overhaul the multilateral system, with renewed rules and the interests of executive management are aligned with the institutions to address the challenges posed by evolving organization. geopolitical and economic circumstances. These ambitions included reform of World Bank and IMF governance; While good leadership is not enough for successful creation of a new world environmental institution; and international cooperation, it is necessary for effective ongoing attempts at United Nations (UN) Security Council governance. However, leadership performance in reform. Recent history suggests, however, that such a organizations is often buried behind arguments about which