IMF Exploration of Governance Could Touch on Transparency

24 September 2008

The International Monetary Fund has launched a high-level examination of its own governance, a topic also probed earlier this year by an internal evaluation unit that recommended many reforms, including greater transparency.

 The report by the IMF’s Independent Evaluation Office (IEO) makes a variety of suggestions for greater transparency by the Executive Board, along with numerous other structural proposals. The April report also shines a light on the workings of the board. 

In specific, the IEO report suggests that the standard length of time before board documents are made publicly available should be set at two years. 

 It says that the current criteria to classify documents as “strictly confidential” and “secret’ should be reviewed and made public. In addition, “criteria should be made public for the declassification of `strictly confidential’ and `secret’ documents, according to Section 82 of the report, which advocates greater use of the Internet to facilitate access to archival materials.

 Among the transparency-relevant observations about board processes, the IEO noted that the “Summing Up’ documents about board meetings, not publicly available, are widely considered internally to be vague.  The report did not suggest that more documents be released, but urged that the meaning of “code words” be made clearer to the public, presumably when refle3cted in documents that are released, such as Public Information Notices. 

The report documents a substantial increase in the numbers of written statements submitted by directors in advance of meetings, so-called “grays,” which are not disclosed. Since 1990, the number of grays has grown about 400 percent, and number 4,000 a year. This phenomenon has reduced meeting time, the report says, also reflecting the belief by some that their proliferation has not added to quality of decisions and may have decreased attendance.

 Among its other findings, the IEO draws attention to the “lack of clarity” on the respective roles various governance bodies, “and in particular between the board and management.” Further, is said the IMF needs “more systematic ministerial involvement.” The board itself, “is hindered by excessive focus on executive, rather than supervisory, functions,” according to the report.

 The IEO included several transparency-related topics in its August list of possible future studies, on which it sought pubic comment.

 One proposed evaluation “would examine the role and effectiveness of the IMF in contributing to greater [transparency and Accountability] in member countries, through such efforts as standard-setting, assessment of the observance of standards and codes, publication policy for country documents, and communications strategy.”  The IEO also suggested that it might look at the IMF’s involvement in national governance issues generally.

 In addition, the IEO suggested: “For many years now, the modus operandi of the IMF has been gradually shifting from reliance on confidential peer review to greater use of transparency as a way to strengthen policy accountability. An evaluation could examine the effectiveness, efficiency, and impact of this shift in the Fund’s transparency policy, including the impact on the quality of surveillance.”

The new blue-ribbon panel on governance issues is supposed to report back by next April.

It is headed by South African Finance Minister Trevor Manuel and also includes: Michel Camdessus, former Managing Director of the IMF; Kenneth Dam, Max Pam Professor at the University of Chicago; Mohamed El-Erian, co-CEO and co-CIO of Pacific Investment Management Co.; Sri Mulyani Indrawati, Minister of Finance of Indonesia; Guillermo Ortíz, Governor of the Bank of Mexico; Robert Rubin, Senior Counselor at Citigroup; and Amartya Sen, Lamont University Professor at Harvard University.

Managing Director Dominique Strauss-Kahn announced the appointment of the  committee Sept. 14, asking it to assess “the adequacy of the Fund’s current framework for decision making and advise on any modifications that might enable the institution to fulfill its global mandate more effectively,” according to a press release.

The IMF in January delayed for a year, until 2009, a planned review of its disclosure policies.

By Toby McIntosh

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Filed under: IFTI Watch


In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
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