Publications

	Table of Contents
p. 52 of 53 BACK | NEXT Executive Summary Summary of Conclusions and Recommendations by ADF Donors ADF VIII: Requests for Midterm Policy Reviews and Reports I. Introduction II. The International Development Goals III. Poverty in Developing Asia IV. ADB and ADF: Vision and Role V. ADB’S Framework for Poverty Reduction VI. Development through Partnership VII. ADF Resources: Portfolio Management and Performance VIII. The Strategy for Implementing ADF VIII IX. Planned Lending in ADF VIII X. Financing Framework for ADF VIII XI. Issues for Policy Review A. Governance Action Plan B. Performance-Based Allocation System for ADF Resources C. Money Laundering D. ADB’s Internal Governance XII. Midterm Review of ADF VIII

ADF VIII Donor's Report: Fighting Poverty in Asia : XI. Issues for Policy Review

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D. ADB’s Internal Governance

127. Donors endorsed ADB’s approach in ensuring good governance in all aspects of project formulation and implementation in DMCs and suggested that the same level of attention be applied to the internal governance of ADB. Donors expect that good governance principles of transparency, accountability, participation and predictability apply to ADB’s own internal governance, and consider them to be relevant to relationships between Management and the Board of Directors, and between Management, senior staff, and staff in ADB. Donors considered it important that the multilateral character of ADB be maintained through more consultative exchange of views between Management and the Board. In this connection, Donors urged Management to review the role of the Board vis-a-vis Management in the exercise of powers allocated to it and the performance of the functions entrusted to it under the Charter. Donors specifically recommended that the Board of Directors should be more closely involved in the process leading to the formulation of the CSP and that the Board of Directors endorse the CSP at a formal meeting of the Board. Donors noted that Management has informed the Board of Directors that it is working on the establishment of a Development Effectiveness Committee, including issues on how to demarcate the role of this Committee, if established, from the Budget Committee and Audit Committee, and also its budget implications. In that context, Donors recommended that a Development Effectiveness Committee of the Board be established.

128. Donors also noted that Management has announced several other initiatives to strengthen further ADB’s internal governance. These include: (i) informal meetings with members of the Board of Directors, on a quarterly basis, to discuss the schedule of Board meetings and work program; (ii) meetings of the Budget Review Committee of the Board of Directors, as needed, to review major undertakings with substantive budget implications, with meetings scheduled at least semi-annually; (iii) examining measures for strengthening OEO; (iv) adoption of a formal Board meeting to endorse the Three-Year Rolling Work Program and Budget Framework paper; (v) examining measures for incorporating evaluation results and Board input into ongoing operations and the Country Operational Strategy and Country Assistance Plan; (vi) establishing the practice of semi-annual retreats, to further strengthen communication between the Board and Management; and (vii) work towards the establishment of a Development Effectiveness Committee. Donors recommended that these initiatives be pursued forcefully and in full consultation with the Board, and that ADB’s management work with the Board of Directors on the implementation of the internal governance reforms that have been identified and on any additional initiatives that may be warranted.

129. Donors noted, with some concern, a paucity of requests for inspection and the absence of instances of the actual inspection approved by the Board of Directors since the establishment of ADB Inspection Function, apart from the Korangi Wastewater Management Project in Pakistan, which was reviewed by the Board Inspection Committee. Although Donors noted that ADB’s two projects co-financed by the World Bank had been subject to the latter’s Inspection Panel’s examination (the Jamuna Bridge Project in Bangladesh and the Arun III Hydroelectric Project in Nepal), they expressed concern about the need for the wider and more effective dissemination of information regarding the Inspection Function. Donors also felt that there is a need for review of procedures for making requests for inspection. In that regard, Donors noted and welcomed that Management plans, in full consultation with the Board of Directors, to strengthen the Inspection Function of ADB. Donors recommended a strengthened and more independent Inspection Function, and the Function should have oversight of private sector projects.

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