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p. 28 of 95 BACK | NEXT Message from the Chairman of the Board of Directors Members, Capital Stock and Voting Power The Record Abbreviations 2004 in Review: Board of Directors' Report Special Theme: The Changing Face of the Microfinance Industry: Building Financial Systems for the Poor Part 1: Institutional Effectiveness Managing for Development Results Accountability Knowledge Management Achieving Development Impact Human Resources and Budget Administration Part 2: Poverty Reduction Part 3: Financial Statements: Management's Discussion and Analysis

Annual Report 2004

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Part 1: Institutional Effectiveness

ADB made significant progress in 2004 in its efforts to maximize the effectiveness of its products, services, outcomes, operations, and resources. The recommendations in the review of the poverty reduction strategy (PRS) were instrumental in formulating the Reform Agenda adopted in June that sets out 19 interrelated initiatives that together will make ADB more responsive, accountable, and effective. Mainstreaming managing for development results (MfDR) throughout ADB operations is a high priority. The accountability mechanism adopted at the end of 2003 became fully operational and provides a venue and process for people or groups who perceive themselves as adversely affected by ADB-assisted projects or who allege noncompliance with ADB policies and procedures to voice their grievances and seek redress.

The knowledge management framework set out a structure and time frame for making ADB an effective knowledge bank as well as a development bank. To that end, capacity development was added as a fifth thematic priority. To enhance ADB'scredibility and to achieve greater development impact, the Operations Evaluation Department (OED) began reporting to the Board of Directors through the Development Effectiveness Committee (DEC), and for the first time, the Board appointed the Director General of OED on the recommendation of the committee and the President.

The President approved the new human resource (HR) strategy following external independent studies, internal assessments, and consultations with the Board of Directors, Management, and staff. The new strategy supports ADB's Long-Term Strategic Framework 2001–2015 (LTSF), PRS, MfDR, the knowledge management framework, and the new information systems and technology strategy (ISTS II). It identifies 20 actions some of which are ready for implementation.

The Board of Directors approved two major special capital budget projects to improve security and renovate headquarters. The security projects—including application of shatter-resistant film, protection of outside air intake for the air-conditioning system, and fencing—started in mid-2004 and are expected to be completed in 2006.

The Business Continuity Management Working Group led by the Office of Administrative Services (OAS) and assisted by external consultants began work on a strategy to mitigate risks to business operations and to reduce their impact by timely responses to disruptions in procedures. The review of new business processes completed in the first half of 2004 made recommendations for improving efficiency and quality assurance. ADB also continued to form and strengthen partnerships with nongovernment organizations (NGOs) and with other multilateral development banks (MDBs) and agencies.

• Performance-Based Allocation of Asian Development Fund Resources

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