Howard Davies on the Wolfowitz debacle

The Wolfowitz saga has once again underlined the need for fundamental reform in the way the heads of international institutions are chosen. The rights and wrongs of his interventions in his girlfriend's employment are near impenetrable now. But it is crsytal clear that most of the Bank's Board feel and felt no sense of ownership of their President. And why should they? He was foisted on them as the personal choice of George Bush, an electorate of one.

by Howard Davies
Last Updated: 31 Aug 2010

Now Bush has to find a replacement, yet after this debacle he almost certainly can't appoint anyone he really wants. So Wolfowitz's replacement may well have no strong constituency of support at all.
This is a hopeless situation for the top post in a vital institution. Surely it would be possible to devise a better method.
Why not appoint a high-level; nominating committee, chaired by an American by all means, to conduct a global search and make a recommendation to the Bank's Board? Someone like Paul Volcker or Alan Greenspan would be ideal, working with a European or two, an Asian and an African - Kofi Annan maybe.They could make a recommendation to the Board, on whivch the US could have a veto, if they really want one. Then whoever was chosen would have clear backing from the Board with which she is, in any event, obliged to work closely.
This kind of arrangement works well for major companies and commercial banks. The World Bank (and indeed the IMF where the same problem could emerge) are  important enough to need a best practice corporate governance framework - especially as they  lecture developing couintries on their governance."

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