Washington, DC: Ensuring the highest standards of institutional governance and data and analytical integrity is paramount to the International Monetary Fund's (IMF) ability to deliver on its mandate and its capacity to serve its member countries in an effective, evenhanded, and impartial manner. The IMF's Executive Board is fully committed to maintaining these standards, and in concluding its review of the matters raised in the investigation of the 2018 World Bank's Doing Business report in October 2021, the Executive Board noted that it had "confidence in the impartiality and analytical excellence of IMF staff and in the IMF's robust and effective channels for complaint, dissent, and accountability". The Board also noted that it would consider "possible additional steps to ensure the strength of institutional safeguards" in these areas[1]. Accordingly, it launched a comprehensive review of the IMF's institutional safeguards[2], with the aim of ensuring that the Fund's systems reflect a robust governance structure which meets the highest standards.
Reflecting shared responsibilities of key stakeholders in the process, the review was carried out in an integrated manner, with the Board establishing a Steering Group (SG) of Executive Directors leading the assessment in collaboration with Fund Management and two Staff Working Groups (WGs), which were comprised of staff from all levels. One WG focused on the integrity of data and analysis, and the other focused on issues of internal governance and staff voice and included representatives of the Staff Association Committee. The Independent Evaluation Office also provided input. In addition, an external, independent panel of high-level experts, led by former Deutsche Bundesbank President Jens Weidmann, was appointed to assess a critical mechanism to foster staff voice-the Fund's internal dispute resolution system (DRS).
The institutional safeguards review looked at the Fund's framework and practices to ensure data and analytical integrity, examining the procedures for finalizing staff analysis (including internal clearance points and Board engagement)-as well as the availability and effectiveness of channels for staff to voice concerns. The review considered the Fund's work environment and culture, its ability to foster dialogue and a robust exchange of views internally and with country authorities, and mechanisms to raise and resolve differences. While the Fund has engaged in efforts in the past to upgrade and modernize its internal safeguard systems, this was the first comprehensive and holistic review, in which both complementary pillars of the safeguards system- processes for data and analysis and the DRS-were assessed simultaneously.
The findings of the review show that the Fund generally has robust mechanisms in place to ensure a high standard of institutional governance and analytical integrity, along with well- developed mechanisms to help IMF members prepare robust data. The review also demonstrated that the Fund has in place a dispute resolution system "comparable to the practices and procedures in other benchmarked international organizations" and provides "multiple formal and informal mechanisms" for employees to express their workplace concerns. These findings are encouraging and reinforce the Executive Board's and Management's strong confidence in the impartiality and analytical excellence of IMF staff and in the IMF's robust and effective channels for complaint, dissent, and accountability. This outcome is a testament to the current and past work of Fund staff, managers, Management, and the Board.
At the same time, the review found-drawing upon surveys, interviews with staff and stakeholders, and a review of best practices-that there are areas where the data and analytical integrity frameworks could be further bolstered and in which the smooth and effective functioning of the Fund's system for internal disputes could be strengthened, including by speeding up, and enhancing trust in the processes. More specifically, the review found that:
- While there are strong frameworks and processes in place to protect the integrity of data and analysis, the Board and Management agree that the system should be bolstered further by clarifying the terms of engagement of Offices of Executive Directors in staff's conduct of analysis, improving the transparency of internal processes, clarifying the role of management in the clearance process, and identifying principles for evenhanded coverage of emerging economic policy areas.
- On internal governance and staff voice, actions to enhance trust in the DRS and its functioning are needed. These include measures to ensure voices are heard by fostering informal resolution of disagreements at an early stage, and addressing long and overly formal processes and resource and information gaps. These actions would enhance trust in the DRS and its functioning. More broadly, credible and accountable efforts are needed to ensure that an appropriate and visible tone is set from the top on these issues, and to foster greater dialogue and enhance the Fund's organizational culture, which is still perceived as overly hierarchical. The Board and Management agree that improvements can be made in four key areas: leadership and tone at the top; building trust in the DRS; earlier, less formal, and more collaborative dispute resolution; and fair and efficient formal dispute resolution processes.
The Board and Management strongly welcome the review's analysis and underscore the importance of its findings. The review provides a clear diagnosis of the current gaps in the system and a guide for further modernization through strengthening safeguards on internal governance, staff voice, and data and analytical integrity. The institutional safeguards review process does not end with the publication of these reports. The Board and Management are committed to considering all of the recommendations laid out in the reports and taking concrete actions in a timely, well-sequenced manner to ensure that the best possible frameworks, processes and culture are in place at the IMF. In this context, determined implementation and operationalization of these recommendations will be key to affecting meaningful change to our organization and institutional safeguards. This is a broad-ranging set of reforms, which will require a stepwise and considered approach, taking into account views of all stakeholders.
In that vein, Board and Management have identified several key areas on which work can commence swiftly, in close consultation with staff:
- On data and analysis integrity , the Board supports calls to clarify the terms of engagement between OED and staff/management, including through a timely review of the Transparency Policy, recognizing that Executive Directors often play a dual role in that they are officials of the Fund and at the same time represent the views of the member countries which have elected them. Work on this exercise can start quickly, though it will be important to give time for considered consultations with OEDs, staff and Management. Management also supports enhancing the transparency and documentation of internal review processes; clarifying the role of Management in the clearance of staff reports; and establishing mechanisms to help ensure evenhanded coverage of emerging areas.
- On internal governance and staff voice , the Board and Management agree that demonstrably setting tone at the top is essential to guiding and supporting change. We also recommend investing additional effort and resources that will expand trust in the DRS and address fears of retaliation by making it more transparent (while protecting confidentiality), more efficient, more accountable, and more focused on opportunities for earlier and less formal resolution of disputes. We also commit to continued monitoring of progress in these areas through regular staff engagement and timely sentiment surveys. Specific actions here which will be advanced in the near term include:
- Taking additional steps during internal investigations to ensure protection against retaliation for those who come forward with claims and/or complaints, including more proactive consideration of interim protective measures and greater coordination between the DRS processes for protecting whistleblowers and for establishing individual accountability for misconduct.
- Reviewing the ethical frameworks applicable to the Board and Management and thereafter proposing changes as needed, to ensure that these reflect the highest standards of ethical conduct, befitting the Fund's status; and that the mechanisms for compliance and accountability are robust.
- Introduce measures to promote greater transparency of the important work of the Board's Ethics Committee.
- Reviewing existing frameworks to enable the publication of summary statements of financial assets and interests by the MD and DMDs, in line with the best practices in other international financial institutions, in time for the next annual disclosure program.
- Taking steps to expand the access of OED employees to the Fund's informal dispute-resolution mechanisms.
- Broadening of the terms of reference of both the Ombudsperson and the Mediator to include dealing with allegations of undue influence by Management or the Board on Staff, at least until other mechanisms are in place.
- Establishing a process for regular engagement between the Heads of the DRS Offices and the Managing Director, with an annual report to the Board.
- Developing a Fund-wide communication plan to raise awareness of: (i) the mechanisms available for staff to raise concerns, including around issues of undue influence; and (ii) the existing protections for protection from retaliation where these mechanisms are pursued.
Beyond these immediate steps, the Board and Management commit to further work to determine how best to implement a comprehensive set of measures and policy changes which represent significant institutional, structural, and cultural change, and may also require additional changes in staffing and/or financial resources. Management and the Board will develop an action plan over the next six months-by the end of the calendar year-to show how more comprehensive implementation will proceed. The plan will be developed in close consultation with staff and will carefully consider all of the reports' recommendations, as well as the immediate actions described above. It will include timelines, responsibilities, and staff and budget resources needed, along with how outcomes will be monitored, assessed and reviewed, and an explanation where recommendations may not be feasible or practical.
The Executive Board and Management underscore our commitment to ensuring data and analytical integrity and fostering an inclusive working environment which supports all staff in serving the IMF's member countries in an effective, evenhanded, and impartial manner.
