4.1 Governance
4.2 Leadership
4.3 Organization and Structure
4.4 Finance and Administration
Overview: The history of IFPRI serves as a useful illustration of the value of good governance. For the period during the late 1980s - when IFPRI appeared to have a strong staff, good programmes, and stable finances - the Board's job was perceived to be relatively easy, entailing little more than enjoying the collegiality of the group, applauding achievement, and providing advice when asked. When crises occurred in the late 1980s and early 1990s, the Board was charged with finding solutions. To do this, it had to reassert itself, clarify its responsibilities, and rethink its composition and structure. To become a body with both the responsibility and the capacity to provide accountability, it had to re-establish its role as a governing body rather than an advisory body.
As of 1998, the IFPRI Board has the focus and the working habits of a strong governing body. Having worked since 1990 assiduously to come to a clear understanding of its role in the organization, the Board is conscious of its need to sustain organizational accountability and maintain its independence by carefully differentiating its role from that of Management. This consciousness is matched by that of the Director General, who acknowledges and supports the role of the Board.
The strengths of the Board are manifold. Its members are highly accomplished professionals whose reputations in their spheres of work enhance the credibility of IFPRI, and their work on the Board is attentive and engaged. Attendance at Board meetings is strong, preparation is taken seriously, and members feel free to engage the DG, the staff, and each other in serious and challenging discussions.
Approach: The Panel adopted the following four criteria against which to measure the Board's performance as the governing body of the Institute:
- Hiring and evaluating the Director General,
- Setting strategies and Institute-wide policies and monitoring their implementation,
- Fiscal oversight, and
- Board structure and operations.
Hiring and Evaluating the Director General: The Board identified and hired the current DG in 1992 after a thorough search, and it recently renewed his contract. This in itself is an expression of the Board's confidence in the person at the helm of the Institute. The DG's performance is assessed annually by the Board and forms the basis for decisions respecting both his tenure and remuneration The Board genuinely appreciates the DG's ability and respects his and his staffs accomplishments. The DG is careful in his relationship with the Board to avoid usurping their prerogatives.
Setting Strategy and Policy and Monitoring Implementation: Within the CGIAR System the boards are expected to guide the centres by clarifying their vision, setting strategies to accomplish that vision, approving institute-wide policies, and monitoring their implementation. However, the boards depend entirely on each centre's management for analyses and proposals in these areas and for information about progress toward achieving of agreed-upon objectives, This dependence on management for information and analyses can easily turn a board into a "rubber-stamping" body. To avoid this, a board needs to be actively engaged in the shaping of the centre's vision and strategy, even if there is no fundamental difference between the views of the board and management. Lack of participation in the articulation of fundamental principles and institutional directions encourages passivity on the part of a board, reduces ownership, and limits the potential of board members in their advocacy and resource-development activities.
When a board, such as that of IFPRI, is composed of prominent individuals with enormous talent, experience, and diverse backgrounds, every minute of the board's time is a precious resource that should be used carefully to add the most value to the performance of the body it governs. A key area in which such a board can greatly contribute is in the formulation or review of the vision and strategy of the centre. Now that the necessary framework and mechanisms for the reorganization and reinvigoration of IFPRI are in place, the Panel believes that the IFPRI Board will be able to devote more time to fundamental issues of major importance to the future and long-term directions of the Institute.
Fiscal Oversight: Fiscal oversight is a principal responsibility of the Executive and Finance Committee, which takes its task seriously. The quality of this Committee's work is very high. In recent years the Committee's chairs have all been highly regarded and competent individuals who have led with rigour. For instance, at the February 1997 meeting, the Committee thoroughly discussed the selection of the auditor.
The Board meets once a year, with a second meeting every third year. The Board should consider holding two full meetings per year. Alternatively, and to balance the need for timeliness with the requirements of accountability, the Chair might consider the use of small ad hoc task forces assigned to work with the DG on time-sensitive issues to broaden participation in decision-making between Board meetings.
The Panel suggests that the Board review the adequacy of its current number of meetings.
Board Structure and Operations: The process of identifying and recruiting new Board members is exemplary. The Nominating Committee has been able to identify a strong set of potential candidates. The Committee is careful to view the Board's composition strategically and to recruit for diversity of all kinds, including the professional backgrounds of potential board members. As a result, the Board is comprised of men and women who represent a cross-section of ages and geographic areas, and includes people with backgrounds and perspectives of increasing importance to IFPRI.
The Panel makes the following observations on the Board's structure and operations:
· The Panel has already stressed in this document the need for more frequent meetings of the Board. This obviously would tax the members, the staff, and the budget. But the awkward truth is that a Board primarily fulfils its responsibilities when it meets. By creating committees and task forces, a board is only delegating work, not relinquishing responsibility or accountability.· IFPRI is fortunate in that it currently functions in a manner that does not demand much attention from its Board, but a board loses some of the habits of good governance unless it is given opportunities to reinforce and practice them.
· On a related note, the agenda for the February 1997 Executive and Finance Committee meeting that preceded the Board meeting almost wholly overlapped that of the full Board. Some members of the full Board justly complained about revisiting decisions that had already been made. This Committee should rethink the agenda for its meetings, and clarify whether its job is to approve proposals or make recommendations to the full Board.
· The work of IFPRI's Board is immeasurably enhanced by the level of staff support available to it. The assignment of a competent staff person as secretary to the Board has enabled the Board to receive the kind of information and attention it needs.
The Board has not assessed its own functions and operations since the overhaul of governance in 1990-91. As the membership of the Board is completely new since that time, and as IFPRI is gearing up for new challenges in the millenium, a self-assessment would be in order.
The Panel suggests that the Board conduct a self-assessment of its role and operations.
The DG of IFPRI has been at the helm of the Institute since 1992. His vision, leadership, and participatory management style have been instrumental in contributing to the successful growth of the Institute. His intellectual leadership and vision led to the development of the highly acclaimed and well-received 2020 Vision Initiative. He has selected and maintained able staff and has managed the Institute in an open fashion, with due regard to the need for control of resources and programme quality.
The quality of the DG's leadership is reflected in several ways throughout the Institute, including the development of appropriate and effective management systems for both the programme and administration divisions; in delegation to and sharing of responsibilities with directors, unit heads, and staff; in the creation of task forces and committees to foster team building and team work; and through the introduction of incentive structures.
Table 4.1 Members of the IFPRI Board of Trustees
IFPRI is organized along functional lines with four programme divisions, an outreach division, and a finance and administration division (Figure 4.1). Each division is headed by a director. These six directors, along with the DG, constitute the Senior Management Team (SMT).
Since its formation in 1992, the SMT's operating effectiveness and decision-making procedures continue to evolve and improve. The SMT has become a much more cohesive, coherent management team, which benefits the whole institution. The decision-making and management procedures have become more transparent and participatory. This decentralized yet tightly co-ordinated management style has provided the flexibility that allows IFPRI to implement its research and outreach activities more effectively and efficiently.
The management of the Institute's staff and resources is decentralized, with authority and responsibility delegated to directors, unit heads, senior researchers, and project leaders.
Co-ordinating mechanisms include committees, task forces, teamwork, and clearly delineated roles and responsibilities, along with associated incentive programmes. Fund raising is also decentralized, with the bulk of restricted fund raising being delegated to directors and research scientists, whereas unrestricted fund-raising tends to remain a function of the DG's office.
One of the key organizational issues is time management, characterized as time "famine" within the Institute, and its associated impact on staff morale. However, this and most other organizational culture issues are not unique to IFPRI. In fact, they are shared by universities and other research institutes.
To address the problems of time famine and staff morale, IFPRI Management initiated an Organizational Strengthening Programme (OSP) in 1996 with a general objective to review programmatic goals, activities, and organizational issues. At the time of this review, the OSP was quite advanced. Several of the recommendations that have emerged, have already been implemented.
The Panel strongly supports the initiative taken by IFPRI to address organizational culture issues, but also notes that a great deal of time and energy are being spent by IFPRI on this and similar exercises and they all involve extensive and comprehensive consultations involving staff at all levels.
4.4.1 Finance
4.4.2 Human Resources
4.4.3 Computer Services
4.4.4 Administrative Services
Since 1992, IFPRI's Finance and Administration Division has undergone a number of changes that have both improved the functions of its units and, at times, affected its ability to operate at an optimal level. During 1995-1996, several senior staff from this division left the Institute for various reasons. These staffing shortfalls left the units strained and unable to provide consistently high levels of service. However, the Division is rebuilding and the services it provides are improving. Its new director, hired in 1997, is making the provision of enhanced services to the research and outreach staff his top priority. The Chief Financial Officer (CFO), appointed in late 1996, is reassessing the roles and responsibilities of her staff to strengthen the functioning of the Finance Unit. The new head of Human Resources, appointed in mid 1997, is focusing on rebuilding her staff in order to enhance responsiveness to staffs human resource concerns, on simplifying IFPRI's personnel manual, and on improving services to outposted staff. Computer Services has benefited from a much more stable staffing situation with the same unit head for several years.
In the Panel's opinion, the Division is now well structured and has adequate, competent staff to serve the needs of its internal and external clients.
Figure 4.1: IFPRI Organizational Chart
Growth/Funding: From 1992 through 1996 IFPRI's financial health improved considerably and funding increased by an average of 25 percent. By the end of 1997 it will have increased by nearly 40 percent over 1992. This increase is largely attributable to growth in the number of donors from 32 in 1992 to 43 in 1997. IFPRI believes that its growth will level off at roughly US$ 19 million in 1998, a level which it feels is manageable, given its current programmes and human resources (See Figure 4.2).
The proportion of restricted to unrestricted funding has increased slightly over the same time period, with the ratio levelling off at roughly even in 1997. This ratio is somewhat typical of the current trend within the CG System.
Operating Reserves: Based on draft 1997 financial statements, IFPRI's operating reserve (formerly called working capital) currently exceeds US$ 2.4 million (an increase from US$ 0.280 million in 1992) and represents 65 percent of total unrestricted net assets. This operating reserve is equivalent to approximately 50 days' worth of operating expenses. It is important to note that cash assets (cash and short-term investments), although subject to seasonal fluctuation, are in excess of the operating reserve. IFPRI has not had to resort to short-term borrowing to fund its operations since 1993. The Panel considers the operating reserve to be prudently managed.
Overhead Costs: Budgeted indirect costs at IFPRI are 40 percent for headquarters and 20 percent for offsite activities. The Institute has an aggressive policy in which all restricted projects are budgeted on a full-cost-recovery basis. Thus, costs such as staff time, travel, and others related to restricted projects are allocated on a charge-back basis, and proposals to donors are fully costed out with direct and indirect costs clearly defined. This practice compares favourably with those of other Centres within the CG System. This approach clearly identifies any decision to co-finance restricted grants with unrestricted funding. The CFO has set as a priority the overall review of the Institute's cost accounting structure with the objective of identifying any indirect costs that can be more causally related to direct project costs. Funding proposals to donors are also carefully reviewed by the Finance and Administration Division, and the DG signs off on them before they are sent out. The Panel endorses this practice of charge-backs.
Management of Funds: IFPRI's investment guidelines were approved by the Board of Trustees in December 1994 and govern the investment of in-hand funds above one month's operating expenses; the guidelines encourage low-risk investments with no more than 10 percent of the financial portfolio in obligations of any one issuer, other than money market funds, government agencies, and repurchase agreements, and are therefore consistent with prudent cash-management practices.
Figure 4.2 IFPRI's Unrestricted and Restricted Support for 1990-1998
Audit Function: IFPRI does not have an internal audit unit, in large part because its operation is relatively small. It does not own its offices, nor does it have laboratories, housing and training facilities, or other infrastructural facilities typically found in international centres. It discharges the internal audit function through a series of periodic test audits conducted by external auditors. The current external auditing firm, KPMG Peat Marwick, conducted a test audit in late 1997. No major issues were highlighted, but several recommendations were made. Most of these were accepted by Management and the Board and are being implemented.
It is the Panel's view that the audit function receives sufficient attention by the Board. After examining the auditor's reports and meeting with the auditors, the Panel also concluded that the audit functions were adequately performed at IFPRI and that there were no major issues of concern.
Travel Costs: Travel costs represent a significant proportion of the Institute's overall budget - 10 percent in 1996. The CGIAR average for the same year was 7 percent, with the highest Centre at 13 percent and the lowest at 5 percent. The Panel queried the appearance that travel costs are higher at IFPRI. The principal reason given was that the Institute does most of its research offsite in developing countries (contrary to most other Centres, which have onsite research facilities). In addition, a higher percentage of costs associated with travel tends to be a function of the size of a Centre's budget: the larger the Centre, the lower the percentage. It should be noted that in 1996, 63 percent of total travel costs were direct charges to restricted projects. The Panel reviewed the Institute's travel policy and found it to be clear and well enforced, with the bulk of travel being done by the most economical means. A fare audit recently commissioned by the Travel Task Force revealed that over a two-month period between 1 June and 31 July 1997, 37 out of 40 fares were offered by the Institute's travel agency at the best fare available.
In the Panel's view the travel policy and procedures of the Institute are appropriate.
Staff Composition and Balance: Staff composition and balance was highlighted in the preceding EPMRs, and it is an area in which the Board and Management of IFPRI have made significant attempts to correct imbalances.
The number of IFPRI staff has grown 23 percent, from 112 in 1992 to 138, in 1997, A downward trend was reversed in 1994 and the number of staff has grown each year since then. IFPRI has also improved the gender balance of its senior staff, largely through a concerted effort to increase the number of women in its applicant pool. In 1992, approximately 8 percent of the applicants for senior positions at IFPRI were women. By 1997, this number had jumped dramatically to approximately 47 percent, double the rate of all other Centres. As a result, women comprised 15 percent of the senior research staff in 1992 and over 25 percent by December 1997 (See Table 4.2).
The Panel benefitted from a special study commissioned by IFPRI 'Gender and Workplace Issues at IFPRI'. In its findings, it was reported that 43 percent of the senior administrative staff in 1992 were women, and by the end of 1997 this figure had risen to 80 percent. Data from a study funded by the CGIAR Gender Programme show that the percentage of CIFOR's and IFPRI's internationally recruited staff that are women are about the same (25 percent), well above all other CGIAR Centres.
IFPRI is striving to increase the number of senior staff from developing countries, as the ratio between developing and developed countries has not improved since 1992. Table 4.3 shows the current distribution of staff by nationality and country of origin.
The Institute's senior management can be improved in terms of gender and nationality balance. Currently, the SMT consists of five directors and the DG, all of whom are male, and four of whom are from the North. One position is currently vacant, that of the director of the Outreach Programme. Recruitment to fill this position is underway.
Recruitment: Recruitment policies and procedures are well designed and generally consistent with those in other CG Centres. All international positions are filled through a highly competitive process, with due regard to international balance and gender. The direct-hire approach is seldom used, but when it is, carefully controlled procedures and processes are followed.
International recruitment is a lengthy process, taking six to ten months to complete. Some positions attract large numbers of candidates, which accounts in part for the length of time required to complete the process. For example, the position of director of Finance and Administration attracted 250 applicants; the director of the Outreach Division attracted 160, and the Information Programme head position attracted 150. The numbers for other internationally recruited staff- such as research and postdoctoral fellows - are not as dramatic: applicants ranged from 14 to 25 for the period from January 1996 to June 1997.
The Institute believes that the length of the recruitment process continues to be a problem and will consider it within the framework of the Organizational Strengthening Programme mentioned earlier.
The attrition rate at IFPRI is reasonable. It averaged 15 percent over the past three years, with approximately one quarter of the departing staff coming from the ranks of the internationally-recruited.
Classification: The Institute's classification system is consistent with that used by comparable institutions in the United States It is regularly reviewed and updated as required, with appropriate benchmarking to ensure its relevance and competitiveness. The classification system appears to adequately meet the needs of internationally recruited staff, at least based on the Institute's ability to attract and retain staff.
Compensation: The Institute's compensation system is maintained and updated annually to ensure both local and international market competitiveness. Comprehensive salary surveys are conducted annually to establish a proper basis of comparison against other employers in the Washington, D.C. area and the international market. The Institute attempts to maintain itself in the better employer category within the D.C. market, and its benefits package is better than that of most local institutions. However, its allowance structure is not entirely comparable to that of other CG Centres, as IFPRI staff are not paid housing and other allowances.
It is the view of the Panel that the compensation package offered by IFPRI is adequate to attract and retain high quality staff.
Performance Appraisal: IFPRI has a useful performance appraisal system with guidelines that are concise and to the point for different staff groupings. Currently, the Institute is examining the possibility of introducing a multisource feedback system (360 degree) of performance appraisal. This more complex system could provide an additional tool to monitor skills and achievements in areas such as collaboration and teamwork, communication with internal staff and collaborators, participation in training activities, and supervision of staff, all areas which were identified as issues to be addressed in the organizational strengthening effort described earlier.
However, in view of the additional burden this kind of system puts on all concerned, along with additional time needed for each appraisal, IFPRI should carefully weigh the benefits and the costs. As two other Centres are interested in testing such a system, IFPRI should compare notes with them before making a final decision on this issue.
Personnel Policies and Procedures: IFPRI revised and expanded its personnel manual in 1992. Now all policies, rules, regulations, and procedures for the Institute are combined into one comprehensive document. New policies approved by Management are first distributed electronically to staff. In addition, general policies, such as the full array of benefits to which employees are entitled, are described in more detail in a series of booklets available to all staff. The Personnel Manual will soon be put on the internal local area network.
Table 4.2: IFPRI Staff by Gender (Salaried and Hourly1 Staff Members) December 31, 1997
Table 4.3: IFPRI STAFF BY NATIONALITY (Salary and Hourly Staff Members) As of December 31, 1997
|
Country of Nationality |
Senior Staff |
Support Staff |
Total Staff |
|
Argentina |
0 |
2 |
2 |
|
Australia |
2 |
1 |
3 |
|
Bangladesh |
2 |
0 |
2 |
|
Belgium |
1 |
0 |
1 |
|
Canada |
4 |
2 |
6 |
|
China |
1 |
0 |
1 |
|
Denmark |
1 |
1 |
2 |
|
Egypt |
0 |
1 |
1 |
|
Ethiopia |
0 |
2 |
2 |
|
France |
2 |
1 |
3 |
|
Germany |
1 |
2 |
3 |
|
Honduras |
0 |
1 |
1 |
|
Hong Kong |
0 |
1 |
1 |
|
India |
4 |
2 |
6 |
|
Italy |
2 |
0 |
2 |
|
Japan |
1 |
1 |
2 |
|
Kenya |
1 |
0 |
1 |
|
Lebanon |
1 |
0 |
1 |
|
Malaysia |
0 |
1 |
1 |
|
Nepal |
0 |
2 |
2 |
|
Netherlands |
0 |
1 |
1 |
|
Pakistan |
0 |
2 |
2 |
|
Philippines |
2 |
12 |
14 |
|
Senegal |
2 |
0 |
2 |
|
Sweden |
1 |
0 |
1 |
|
Tunisia |
1 |
0 |
1 |
|
United Kingdom |
4 |
2 |
6 |
|
U.S.A. |
24 |
44 |
68 |
|
Total |
57 |
81 |
138 |
The Institute's Conflict of Interest Policy is incorporated into the Board Handbook and the Personnel Manual. The DG has the ultimate responsibility for its application and enforcement, although the Head of Human Resources generally serves as the first contact point. The DG reports to the Board on conflict-of-interest issues as necessary. In addition, the Chair of the Board is responsible for the enforcement of the policy among the membership of the Board.
A policy area requiring improvement is that of personnel matters of outposted staff. Staff interviewed during the course of this review expressed the view that their briefing was not as complete as expected. More important, the Panel noted that conditions and benefits tend to vary between individuals, depending on the location of their assignments (national institutes versus sister CG Centres, for example) and the existence or lack of country agreements.
The Panel suggests that IFPRI develop more standardized policies and procedures with respect to outposting, including the negotiating of country agreements.
The computer services unit continues to provide state-of-the-art equipment and software for IFPRI staff in order to enhance the Institute's food policy research capabilities and results. In 1993, IFPRI converted from stand-alone computers to a fully networked system, allowing staff to share files and communicate through an electronic mail system. The new electronic mail system has further facilitated IFPRI's ability to communicate and collaborate both inside and outside the Institute. The Institute owns its computer equipment and is not considering leasing arrangements at this time.
Computer equipment is replaced on a regular basis, with new equipment assigned to programme staff, and older, less powerful equipment assigned to persons who do not need the same level of capacity for their everyday needs. Thus, the effective life of computers is extended, which tends to be more cost-effective.
All staff currently have access to Institute-wide information files, accessible through the computer network. However, IFPRI has no comprehensive strategy for managing its administrative information. Most information collected or distributed by staff is stored in inconsistent and unstructured formats that are difficult to use and extract. These problems were identified by Management as part of the OSP and are being addressed in the following ways by computer services:
· a management information system is being developed as a priority with a target completion date of May 1998;· support is being given to the finance unit to develop and upgrade the management reporting capability of the financial system; and
· it is intended to extend the use of the microsoft outlook-exchange programme to gradually improve the management of administrative data.
The Panel supports the Institute's initiatives to enhance its management information systems.
The Administrative Services Unit is relatively small and low cost, at least in comparison to those of other Centres with larger infrastructures. The only issue of note at this time is that of the forthcoming move of IFPRI in May 1998 to another building in the Washington, D.C. area. The move is precipitated in large part by the increasingly unacceptable physical climate within the building (air flow and quality, poor heating and ventilation, poor space expansion prospects, and so forth). The reasons for this move, along with the associated costs and implications, were reviewed and approved by the Board of Trustees at meetings in 1996 and 1997. During these deliberations, the Board also considered the possibility of a move to an overseas location, but decided to defer any action on it.
Though there are costs associated with terminating the current lease prematurely, these will be offset largely by the more favourable conditions of the new lease which will make the long-term cost per square foot over the life of the lease roughly equivalent to current costs, with the added advantage of more state-of-the-art facilities with expansion potential. The Panel is satisfied that the move has been carefully considered by both Management and the Board.
