Who should be ADB’s next chief?

In the past few years, the World Bank and International Monetary Fund have seen major changes in leadership.

Korean-American physician Jim Yong Kim became the first from outside the worlds of politics and finance to lead the World Bank. Former French minister Christine Lagarde became the first woman to take the reins of the IMF.

While Europe and the United States retained their grip on the top positions at both institutions, the selection processes and discussions were more open than ever before.

And so too must Asia’s leading development bank think differently about how the supposedly best-qualified candidates are chosen to staff, manage and lead.

It has been a long-running tradition at the ADB that its president is chosen from the ranks of former high-ranking Japanese Ministry of Finance officials, or others with close ties to the ministry.

Other ADB member nations have not put up nominees, knowing the Japanese choice would simply take their place in a carefully planned Japanese succession plan.

It is time, however, for the bank to rethink the means of sourcing its next set of leaders, if it is to remain relevant to a region that is evolving faster than it is.

My perpetual hope is that the “search” for the next ADB president — preordained as its outcome might be — will lead to a successful candidate that will do more to hold the institution’s management accountable for shortcomings, not just in terms of development results, but also in such areas as staff retention and the recruitment of qualified women.

The successful candidate

Change and evolution should be less about nationality and gender, and more about an approach to development and management that places more emphasis on people, on planet and on partnership — what I used to refer to as the “3 Ps of responsible development” during my time on the ADB board of directors.

That is, development that focuses on the poorest and most in need in Asia’s least developed nations, as well as on the people within ADB; development that seeks to strike a better balance between near-term development needs and longer-term sustainability of resources; and development that is done in increasing partnership, not just with other development banks, but also with civil society and the private sector.

Sometimes it is difficult — but not impossible — to grasp and act on this when one has spent one’s entire career in a government bureaucracy.

Ideally, the most qualified candidate should be one who has been exposed to not just senior-level government counterparts, but also to civil society and the private sector.

This candidate could well be non-Japanese or female, but need not be.

A trickle-down effect

Having nationality as a primary factor for choosing the bank’s leaders trickles down to its rank and file.

As one example, cynics often point out that an exhaustive search for the “best qualified” candidate always seems to end up with some of the most important ADB functions — particularly budget, personnel and management systems — being run by a bureaucrat from Japan.

This has contributed — perhaps unfairly — to some resentment toward Japanese leadership at the ADB.

As I and other followers of the international financial institutions have noted on many occasions, all ADB staff should be recruited, chosen and promoted transparently and through a merit-based process.

Nationality-based hiring or promotion is constraining and potentially damaging in the long run to employee retention and morale.

A test case for the next president of the ADB, is whether any of this will change.

Will the next director-general of the ADB’s budget, personnel and management systems department, for example, be another bureaucrat from the Japanese Ministry of Finance after the “search” for the most qualified candidate is concluded?

Best practices in organizational structures also suggests that, structurally, budget and human resources departments are split, due to the different skill sets demanded of leadership, and given an equal voice at the management table. This is not the case at the ADB, with a Ministry of Finance bureaucrat typically overseeing both budget and human resources.

A dynamic, different kind of leader — regardless of nationality and gender — might recognize this and take action to split the functions and conduct a true search for those experienced in managing people of many nationalities.

Indeed, this leader could be a boost to ADB and to Japan’s hold on the institution’s presidency — particularly in the face of China’s continued rise and possible challenge to Japan.

The Chinese challenge

It was interesting that just after Haruhiko Kuroda announced his resignation, emails and rumors were flying around. And once again China, unwittingly or not, seemed to be playing the villain.

“I read somewhere […] that China will be angling to put one of its own as head of the ADB,” declared one person. “This would be a disaster! They will be using the ADB as a bully pulpit besides [for] other nefarious mechanisms. Help fight it!”

Given ongoing tensions between an increasingly assertive China and many of its neighbors, one can understand the emotions and concerns. On more than one occasion, my Chinese counterpart on the ADB board of directors had asked me if I thought the institution would ever have a Chinese ADB president.

China, after all, is now the second largest economy in the world, having taken that position from Japan in 2010. Yet, while being the third largest shareholder in the ADB, China remains as one of bank’s largest borrowers.

So while any Chinese bid for the ADB presidency is likely to fail, given present shareholding, a Chinese challenge could well spark much-needed discussion for a future change.

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