44138 INDEPENDENTADVISORY BOARD(IAB) FORISSUESRELATING TO THE FUNCTIONINGOFTHE WORLD BANK GROUP'S DEPARTMENTOF INSTITUTIONAL INTEGRITY (INT) TERMS OFREFERENCE Background 1. The World BankGroup is implementinga Governance andAnti-Corruption Strategy (GAC) which outlines a comprehensive approach to addressing issues o f governance that are crucial to the WBG's efforts to promote economic growth and alleviate poverty indeveloping countries. A key element inthe GAC i s the needto maintainprogram integrity inthe WBG's own operations to ensure the effective use of the fimds itdisburses. 2. Inaddressing issuesofprogramintegrity, the Department ofInstitutionalIntegrity (INT) serves as the institutionalfocal point for the investigationandmanagement of allegations o f fraud, corruption, collusion, coercion and obstruction inthe WBG and in WBG-supportedactivities. With a direct reporting line to the President and a concurrent responsibilityto report to the Board o f Executive Directorsthroughthe Audit Committee, INThasbeenmandated to operate "in an atmosphere free o f improper influence or even theperception ofimproper influence" as well as to act "in a fair andprofessional manner" while ensuringthat its "procedures are consistent with externally recognized practices for conducting investigations ininternational organizations". 3. An Independent PanelReview ofINT, chairedby Mr.PaulVolcker, was constituted in2007 to review the work o f INT and to place that work inthe context o f the GAC. Its report o f September 13,2007, set forth a number o f recommendations, including the needfor an IndependentAdvisory Board (IAB)to help protectthe independence and strengthenthe accountability o f INT. Based on the findings o f an internal working group, the Bankhas adopted the recommendations o f the Panel. The following sets forth the Terms o f Reference for the IAB. Objectives 4. The IABhas beenestablished to helpprotect the independence and strengthenthe accountability o f INT. Itprovides advice on INT- related issues to the President, the Audit Committee (on behalfo fthe ExecutiveDirectors) andthe Vice President ofINT. Itis intendedto complement and strengthenexisting governance structures and responsibilities withinthe WBG, including the respective roles o f the Presidentand the Audit Committee, as well as enhancethe credibility of WBGefforts on fighting corruption, both inside and outside the WBG. The IAB i s not intendedto undertake a supervisory or oversight role. Functions 5. The following are the key functionsofthe IAB: Advises onpoliciesandproceduresrelatingto INT inthe carryingout ofits mandatedfunctions anditsinteractionswithinthe WBG, including investigativepolicymattersandissues arisingfrom collaborationacross units, at the request ofthe President, the Audit Committeeor the Vice President of INT; 0 Advises the Presidentandthe Audit Committee, annually, andmore frequently as requested, onthe performanceof INT, includingcaseload, aging of cases, staffing, resources, strategic focus andimpact; and Advises andsubmits reports annuallyto the Presidentandthe Audit Committee onprogressinimplementationofagreedWBG actions onkey recommendationsofthe Volcker Panelreportrelatingto INT'. 6. The IABwill focus on systemic issues. Itis not aninvestigativebodyandwill not beinvolvedinindividualcases, nor is it a vehicle for receivingindividualcomplaints. Organizationand Reporting 7. The IABwill becomprisedofthreewidely-respected individuals.Appointments to the IABwill be for athree-yearterm, with the possibility ofa one-timerenewal. 8. Administrative services for the IABwill beprovidedby staff locatedwithin OPCS. 9. Itis expectedthat the IABwill meetabout three times per year, perhapsmore in the first year, requiringabout upto 20 days per year from each member. 10. The agendafor the initial IABmeetingwill bedeterminedby the President in consultationwiththe Audit Committee. Thereafler, the agendafor each IABmeeting will be determinedbythe IABbasedupon(1) specific requestsmadebythe President, the Audit Committee or the Vice PresidentofINT, and (2) the responsibilitiesspecified inparagraph5 above. 11. All adviceprovidedbythe IABuponrequestofthe President or the Audit Committeewill be sharedwiththe other party, andall adviceprovidedbythe IABupon requestofthe Vice Presidentof INTwill besharedwiththe other two parties. 1The IAB will not advise oncases not involving fraud and corruptiononce they are transferred to the Office o fEthics and Business Conduct. 2 12. The IABwill prepare andsubmit to the Presidentandthe Audit Committee, an annualreporton its work, includingprogressinimplementingthe agreed WBG actions onkey recommendationsof the Volcker Panel, and suchother reportsfromtime to time as requestedby the President or the Audit Committee.IAB annual reports will be publicly disclosed,inaccordancewiththe Bank's Policy onDisclosureofInformation. Other IABreports will bepublicly disclosedon a case-by-casebasis, subject to the approvalofthe ExecutiveDirectors. 13. IABmemberswill meetwiththe President andthe Audit Committeeas requested. Meetingsare expectedto beheldonce or twice per year. Evaluation of the IAB 14. An independentevaluationofthe organization, effectiveness, andcontinued adequacy ofthe mandate ofthe IABwill becarriedout at the directionof the President andthe Audit Committeeprior to the endofthe first three years ofthe IAB. 3 SELECTIONCRITERIAAND PROFILEFOR INDEPENDENTADVISORY BOARD The Independent Advisory Board(IAB) should be diverseinits membership, witha balanced representation from borrowing andnon-borrowing countries, and composed of individuals with strong professional credentials, backgrounds inareas relevant to INT's work and internationalreputation o f outstanding integrity. IAB members as a group would be expected to have prior or current experience inthe following areas: Expertlevel of legaland/or investigative knowledge andexperience in managing a wide range o f corporate, governmental or transnational investigations o f fraud, corruption andmisconduct. Expertlevel of experience inmultilateraldevelopment assistance, including familiarity with international development organizations andpreferablywith experience inprogram andproject delivery. Practical experience inthe management o f sensitive andconfidential information. IABmembers will be selectedbythe President, inconsultation withtheAudit Committee. For a person to be eligible for appointment to the IAB, the World Bank Group must be satisfied that no real or apparent conflict of interest exists betweenthe person andthe interests o f the World Bank Group. Inaddition, IABmembers shall be responsible for avoiding situations and activities that would leadto real or apparent conflicts o f interest, as requiredo f staff by the World Bank's Principles o f Staff Employment, Staff Rulesand Code of Professional Ethics. Inthat regard, IAB members may not currently hold a position withinthe World Bank Group, have beenemployed by or provided services to the World Bank Group withinthe two years immediately preceding their appointment to the IABwith respect to any matter relatingto anINT investigation, or be employed by or provide services to the World Bank Group for the two years immediately following the termination o f their appointment to the IAB.An IABmember shall recuse himself or herselfby withdrawing from attendance andparticipation indeliberations or decision- makingifany project with whichthe IABmember has ever beenassociatedwere to become the subject o f an INT review. 4