P154468 – Completion Summary Terms of Reference of the RAS Work done Quality control Component 1: Professionalization of Boards of Directors of public banks a) Introduction of two new independent directors. Activities delivered under this component: The quality control was performed by the global The Bank will provide a Technical Note #1  A technical note outlining global good corporate governance team senior experts including (i) a grid of positive and negative criteria practices on the selection procedures, (Alexander Berg, Jean Michel Lobet and Sunita (generic as well as specific ones depending on the nomination criteria and remuneration of Kikeri) and by the Lead F&M staff for Algeria present composition of the Boards of Directors to independent directors of state banks was (Laurent Gonnet). ensure that the technical support improves the delivered. The technical note provided existing skills or those to be improved), (ii) a information on global good practices, selection procedure and (iii) calculation rules for several country examples on the above- levels of remuneration based on objective criteria mentioned topics and also provided a (like the grid, diplomas, field of competence, reform action plan tailored to the number of years of experience etc.). Algerian context. b) Strengthening the training of directors coming Activities delivered under this component: The quality control was performed by the global from the administration. The Bank will provide a Corporate Governance team senior experts (Sunita Technical Note #2 including (i) an assessment of  A comprehensive diagnostic of the skills Kikeri and Jean Michel Lobet). Inputs were also the competence of the present directors, (ii) and competencies available on the board provided by IFC colleagues from the IFC individualized training plans for each director (on of Algerian state banks was performed Corporate Governance team (Sarah Cuttaree). The the basis of training modules proposed by with the support of the Algerian Ministry technical note was also reviewed by the Lead francophone organisms such as the Institut of Finance. F&M staff for Algeria (Laurent Gonnet). Francais des Administrateurs - French Institute of  In addition, a training needs assessment Directors) and (iii) a Directors' charter defining was conducted in order to design a their rights and obligations towards stakeholders training program for board members. (shareholders, depositors, creditors, regulators,  Finally, an international consultant was public). hired to draft the board charters of the Algerian state banks. c) Better dissociation of the roles of oversight and Activities delivered under this component: The quality control was performed by the global management. The Bank will provide a technical corporate governance team senior experts Note #3 including (i) a report on the utility, for the  A technical note outlining global good (Alexander Berg, Jean Michel Lobet and Sunita banks, of separating the roles of Director and practices on the separation of the roles of Kikeri) and by the Lead F&M staff for Algeria Chairman of the Board of Directors, (ii) a list of chairman of the board and CEO, and (Laurent Gonnet). the functions expected of the Chairmen of the selection and remuneration criteria was Boards of Directors of public banks and the prepared. The technical note provided Directors General and their daily operational global good practices, several country duties, (iii) selection and choice criteria for one or examples on the above-mentioned topics some other function, and (iv) the quantity and and also provided a reform action plan nature of information which the Board of Directors tailored to the Algerian context. must receive from the senior management. d) Strengthening the powers of the audit Activities delivered under this component: The quality control was performed by the global committee. The Bank will provide a Technical corporate governance team senior experts Note #4 on the organisation of Audit Committees,  A technical note outlining global good (Alexander Berg, Jean Michel Lobet and Sunita including (i) the choice criteria of the member practices on the benefits, composition, Kikeri) and by the Lead F&M staff for Algeria directors of these Committees, and (ii) a charter selection and remuneration criteria of (Laurent Gonnet). model for the Audit Committees of Algerian audit committees was prepared. public banks and appraisal criteria for Auditors as  In addition, a 2-day training on the role of well as for the selection of those in charge of audit committees was delivered for the internal audits. Furthermore, the Bank (i) will members of the board of directors of organize a workshop on the theme of Audit Algerian state banks. Committees (possibly to be regrouped with the  Finally, an international consultant was workshop on governance committees) and (ii) will hired to draft the charter of the audit provide a 4-day specialized training for the committee of Algerian state banks. members of these Audit Committees (taking into account the banking regulation in terms of internal control). e) Introduction of a Governance Committee Activities delivered under this component: The quality control was performed by the global within the Monitoring and Supervision Cell of corporate governance team senior experts Public Banks - CSSBP- then, eventually, in the  A technical note presenting the different (Alexander Berg, Jean Michel Lobet and Sunita banks' Boards of Directors. The Bank will provide models of state shareholder agencies in Kikeri) and by the Lead F&M staff for Algeria a Technical Note #5 (i) listing the best charge of the oversight of SOEs was (Laurent Gonnet). international practices in terms of Governance prepared. Committees and including, (ii) the list of selection  The note also provided information on the criteria for the members of this committee as well nomination, selection and remuneration as the functions and missions of the said criteria of the members of the governance committee, (iii) proposing a model for the charter sub-committee of the board of directors and the organization of the Governance Committee of state banks. The note also provided a for Algeria (including its composition), (iv) reviewed organizational chart for the state proposing a model for an annual evaluation shareholder agency, the CSSBP, taking programme and tools for these appraisals. into consideration the Algerian realities. Furthermore, the Bank (i) will organize a  In addition, an international consultant workshop on the theme of Governance was hired to draft the charter of the Committees and (ii) will provide a 4-day governance committee of the board of specialized training for the members of this state banks. committee (eventually to be regrouped with the  Finally, a one-day seminar on state workshop on Audit Committees). shareholder agencies of SOEs was delivered to key counterparts of the Ministry of Finance (Direction du Tresor, CSSBP). Component 2: Increasing the autonomy of public banks Activities delivered under this component: The quality control was performed by the global a) Introduction within public banks of mechanisms corporate governance team senior experts (Jean for the elaboration and monitoring of their strategy  Two international consultants with more Michel Lobet), Lead F&M staff for Algeria and their objectives. The Bank will organize a 5- than 30 years of experience in private (Laurent Gonnet), and two international day training seminar for 6 public banks as well as banking sector were hired to design and consultants (Ken Dorph and Guillaume Almeras). for the senior staff of the unit in charge of the deliver a 5-day seminar on bank strategy monitoring and oversight of public banks (the for the senior management of Algerian CSSBP). The new Algerian Institute of Directors state banks. The training covered all the could participate in this seminar. Practical tools aspects of the bank strategy (product will be used during the seminar and will be left for development, strengths/weaknesses of the the participants to be used later. The Bank will banks, risk management, governance and support the CSSBP in the implementation of a role of the state as the major shareholder pilot exercise for a first public bank. of banks). The training was complemented with an individual half day practical strategy-related exercise. b) Preparing the introduction in the stock exchange Activities delivered under this component: The quality control was performed by the global of one or two public banks between 2015 and corporate governance team senior experts 2016. The Bank will provide a Technical Note  An international consultant with expertise (Alexander Berg, Jean Michel Lobet and Sunita evaluating (i) the legal and technical environment on partial privatization of SOEs was hired Kikeri), a Financial Systems Senior Advisor of a possible introduction, (ii) the percentage of to conduct a study assessing the readiness (Roberto Rocha) and Lead F&M staff for Algeria the capital which could be introduced, (iii) the of 2 state banks for partial privatization (Laurent Gonnet). modalities of shares transfer to the wider public and also to conduct a diagnostic of the (through OPCVM –UCITS- for example), (iv) readiness of all the stakeholder appetite of the market, (v) capacity of the bank(s) institutions in the value chain: central to respond to the requirements of the rules bank, stock exchange, securities governing the monitoring of capital markets, (vi) regulator, central depository and the monitoring the transactions of shares and (vii) the shareholder unit of the ministry of representation conditions of minority shareholders finance. The deliverable was presented to at the Boards of Directors. the client in the form of a technical note. Component 3: professionalization of the Unit in charge of the monitoring and oversight of public banks – the CSSBP. a) Extending the field of competence of the present Activities delivered under this component: The quality control was performed by the global CSSBP. The Bank will provide a Technical Note corporate governance team senior experts including (i) an evaluation of the present  A comprehensive diagnostic of the entity (Alexander Berg and Jean Michel Lobet), and by functioning of the CSSBP, (ii) a description of the in charge of exercising the ownership the Lead F&M staff for Algeria (Laurent Gonnet). functions to be added, in view of international rights over state banks in Algeria, the good practices, (iii) a model, for Algeria, of an CSSBP, was conducted. The technical organisational chart, internal rules and regulations note also provided a reform action plan to of procedure (through a "score card" for example) reform the CSSBP to ensure it complies including a codification of decisions which can be with global good practices in terms of approved by the Boards of Directors, those under SOE ownership entities. the authority of the Chairman, of the CSSBP or  In addition, a half day workshop was those to be submitted to the Minister of Finance. delivered to discuss with project counterparts the reform action plan, potential reform strategies, and lessons learned from other jurisdictions. b) Strengthening the training of the CSSBP Activities delivered under this component: The quality control was performed by the global members. The Bank will provide a Technical Note corporate governance team senior experts including (i) an assessment of the skills of the  A diagnostic study of the skills and (Alexander Berg, Jean Michel Lobet, Sunita present senior staff within the CSSBP, (ii) competencies available at the CSSBP and Kikeri), and by the Lead F&M staff for Algeria individualized training plans for each senior staff a training needs assessment was (Laurent Gonnet). of the CSSBP, including the monitoring of conducted. modernization plans. The Bank will organize a  In addition, the WBG organized a 4-day study trip to the Agence des Participations de l'Etat training for the staff of the CSSBP. The - APE - (State Shares Agency) in France (or its training covered different topics including equivalent in a francophone country). Finally the corporate governance, audit, risk Bank will provide additional training (maximum management, bank strategy and board of 10 days) for the CSSBP staff in relationship simulations. with these new missions.  Finally, the WBG facilitated a rapprochement between the CSSBP and the French SOE ownership agency, the Agence des Participations de l’Etat. A study tour that will be organized directly the Algerian Ministry of Finance will take place during the first half of 2017