## _021412 - 1.      This paper presents a forward-looking management implementation plan (MIP)

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---

### Overview and purpose
- Presents a forward-looking management implementation plan (MIP) responding to the IEO evaluation.
- Addresses Board-endorsed IEO recommendations and proposes broader implementation ideas where the Board saw merit in the IEO’s general approach.
- Builds on the 2011 Triennial Surveillance Review (TSR) and incorporates TSR action-plan elements to make surveillance more effective, candid, and evenhanded.
- Establishes monitoring mechanisms:
  - an update on surveillance agenda progress to be considered by the Board at the end of 2012;
  - issues not covered in the TSR to be monitored through future Periodic Monitoring Reports (PMRs).

### IEO findings and Board reactions
- Directors “concurred with the general thrust of the IEO evaluation and recommendations.”
- Board noted reforms already undertaken that will help enhance candor and traction: early warning exercise, vulnerability exercise for advanced economies, inputs into the G20 Mutual Assessment Process, integration of WEO-GFSR messages, mandatory financial stability assessments for systemic countries, and cross-country and spillover reports.
- The Evaluation made five general recommendations:
  - Create an environment that encourages candor and diverse/dissenting views;
  - Strengthen incentives to “speak truth to power”;
  - Better integrate financial sector issues into macroeconomic assessments;
  - Overcome silo behavior and mentality;
  - Deliver clear, consistent messages to the membership on the global outlook and risks.
- Directors noted some IEO specific recommendations required further analysis to make them actionable within competing work program priorities and budgetary constraints, and emphasized tackling internal culture and institutional values directly.

### Implementation plan — A. Create an environment that encourages candor and diverse/dissenting views
- IEO recommended creation of “a risk assessment unit that reports directly to Management, with the purpose of developing risk scenarios for the systemically important countries and analyzing tail risks for the global economy.”
- Management response:
  - The Board did not support creating a new risk assessment unit due to overlap with other initiatives; the TSR emphasized improving processes to focus on risks and transmission channels.
  - Three TSR actions agreed (addressing the IEO concern):
    - Starting with the April 2012 issue, WEOs will pay greater attention to risks around the baseline;
    - The review process is being modified so relevant analyses and findings from the vulnerability and early warning exercises, the WEO, the Fiscal Monitor, and the GFSR will be taken up in policy discussions with country authorities; the tools underlying multilateral surveillance will be disseminated to area departments to support this effort;
    - The upcoming revised surveillance guidance note will stress the need for an explicit discussion of risks in Article IV consultations, potentially supported by risk assessment matrices in Article IV reports akin to those used in financial sector stability assessments.
- Staffing diversity and expertise actions:
  - Recruit a higher proportion of midcareer economists with substantial policy experience: 72 percent in 2010, up from 59 percent in 2005;
  - Hire more staff with financial sector experience and experts with fiscal and debt policy skills, doubling the number of hires with such skills in recent years;
  - Increase support for training and secondments to sharpen staff knowledge of financial markets.
  - Progress updates to be provided to the Board annually by HRD; the next such update is expected in July 2012.
- Career development and mobility for financial sector experts:
  - Enhancements for A14 staff to be folded into the staff survey action plan; a Management working group established to consider reforms supporting career development for financial sector experts, including broadening promotion criteria for A15/B1, enriching job content, and enhancing mobility.
- Summings Up and minority views:
  - Actions to better reflect minority views in Summings Up; a Working Group of Executive Directors (supported by staff and perhaps an external consultant) will clarify purposes of Summings Up and seek Board endorsement of proposed changes in the coming months.
  - “Main Themes in Grays” now highlights “Issues for discussions” (country matters) or “Remaining Diverging Views” (policy matters) to surface differing views ahead of Board discussions.
- External perspectives:
  - External views have been sought for policy discussions where appropriate (e.g., external experts for the TSR, External Advisory Group input, external advisors for the Review of Conditionality).
  - TSR ideas for more external involvement (ex-post assessments, minority views in Article IVs, web debates) were noted but not taken further at this time by the Board.

### Implementation plan — B. Strengthen incentives to “speak truth to power”
- IEO recommendation: “Management should encourage staff to ask probing questions and challenge Management’s views and those of country authorities.”
- TSR findings:
  - Views on candor are mixed; surveillance may err on the side of caution.
  - Surveys for the TSR found few mission chiefs reporting pressure from members to temper positions, though some reported instances of pressure from large advanced and emerging economies.
- Measures to increase candor:
  - The review process will ensure country papers report on implementation of past advice given in Article IVs and key FSAP recommendations to help address lack of follow-up that could signal lack of candor or consistency in policy advice.
- Organization-wide self-assessments:
  - A Fund-wide action plan responding to the staff survey was rolled out in October 2011.
  - Survey participation: more than 2,000 staff participated in December 2010 and January 2011, a response rate of over 70 percent.
  - Survey identified strengths and areas for improvement (career development, performance management, staff empowerment). Less than half of respondents felt the Fund was effective in identifying the best staff for promotion, managing poor performance, and creating an environment for staff to fully contribute ideas.
  - Action plan measures include: accountability framework for departmental people and budget outcomes; structured approach to internal mobility and extended external mobility options; significant investment in leadership development and managerial training; strengthening performance management.
  - A full staff survey will be conducted every two years, with a mini-survey in interim years.
  - Regular self-assessments with input from authorities and external stakeholders will take place; an upcoming IEO evaluation of self-assessment systems will review progress.

### Implementation plan — C. Better integrate financial sector issues into macroeconomic assessments
- IEO recommendations included strengthening the FSAP, addressing problems that limited its effectiveness in the run-up to the crisis, and hiring experienced market participants for MCM and area departments; missions to G20 economies and financial centers should include experienced financial experts.
- Key management responses and measures:
  - More will be done to integrate financial stability assessments in bilateral and multilateral surveillance.
  - TSR found integration of FSAPs in Article IVs remains insufficient; mandatory FSAPs for 25 systemic economies are an improvement but frequency—every five years—is low relative to pace of financial developments.
  - With insufficient Board support to increase FSAP frequency, alternative modalities will be pursued:
    - A financial expert will be assigned to each Article IV team involving systemically important financial sectors.
    - Continued hiring of more staff with financial sector experience.
    - Mobilize additional resources for systemically important countries and others as needed (e.g., in case of mounting financial vulnerabilities).
    - Strengthen coverage of financial issues in Article IVs by:
      - stepped-up training and dissemination of vetted tools (e.g., stress-tests) and good practices, including on LIC-specific issues;
      - cross-country thematic studies (e.g., on interconnectedness and financial deepening).
    - Staff will intensify efforts to draw cross-country lessons from FSAPs; example: a paper on Stress Testing: Toolkit and Best Practices focusing on stress-testing banks.
    - Staff preparing a strategic plan for financial sector surveillance to be discussed by the Board in March 2012; it will cover objectives of financial sector surveillance, identifying vulnerabilities and risks, transmission channels such as macro-financial linkages, and policy responses including macro-prudential policies.

### Implementation plan — D. Overcome silo behavior and mentality
- IEO recommendations called for clarifying rules and responsibilities for the internal review process to connect the dots, bring cross-country experience to bear, ensure policy consistency across countries/regions on cross-cutting issues, and establish interdepartmental collaboration earlier in the Article IV process.
- The MIP outlines intentions to address silo behavior and improve cross-departmental collaboration as part of the broader surveillance strengthening agenda. (Source content ends mid-discussion of this theme.)

---

### _021412 - 19.      New measures will ensure the demand for cross-country experience among staff

### Cross-country experience, staff tenure, and mission-team stability
- New assignment-tenure framework to balance demand for cross-country experience with mission team stability.
- Key tenure milestones (as announced):
  - "three years will be about the minimum for an assignment"
  - "at five years staff members will be encouraged to look for assignments outside their department"
  - "if they are unable to do this by seven years there will be centralized support"
- Implementation and scope:
  - The scheme will start with A-level economists and be extended to other staff based on this experience.
  - HRD, with support from the Technology and General Resources Department (TGS), has implemented a system to monitor mission chief and team tenure.
  - Results of the tenure monitoring will be shared with the Board as part of briefings on strategic personnel issues.
- Management actions to promote cross-departmental collaboration:
  - Specific measures will be taken to make progress on cross-departmental collaboration.
  - Convening interdepartmental meetings at the outset of each important policy Board paper to ensure all relevant views and workstreams are brought to bear early.

### Enhance the Fund’s ability to "connect the dots" (linkages and spillovers)
- TSR conclusion: crisis propagation and subsequent tensions underline the need for increased analysis of linkages and spillovers.
- Planned actions addressing IEO concerns:
  - Upcoming WEOs will cast the chapter on regional developments around policy spillovers and interactions across countries in different regions.
  - Spillover reports will be continued next year for the systemic five economies with the agreement of the relevant members.
  - Spillovers and cross-country experiences will be given more coverage, as appropriate, in Article IVs, with the support of the review process.
  - Aim to have Article IV consultations for interconnected countries discussed by the Board in clusters.

### Deliver a clear, consistent message on the global outlook and risks
- IEO recommendation: ensure assessment of the global economy is consistent and comprehensive, with a central scenario and clear specifications of risks and vulnerabilities.
- Creation of the Consolidated Multilateral Surveillance Report (CMSR):
  - CMSR will distill key messages from the WEO, the GFSR, the Fiscal Monitor, and other surveillance products.
  - Objective: increase traction and strengthen intra-institution dialogue on key issues and policies; reduce overlap, inconsistency, and message diffusion.
- WEO change:
  - "starting with the next issue, WEOs will pay greater attention to risks around the baseline."

### Internal culture and institutional values
- Directors emphasized need for progress on internal culture and institutional values; no quick remedies.
- Management reforms announced covering: leadership, management training, mobility, and accountability.
- Diversity and workplace values:
  - The Fund will invest in building a better understanding of the importance of diversity.
  - A statement of workplace values will be agreed by September 2012 for employees emphasizing people management and diversity.
- Proposed emphases in the workplace values statement:
  - "The mandate for managers and supervisors to achieve top-quality output through top-quality people management and staff development;"
  - "An encouragement for all staff to contribute their ideas to the work program of departments, even if these are not in line with the Fund’s “group think”;"
  - "Readiness for continued learning and growth of experience through an array of diverse roles throughout a Fund career;"
  - "Readiness for mobility, both inside the Fund and vis-à-vis the outside, including Resident Representative positions;"
  - "Measured risk taking;"
  - "Team work, tact, and understanding in interactions with colleagues, recognizing the wide range of cultural differences that exist within the Fund."
- Monitoring and learning culture:
  - Future PMRs will contain a comprehensive analysis of the status of all Board-endorsed IEO recommendations.
  - This will begin with the Fifth PMR, due in early 2012.
  - Footnote: "Taking the First Periodic Monitoring Report, which summarizes all previous IEO recommendations, as a baseline, the Fifth report will cover the implementation status of all subsequent Board-endorsed recommendations."

### Resource implications
- Many measures can be contained by shifts in emphasis and focus without measurable costs.
- Initiatives entailing additional cost include: spillover reports, publishing multilaterally-consistent external balance assessments, the CMSR, and increased financial expert involvement.
- Preliminary estimate of net additional resources needed for future years (above what is already factored in the current medium-term budget): "$3.2 million" for measures coming out of the TSR.
- "The 2013 budget discussion will be able to identify savings to cover the additional resource implications."
- Costs of other initiatives (summings up, self assessments, hiring practices, diversity, staff tenure, and cross-departmental collaboration) will be assessed in the context of the medium-term budget discussions, with possible offsetting cost savings found by re-prioritization as needed.

*Source: _021412 - 1.      This paper presents a forward-looking management implementation plan (MIP) / 19.      New measures will ensure the demand for cross-country experience among staff*

### 1.      This paper presents a forward-looking management implementation plan (MIP)

### _021412 - 1.      This paper presents a forward-looking management implementation plan (MIP)

### Overview and purpose
- Presents a forward-looking management implementation plan (MIP) responding to the IEO evaluation.
- Addresses Board-endorsed IEO recommendations and proposes broader implementation ideas where the Board saw merit in the IEO’s general approach.
- Builds on the 2011 Triennial Surveillance Review (TSR) and incorporates TSR action-plan elements to make surveillance more effective, candid, and evenhanded.
- Establishes monitoring mechanisms: an update on surveillance agenda progress to be considered by the Board at the end of 2012; issues not covered in the TSR to be monitored through future Periodic Monitoring Reports (PMRs).

### IEO findings and Board reactions
- Directors “concurred with the general thrust of the IEO evaluation and recommendations.”
- Board noted reforms already undertaken that will help enhance candor and traction: early warning exercise, vulnerability exercise for advanced economies, inputs into the G20 Mutual Assessment Process, integration of WEO-GFSR messages, mandatory financial stability assessments for systemic countries, and cross-country and spillover reports.
- The Evaluation made five general recommendations:
  - Create an environment that encourages candor and diverse/dissenting views;
  - Strengthen incentives to “speak truth to power”;
  - Better integrate financial sector issues into macroeconomic assessments;
  - Overcome silo behavior and mentality;
  - Deliver clear, consistent messages to the membership on the global outlook and risks.
- Directors noted some IEO specific recommendations required further analysis to make them actionable within competing work program priorities and budgetary constraints, and emphasized tackling internal culture and institutional values directly.

### Implementation plan — A. Create an environment that encourages candor and diverse/dissenting views
- IEO recommended creation of “a risk assessment unit that reports directly to Management, with the purpose of developing risk scenarios for the systemically important countries and analyzing tail risks for the global economy.”
- Management response:
  - The Board did not support creating a new risk assessment unit due to overlap with other initiatives; the TSR emphasized improving processes to focus on risks and transmission channels.
  - Three TSR actions agreed (addressing the IEO concern):
    - Starting with the April 2012 issue, WEOs will pay greater attention to risks around the baseline;
    - The review process is being modified so relevant analyses and findings from the vulnerability and early warning exercises, the WEO, the Fiscal Monitor, and the GFSR will be taken up in policy discussions with country authorities; the tools underlying multilateral surveillance will be disseminated to area departments to support this effort;
    - The upcoming revised surveillance guidance note will stress the need for an explicit discussion of risks in Article IV consultations, potentially supported by risk assessment matrices in Article IV reports akin to those used in financial sector stability assessments.
- Staffing diversity and expertise actions (responding to IEO recommendations to broaden professional diversity and strengthen financial sector expertise):
  - Recruit a higher proportion of midcareer economists with substantial policy experience: 72 percent in 2010, up from 59 percent in 2005;
  - Hire more staff with financial sector experience and experts with fiscal and debt policy skills, doubling the number of hires with such skills in recent years;
  - Increase support for training and secondments to sharpen staff knowledge of financial markets.
  - Progress updates to be provided to the Board annually by HRD; the next such update is expected in July 2012.
- Career development and mobility for financial sector experts:
  - Enhancements for A14 staff to be folded into the staff survey action plan; a Management working group established to consider reforms supporting career development for financial sector experts, including broadening promotion criteria for A15/B1, enriching job content, and enhancing mobility.
- Summings Up and minority views:
  - Actions to better reflect minority views in Summings Up; a Working Group of Executive Directors (supported by staff and perhaps an external consultant) will clarify purposes of Summings Up and seek Board endorsement of proposed changes in the coming months.
  - “Main Themes in Grays” now highlights “Issues for discussions” (country matters) or “Remaining Diverging Views” (policy matters) to surface differing views ahead of Board discussions.
- External perspectives:
  - External views have been sought for policy discussions where appropriate (e.g., external experts for the TSR, External Advisory Group input, external advisors for the Review of Conditionality).
  - TSR ideas for more external involvement (ex-post assessments, minority views in Article IVs, web debates) were noted but not taken further at this time by the Board.

### Implementation plan — B. Strengthen incentives to “speak truth to power”
- IEO recommendation: “Management should encourage staff to ask probing questions and challenge Management’s views and those of country authorities.”
- TSR findings:
  - Views on candor are mixed; surveillance may err on the side of caution.
  - Surveys for the TSR found few mission chiefs reporting pressure from members to temper positions, though some reported instances of pressure from large advanced and emerging economies.
- Measures to increase candor:
  - The review process will ensure country papers report on implementation of past advice given in Article IVs and key FSAP recommendations to help address lack of follow-up that could signal lack of candor or consistency in policy advice.
- Organization-wide self-assessments:
  - A Fund-wide action plan responding to the staff survey was rolled out in October 2011.
  - Survey participation: more than 2,000 staff participated in December 2010 and January 2011, a response rate of over 70 percent.
  - Survey identified strengths and areas for improvement (career development, performance management, staff empowerment). Less than half of respondents felt the Fund was effective in identifying the best staff for promotion, managing poor performance, and creating an environment for staff to fully contribute ideas.
  - Action plan measures include: accountability framework for departmental people and budget outcomes; structured approach to internal mobility and extended external mobility options; significant investment in leadership development and managerial training; strengthening performance management.
  - A full staff survey will be conducted every two years, with a mini-survey in interim years.
  - Regular self-assessments with input from authorities and external stakeholders will take place; an upcoming IEO evaluation of self-assessment systems will review progress.

### Implementation plan — C. Better integrate financial sector issues into macroeconomic assessments
- IEO recommendations included strengthening the FSAP, addressing problems that limited its effectiveness in the run-up to the crisis, and hiring experienced market participants for MCM and area departments; missions to G20 economies and financial centers should include experienced financial experts.
- Key management responses and measures:
  - More will be done to integrate financial stability assessments in bilateral and multilateral surveillance.
  - TSR found integration of FSAPs in Article IVs remains insufficient; mandatory FSAPs for 25 systemic economies are an improvement but frequency—every five years—is low relative to pace of financial developments.
  - With insufficient Board support to increase FSAP frequency, alternative modalities will be pursued:
    - A financial expert will be assigned to each Article IV team involving systemically important financial sectors.
    - Continued hiring of more staff with financial sector experience.
    - Mobilize additional resources for systemically important countries and others as needed (e.g., in case of mounting financial vulnerabilities).
    - Strengthen coverage of financial issues in Article IVs by:
      - stepped-up training and dissemination of vetted tools (e.g., stress-tests) and good practices, including on LIC-specific issues;
      - cross-country thematic studies (e.g., on interconnectedness and financial deepening).
    - Staff will intensify efforts to draw cross-country lessons from FSAPs; example: a paper on Stress Testing: Toolkit and Best Practices focusing on stress-testing banks.
    - Staff preparing a strategic plan for financial sector surveillance to be discussed by the Board in March 2012; it will cover objectives of financial sector surveillance, identifying vulnerabilities and risks, transmission channels such as macro-financial linkages, and policy responses including macro-prudential policies.

### Implementation plan — D. Overcome silo behavior and mentality
- IEO recommendations called for clarifying rules and responsibilities for the internal review process to connect the dots, bring cross-country experience to bear, ensure policy consistency across countries/regions on cross-cutting issues, and establish interdepartmental collaboration earlier in the Article IV process.
- (Source content ends mid-discussion of this theme; the MIP outlines intentions to address silo behavior and improve cross-departmental collaboration as part of the broader surveillance strengthening agenda.)

*Source: _021412 - 1.      This paper presents a forward-looking management implementation plan (MIP)*

### 19.      New measures will ensure the demand for cross-country experience among staff

### _021412 - 19.      New measures will ensure the demand for cross-country experience among staff

### Cross-country experience, staff tenure, and mission-team stability
- New assignment-tenure framework to balance demand for cross-country experience with mission team stability.
- Key tenure milestones (as announced):
  - "three years will be about the minimum for an assignment"
  - "at five years staff members will be encouraged to look for assignments outside their department"
  - "if they are unable to do this by seven years there will be centralized support"
- Implementation and scope:
  - The scheme will start with A-level economists and be extended to other staff based on this experience.
  - HRD, with support from the Technology and General Resources Department (TGS), has implemented a system to monitor mission chief and team tenure.
  - Results of the tenure monitoring will be shared with the Board as part of briefings on strategic personnel issues.
- Management actions to promote cross-departmental collaboration:
  - Specific measures will be taken to make progress on cross-departmental collaboration.
  - Convening interdepartmental meetings at the outset of each important policy Board paper to ensure all relevant views and workstreams are brought to bear early.

### Enhance the Fund’s ability to "connect the dots" (linkages and spillovers)
- TSR conclusion: crisis propagation and subsequent tensions underline the need for increased analysis of linkages and spillovers.
- Planned actions addressing IEO concerns:
  - Upcoming WEOs will cast the chapter on regional developments around policy spillovers and interactions across countries in different regions.
  - Spillover reports will be continued next year for the systemic five economies with the agreement of the relevant members.
  - Spillovers and cross-country experiences will be given more coverage, as appropriate, in Article IVs, with the support of the review process.
  - Aim to have Article IV consultations for interconnected countries discussed by the Board in clusters.

### Deliver a clear, consistent message on the global outlook and risks
- IEO recommendation: ensure assessment of the global economy is consistent and comprehensive, with a central scenario and clear specifications of risks and vulnerabilities.
- Creation of the Consolidated Multilateral Surveillance Report (CMSR):
  - CMSR will distill key messages from the WEO, the GFSR, the Fiscal Monitor, and other surveillance products.
  - Objective: increase traction and strengthen intra-institution dialogue on key issues and policies; reduce overlap, inconsistency, and message diffusion.
- WEO change:
  - "starting with the next issue, WEOs will pay greater attention to risks around the baseline."

### Internal culture and institutional values
- Directors emphasized need for progress on internal culture and institutional values; no quick remedies.
- Management reforms announced covering: leadership, management training, mobility, and accountability.
- Diversity and workplace values:
  - The Fund will invest in building a better understanding of the importance of diversity.
  - A statement of workplace values will be agreed by September 2012 for employees emphasizing people management and diversity.
- Proposed emphases in the workplace values statement:
  - "The mandate for managers and supervisors to achieve top-quality output through top-quality people management and staff development;"
  - "An encouragement for all staff to contribute their ideas to the work program of departments, even if these are not in line with the Fund’s “group think”;"
  - "Readiness for continued learning and growth of experience through an array of diverse roles throughout a Fund career;"
  - "Readiness for mobility, both inside the Fund and vis-à-vis the outside, including Resident Representative positions;"
  - "Measured risk taking;"
  - "Team work, tact, and understanding in interactions with colleagues, recognizing the wide range of cultural differences that exist within the Fund."
- Monitoring and learning culture:
  - Future PMRs will contain a comprehensive analysis of the status of all Board-endorsed IEO recommendations.
  - This will begin with the Fifth PMR, due in early 2012.
  - Footnote: "Taking the First Periodic Monitoring Report, which summarizes all previous IEO recommendations, as a baseline, the Fifth report will cover the implementation status of all subsequent Board-endorsed recommendations."

### Resource implications
- Many measures can be contained by shifts in emphasis and focus without measurable costs.
- Initiatives entailing additional cost include: spillover reports, publishing multilaterally-consistent external balance assessments, the CMSR, and increased financial expert involvement.
- Preliminary estimate of net additional resources needed for future years (above what is already factored in the current medium-term budget): "$3.2 million" for measures coming out of the TSR.
- "The 2013 budget discussion will be able to identify savings to cover the additional resource implications."
- Costs of other initiatives (summings up, self assessments, hiring practices, diversity, staff tenure, and cross-departmental collaboration) will be assessed in the context of the medium-term budget discussions, with possible offsetting cost savings found by re-prioritization as needed.

*Source: _021412 - 19.      New measures will ensure the demand for cross-country experience among staff*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2012/_021412.pdf_