SUMMARY OF MAJOR DECISIONS. Fifty Seventh Meeting, Accra, Ghana. 30 April to 1 May 2015 Chair: Don Blackmore

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1 SUMMARY OF MAJOR DECISIONS Fifty Seventh Meeting, Accra, Ghana 30 April to 1 May 2015 Chair: Don Blackmore CGIAR MATTERS CGIAR Governance Reforms, Strategy Results Framework (SRF) and Second Round of CRPs The DG presented the papers covering CGIAR governance reform, Strategy & Results Framework and second round of CRPs and briefed the Board on the outcome of the Bogor meeting. Regarding Governance, he stated that the Options Team established by the Fund Council had presented four options ranging from minor modifications to the existing Consortium set up to a more significant change to one governing body. While intense discussions with divergence of views marked the first day s discussions, a decision was taken by the FC on the second day by accepting a modified option of the single governance body (option 4). This option envisages a CGIAR System Council by merging the current Consortium Board and Fund Council; and a single System Office by merging the Consortium Office and Fund Office. While the details of the composition of the new System Council is being worked out, it may have a number of contributor seats based on funding threshold and representation from BRIC countries given their population, large number of smallholder farmers and contributions to agricultural research. In addition to representatives of World Bank, FAO, GFAR, ISPC and IEA, the Council will also have 2 representatives of the Centers (one representative of center DGs and Board Chairs each) He noted that these are big changes and that the devil is in the details. A transition team will be established by the FC to work through the details over the next six months. On Strategy and Results Framework (SRF), the DG mentioned that the SRF was approved after last minute changes to reflect the donors requests for clearer targets and prioritization. The DG briefed the Board that there have been intensive set of discussions around the process for determining the design of the second round CRP portfolio led by the Centers and on the draft Guidance document prepared by the Consortium Office. He stated that a meeting is planned in London in two weeks time to discuss and agree on the CRP portfolio. The Centers will spend one day in closed session and two days with the ISPC, Consortium Board and Office members and IEA with the expectation that by the end of day three there will be agreement on the new portfolio. The meeting will also discuss areas such as composition of Steering Committees, scope of individual CRPs, partners and fund allocation mechanisms. He further stated that if Centers fail to decide on the new portfolio, the Consortium with ISPC will propose a new architecture. He 1

2 referred to the overall timeline for the second round that was included in his report. Responding to a question on Fund Council s involvement in this process, the DG noted that Fund Council is not involved in the details but will be involved in the proposal review with ISPC s support. The Chair mentioned that this has been a long process and expressed the Board s support for the role the DG has played in getting the process with Centers to this stage. He put on record thanks for the DG s efforts in working with the Meridian Institute to reach a consensus on the portfolio. The DG briefed the Board on the Consortium s request to change IWMI s ratification clause approved by Board at its April 2014 meeting noting that while the Consortium Office and their legal advisers agree that IWMI s statement does cover the gap period and therefore sufficient in regard to the original request from the CB Chair, the situation of different statements from Centers has left some legal ambiguity about the status of the Joint Venture. He further stated that Management has no objection to agreeing to the statement that supports the view that the JV has ceased to exist. However, the Management prefers option 2, as option 1 explicitly states that IWMI ratifies its membership of the Consortium, which in the Management s view is not necessary as it is already evident. The Board approved IWMI s revised ratification clause in line with option 2 as reproduced below and asked Management to convey the same to the Consortium. BOARD MATTERS Board Assurance on Compliance of Intellectual Assets (IA) Principles Mireille Perrin, Director-Business Development, introduced the agenda item noting that it is a requirement as per section 10 of the CGIAR Intellectual Assets (IA) Principles, for all centers to submit annually to CGIAR the following: (i) (ii) Board Assurance on compliance of management of Intellectual Assets according to CGIAR Principles and; IA consolidated report covering the preceding year. The Board reviewed IWMI s IA consolidated report for 2014 and approved Management recommendation for the Board to provide an assurance of compliance based on the said report and for the Board Chair to sign the Board assurance on behalf of the full Board. 2

3 Program Committee On the future of WLE, there had been some discussion with CIFOR regarding either merger or closer working relationships between the CRP on Forests, Trees and Agroforestry (FTA) with WLE. But there was also recognition that the two Programs are working in very different geographies and landscapes so it was difficult to see how a merger would actually work. Recognizing that there is still a lot of uncertainty about the second phase, the Chair of the SC briefed the meeting on the perspective of the Steering Committee that WLE/IWMI needs to work more on integrated systems moving forward. The process of the 2 nd phase of CRPs is being led by the Centers so they need to be at the core of the process. There is also a need to retain all the essential elements that have been established within WLE and now be very specific and targeted about who WLE partners with for biggest impact. The partnership with FAO for example provides a good opportunity. Partnership requires considerable time, effort and cost, and this needs to be more fully recognized. The Program also has potential for outreach across the portfolio more broadly and might involve the introduction of the ESRF into landscapes across the whole CRP portfolio including commodity systems CRPs. Preparing for CRPs Phase II The DG and DDG briefed the PC on developments around the next phase of CRPs. The design of the CRP portfolio including WLE, will be resolved in a meeting of Centers in London th May. IWMI is working on a two track process, as we decide what this could look like for WLE moving forward as a standalone program including what new things to include and what to let go. There is also some possibility for a combination of WLE with other natural resource management CRP(s) such as the CRP on Forests, Trees and Agroforestry (FTA). An amalgamation would be quite different to the current WLE but both FTA and WLE are keen to retain the ecosystem services focus. Combining the two would expand the stakeholders and the partner structures. Cutting existing relationships could bring reputational risks with important partners. There has for example been important work on building impact pathways through the WLE Focal Region flagship that must not be lost. FTA sentinel sites are quite different from WLE s focal regions, and most of the FTA sentinel sites have a REDD focus. Report of the Audit Committee The Audit Committee Chair summarized the Audit Committee proceedings and presented eight recommendations for Board approval. The Audit Committee met with Ms. Elena Figus, Associate Director, CGIAR-IAU and discussed CGIAU report covering areas on IWMI s internal audit update, CRP audits, concerns regarding PWC audit reports and compliance with IIA standards, and also met with Ms. Figus in a closed session. The Committee also discussed the 2015 internal audit plan and encouraged Management to finalize the 2015 audits that can be conducted by CGIAU and those by AuditAsia during the transition period. 3

4 s The Committee did not note any major concerns and recommends the adoption of the report from the CGIAR Internal Audit. The Audit Committee recommends the approval of 2015 audit plan with the exception of OHS audit, which could be partly replaced with the advisory review currently ongoing. The Committee encourages Management to finalize the 2015 internal audits that can be conducted by CGIAU and those by AuditAsia during the transition period. The Committee had discussed the appointment of external auditors for 2015 and noted that the audit fee quoted by KPMG has not increased over The Committee had also discussed the appointment of PWC as Internal Auditors for 2015 noting CGIAU question about compliance with IIA standards and had asked Management to discuss this with the auditors. The Audit Committee recommends appointing PWC to undertake local audits and the proposed arrangements for other audits considering the transition to AuditAsia. However, the Committee strongly encourages that Management discusses with PWC the need to state in their reports the compliance with IIA standards and inform the Committee of alternative options should PWC not agree with the request. The Committee discussed the 2014 audited financials and noted that nothing alarming has come to its attention. The Committee had a teleconference with IWMI external auditors in a closed session and discussed the 2014 audited financials, KPMG Management letter and IWMI responses. The Committee noted that there were no major issues to report to the full Board. The Committee also expressed satisfaction over the comprehensive financial statements. The Committee recommends that the Board approves the 2014 audited financials for IWMI, KPMG management letter and IWMI responses, and congratulates the Management and staff for their efforts in producing comprehensive financial statements. The Committee recommends that the Board approves the appointment of KPMG as IWMI s external auditors for the year The Audit Committee was presented with an update on investments and expressed satisfaction that the Management has been tracking investments in line with the policy. 4

5 The Board Chair stated that the full Board in a closed session discussed the letter received at the last minute from CGIAU Director and agreed that an objective response cleared by the DG and Audit Committee Chair will be sent to CGIAU Director. The Board also discussed one of the best practices informed in the letter, namely that the Board Secretary should act as the Secretary to the Audit Committee and agreed to implement the same. The Board approved that the Board Secretary will act as the Secretary to the Audit Committee. Report of the Nominating and Human Resources Committee (NHRC) The NHRC Acting Chair, George Rothschild, summarized the key highlights of the meeting and tabled several recommendations for Board approval. He reported that the Committee was updated on a range of HR matters including information on staff changes, status report on initiatives undertaken to improve gender and diversity that was also reported to the full Board, succession and staff development, training and capacity building, legal issues as well as results of 2014 performance management appraisal process. He mentioned that the Committee discussed the future Board composition and the appointment of an additional Board member from China, in the light of the budget cuts and turmoil regarding CGIAR governance processes and requested Management to prepare a skills matrix for consideration of the Board out of session and make preliminary inquiries about replacement candidates including one from India to fill the vacancy that will be created when Isher Ahluwalia s terms end in December The Committee recommends that the Board approves in principle that two Board members be appointed this year, subject to the appropriateness of the candidates. The NHRC had discussed the newly implemented Performance Management System, changes to the performance rating scheme, and individual goal alignment with organizational goal alignment, including the key performance indicators for the Director General. The Committee recommends that the Board agrees with the suggestion that the DG submits his draft KPIs to the Board by July 15 for finalization by September 15 as an Out-of-Session agenda item. The NHRC Chair reported that the Committee discussed the amendments proposed to the personnel policy manual covering contract renewals and extensions, ten year rule for internationally recruited staff members, and provision of travel for medical reasons. 5

6 The Committee recommends that the Board approves the inclusion of the proposed edits on the language to clarify the policy on Travel for Medical Reasons, which provides for Management to consider covering the travel costs for the staff member / authorized dependent in cases where the required medical facilities are not available at the duty station and if the circumstances do not qualify for evacuation through the medical insurance coverage. The Committee further recommends that the Board encourages the HR Director to review the clause to specify the number of trips that will be allowed as part of the policy, if approved. FINANCIAL MATTERS Revised Budget for 2015 and Proposed Pipeline IWMI Presenting the 2015 revised budgets, the DFA updated the Board on the late reduction in W1 and W2 funding that has influenced the revised 2015 budgets. He noted that in March 15, and shortly after approving the revised 2015 budgets for CRPs, the Consortium informed centers that the 2015 funding outlook is rather bleak and expected the funding to be lower by another 19% across CRPs. He presented the yearly WLE funding and IWMI s allocation that stated that while WLE funding has reduced by 24% over 2012 funding, IWMI s share has been reduced by around 28%, mainly because the minimum level of funding to the new WLE focal region flagship resulted in reduction in the center s allocation. The revised 2015 budget comprises a total IWMI income of $29.0 mil, expenditures of $31.5 mil and a deficit of $2.53 mil. The revised deficit includes $2.09 mil of operating deficit and $434K of use of reserves already approved by the Board. The Board discussed the overall funding reduction, the revised operating deficit and noted the steps already initiated by Management. Responding to a question on the difference in W1/W2 numbers in the presentation, DFA noted that this includes CCAFS Regional Program Leader s (CCAFS RPL) Budget, which is funded from CCAFS W1/W2 allocation and therefore needs to be identified to its funding source. However, it doesn t affect IWMI s W1/W2 funding as the CCAFS RPL is hosted by IWMI. In response to the question on Management s comfort with achieving $1.4 mil pipeline, he mentioned that past experience in achieving this pipeline has been positive and that a number of steps have been initiated and will be described under the agenda item on resource mobilization. 6

7 The Board approved the revised 2015 budget with a deficit of $2.53 mil, including $434K of use of reserves for strategic investments. The Board further encouraged Management to take necessary steps in reviewing workforce planning so as to balance the budgets in Expenditures and 2015 Revised Budgets - WLE The DFA presented WLE s 2014 report based on audited financials and noted that WLE s total funding comprises of W1 and W2 funding from the CGIAR Fund and W3 and Bilateral funds raised by participating centers. As compared to the total WLE expenditure of $69.19 million, the actual expenditures were recorded at $55.21 million a variance of 20%. The actual W3 and bilateral expenditures ($30.13 mil) were in line with the funding included in the respective Centers work plans ($31.1 mil), however the negative variance was mainly from W1 & W2 expenditures. Explaining the variance in W1 and W2 funding, he stated that a significant portion of the 2014 carry forward from W1 and W2 funding ($12.99 million) is coming from Innovation Fund (IF) and Focal Regions (FR) of $10.13 million and balance from Centers. The Board approved WLE 2015 funding allocation to accommodate funding cuts and approved the WLE 2015 total budget. ALL RECOMMENDATIONS WERE APPROVED BY THE BOARD 7