In order to address the challenges of development and circumstances of the 21st Century the EurOrient Financial Group must be agile, inclusive, effective, innovative, accountable, and financially sound.
To this end, the governance reform guiding principles are to enhance efficiency, transparency and the democratization of EurOrient, including its decision-making process. Understanding the necessity for governance reform to be a compromise and accommodating to increase the strength and legitimacy of the EurOrient Financial Group to become a more effective body by expanding the participation to be more representative of the diverse interests of the world population.
Since 2006, the EurOrient Financial Group transforming from a relatively straightforward project financier institution into a full-fledged private sector global development bank responding to a wide range of development needs. As the needs of the developing countries continue to implement economic reforms; as their needs for infrastructure, human resources, and new technology grow; as investments in environmental protection become more pressing; and as socioeconomic concerns like poverty, education, health and population, water supply and sanitation, and urban development and housing become more urgent, the EurOrient faces increasing demands on its assistance and services.
Mr. Nechemia stressed that "EurOrient Financial Group governance system needs to be rethought so that it can meet the challenges of its own growth, respond to future issues and as transforming itself to a full-fledged global development bank as it evolving from mere project financier."
The EurOrient's way of operating has changed over the years and has undergone rapid change since the beginning of the 1988s as it has sought to adapt to the changing needs of emerging countries and economies in transitions in a globalized world economy. In 2009, the EurOrient's Chairman of the Board of Governors of the EurOrient Financial Group, Mr. Ron Nechemia, has launched an ambitious governance reform agenda, aimed at increasing the EurOrient's development effectiveness in four priority and related areas: refueling current business activities; refocusing the development agenda; retooling the EurOrient's knowledge base; and revamping institutional priorities.
The EurOrient's mandate and governance is evolving along with changes in the global economy; the central objective of the new governance structure is to allow broad participations of both developing and developed countries, the private and public sector institutions as well as the participations of civil society and academia in the process of development. In the EurOrient Financial Group new governance architecture the designations to the various boards and committees are based on merits and not based on quotas that are broadly based onthe relative size of an economy of a country in relationship to the world economy, such as in the case of the multilateral development banks, positioning the Organization to capture a central role within the development finance.
Spearheaded by the Treasury Board Secretariat of the EurOrient Financial Group has caused to address the following five key issues of concerns in the phase one of the reform. These are: Enhance voice and participation; Restructure the EurOrient's governing bodies; Reform the leadership selection process; Strengthen management accountability; and strengthen the EurOrient's resource base.
In the new EurOrient Financial Groupgovernance architecture EurOrient applies electoralrules to achieve a balanced and diversified representation on the ExecutiveDirectors.In the new governance architecture the member who serves on the various committees and boards are serving on rotating basis, consisting of representatives from five regional groups that echoing the diverse interests of the world population. They are appointed to represent a country, or groups of countries.
Mr. Nechemia is pointing out "Given the challenges of development and circumstances, and the financial risks, which are posed by global trends as we move into 21st century, the EurOrient Financial Group governance system needed to be reform urgently." And he added "it should be noted that the system needs reform not because it has "failed," but because it has outgrown its own original design. Much like children who outgrow their clothes as they mature, or small towns that need new infrastructure as they blossom into large cities."
Important progress was made in the reform of the EurOrient's governancein 2009. However, enhancing the EurOrient's legitimacy and effectiveness mustalso deal with the question of whether the significant changes since theestablishment of the EurOrient Financial Group require reform of theinstitutional framework through which dicission are actually exercised. Amongother things, this requires careful consideration of the respective roles andresponsibilities of the Board of Governors, theEurOrient Development Committee, the Executive Board, and EurOrient management.
About EurOrient
The EurOrient'sprincipal objective is to reducing poverty and promoting sustainable economic growth. EurOrient invests in projects and programs that promote social development, build human capacities, and address host government priorities for investments in physical infrastructure that promote and enhance social development. These projects include roads, transportation and communication systems, water, sanitation and other types of investments with social development outcomes such as improved quality of life and increased human knowledge and skills.
EurOrient Financial Group is a private sector global development finance institution accredited by the United Nations General Assembly on Financing for Development. The mission of the EurOrient Financial Group is tosupport the economic and social development efforts of the less developed countries as they, in particular, seek to achieve the Millennium Development Goals("MDGs").
