United Nations intergovernmental organisations – is there an optimal board design?
This article is based on research by Angel Saz
The United Nations system comprises numerous intergovernmental organisations (IGOs) that were established to contribute to the functioning and delivery of global public goods. They develop policies and initiatives whose value to citizens is greater when conducted at a global level, rather than on a country-by-country basis.
Yet despite the extensive cross-border impact of IGOs – with wide remits that include health, climate, migration, and the protection of refugees – the design of IGO boards is sometimes inadequate and inconsistent.
With many IGOs under the UN system being criticised for failure to accomplish their mandates, this may be an issue of organisational and governance structure. IGO boards serve as a governance mechanism with global repercussions, so they should be consistently designed to ensure they deliver their obligations – especially in effectively monitoring the organisation.
Many IGOs under the UN system have been criticised for failure to accomplish their mandates
Angel Saz-Carranza and Ryan Federo, from Esade's Department of Strategy and General Management, have explored the design of 13 major IGO boards to better understand the system of IGO governance and establish which board designs are highly effective in monitoring the organisation. This should help practitioners improve IGO performance. Their findings reveal the effects of organisational complexity and the extension of distribution problems in UN IGOs.
The role of the IGO
Sovereign nations founded the UN system in 1943 to maintain international peace and security, develop friendly relations among nations, achieve international cooperation, and harmonise the actions of nations. There are currently 193 member nations (plus two observer nations) within the UN, with 34 IGOs that were established or incorporated under the UN system to pursue various mandates.
These IGOs govern and shape the institutional environments in which firms, national governments, public entities, and non-profit organisations operate. IGOs shape international policies and programme designs; they serve a regulatory function that strengthens inter-state activities; and they help to develop economic and political relations.
But despite playing such a key role in global functioning, many IGOs under the UN system barely meet – or fail to meet – minimum performance thresholds.
IGOs typically have boards to monitor performance and resolve the conflicting expectations of stakeholders resulting from the differing political agendas of individual member states. To be effective in this role, the boards must constantly and independently assess the performance of the organisation to ensure they are delivering their mandates.
However, the boards are often designed in a way that prevents them from doing so. Directors are constrained by limitations imposed by the member states that appoint them, board composition changes frequently because of domestic politics, and levels of transparency and accountability can be low.
For IGO boards to be effective in monitoring, different board features should be combined to address governance constraints.
The boards of 13 IGOs under the UN system were studied to systematically identify their designs and how they facilitated effective monitoring. The study highlights specific organisational designs that improve accountability in global governance.
Efficiency versus representation
Board designs associated with highly effective monitoring within IGOs are contingent on the interaction between their complexity and distribution: those with a narrow scope and a limited area of operation require less member representation on the board, while those with a wider reach and diverging interests need more member representation.
The underlying question when it comes to the monitoring function of IGO boards is whether the focus should be on efficiency or representation. The study reveals that IGOs pursue efficiency, but representation and symbolic efforts to promote diversity also drive board design.
For IGO boards to be effective in monitoring, different board features should be combined to address governance constraints
A configurational approach to board construction shows where the focus should lie. Large boards typically require support mechanisms, such as an executive committee or a board secretary, to overcome coordination problems and be efficient. Although larger boards help provide more resources in complex organisations, the complex structure of IGOs results in more representatives on the board, and this generates more coordination problems, rather than contributing to efficiency.
This suggests that while board efficiency is required for both strategy formulation and monitoring, broad representation is necessary only in diverse and complex IGOs.
Design leads to action
IGO boards are not randomly designed. Structures are developed through a rational process of selecting the appropriate design to meet organisational requirements and balance the expectations of member states. The complexity of the IGO determines the optimal design of the board for strategy formulation.
The design of the board should be linked directly to strategic function and the resulting actions required to achieve strategic goals
But to be highly effective in monitoring, the design of the board should be linked directly to strategic functions and the resulting actions required to achieve strategic goals. The board aligns managerial decisions with the expectations of stakeholders, so a framework of actions, measurements and expectations is necessary for each board to ensure organisational performance.
As well as individual expectations, team dynamics and external factors such as culture, media and political elements all affect how boards operate and perform the monitoring function. Board design should consider the relationships between members and peripheral influences, with continuous assessment and adjustment to ensure the monitoring function remains effective.
There are multiple ways to achieve highly effective monitoring. However, there are also multiple configurations that produce negative governance-design choices. Ultimately, IGO governance designs should address governance constraints to mitigate barriers that could inhibit the effective functioning of the organisation.
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