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Minutes of the Management Board Meeting - 9 February 2006 - DDP Reviews

In working towards the delivery of the Public Service Agreement and Service Delivery Agreement, the Management Board will aim to:

A. communicate the vision, role, direction and priorities of DFID to staff and other stakeholders;
B. ensure DFID's financial resources and staff are allocated and managed effectively;
C. monitor and improve DFID's performance;
D. protect and enhance DFID’s reputation as a highly effective international development organisation.

Topic	Attending	Observers	Purpose	MB Obj
Asia Division	Richard Calvert, Charlotte Seymour Smith	DFID Vietnam DFID India DFID Indonesia DFID Bangladesh DFID Afghanistan DFIDSEA
Africa	Dave Fish, Richard Calvert	DFID Malawi DFID Nigeria DFID Rwanda DFID South Africa DFID Zimbabwe DFID Tanzania DFID Uganda DFID Sierra Leone Evaluation Dept (Nick York)
HRD	Richard Calvert, Liz Davis	DFID Uganda
EMAD	Richard Calvert, Martin Dinham	DFID Brasil DFID Palestine DFID Caribbean (Sandra Perpera)
Policy Division	Richard Calvert, Sharon White	Evaluation (Nick York)
Attendees	Suma Chakrabarti (Chair), Mark Lowcock, Bill Griffiths (Non Executive Director), Minouche Shafik, Helen Ghosh (Non Executive Director), Masood Ahmed
Observing	Staff in 1 Palace Street, Abercrombie House and offices as detailed above

Asia Division (AsD)

Charlotte Seymour-Smith and Kevin Sparkhall represented Asia Division.

In discussion the Board:

noted the prospects for making progress on the PSA targets which were currently rated as red:

Charlotte Seymour-Smith explained that, on the net primary school enrolment, the last 10% of children not in school were always hard to reach. The prospects were good for reaching 100% completion in India, which would have a major impact on the MDG target globally. This looks less likely in other countries in the region;
statistics on TB case detections are poor. There are positive signs of progress in India but overall progress is uncertain.
under 5 mortality is improving across the region but it is not falling at a fast enough rate to move the target from red. We were involved in the health sector in a large number of countries in the region; and also looking at innovative models to involve the private sector and civil society. However, on the demand side, more could be done to build expectations of government health care provision as exists in the education sector;

noted Asia is making the most progress against the MDGs, but overall the Division’s portfolio quality rating of 50% was below that of the other two regional divisions. The Board encouraged Asia Division to improve the central management of information on portfolio quality. The scorecard exercise should help with the early identification of problem areas;
identified the paradox that the Asian Development Bank (ADB) was an important partner for DFID to scale-up spend with but that our track record on co-financing projects was mixed. More direction was needed from the centre in engaging with Manila and to work with them in their areas of comparative advantage;
emphasised that more effort was needed on harmonisation and alignment of assistance if the targets were to be met. Asia Division will prioritise alignment above harmonisation. Procurement procedures remained a obstacle to this;
welcomed the fact that Division has an owner of every risk and Heads of Office had risk management as a clear priority. Fiduciary risk and corruption remained particular concerns;
were pleased that clear resourced contingency plans and programme scenarios have been developed. Mechanisms are in place to transfer funds if threats are realised;
noted that work is underway to develop mechanisms to detect fraud and to raise awareness on the Blue Book. Charlotte Seymour-Smith said that risk of DFID funds being used in fraudulent public procurement would be included in the next DDP;
queried why HIV was not stated as a risk in this year’s DDP. The Division is confident it would achieve the HIV target.
noted that work is underway with Finance Division on applying the resource allocation model and on looking at the balance between SAIC and UK-based atstaff Band A.

In summarising the discussion, the Board:

thanked Charlotte Seymour-Smith and her team for their work over the last year;
were pleased that Asia Division is taking action to make progress on the off-track MDGs;
welcomed the actions being taken on portfolio quality and asked whether these could be further strengthened by setting objectives for senior staff. The Board will provide continued support on the improvement of portfolio quality and prioritisation;
welcomed the contingency planning that had been undertaken and agreed that if avian flu strikes, then it should be a corporate, rather than a divisional funding issue;
agreed that additional effort was needed on harmonisation;
recognised that our corporate relationship with the ADB was important for Asia Division and that the Board needed to engage at a strategic level;
requested Asia Division to come back to the Board on the issue of Band A SAIC and UK staff balance;

Africa Division

Dave Fish, Peter Kerby and Rosemary Stevenson represented Africa Division.

In discussion, the Board:

remarked on the progress that had been made in Africa since the 1990s on poverty levels, HIV and conflict. Global levels of aid to Africa had increased and DFID had trebled its aid budget to the continent.
noted efforts were being made to strengthen African institutions. The Division are looking at how we could work with the AU on gender. Africa Division is also undertaking work with regional institutions such as SADC and ECOWAS. As the African Development Bank is likely to become a major player on aid harmonisation and infrastructure, it should be the key focus of our engagement;
on the off-track MDGs, noted some progress was being made on girls’ enrolment but that there were issues around the measurement and data on maternal mortality;
welcomed that, while the first generation of African PRSs were predominantly focused on the social sectors, the next generation PRSs include a stronger emphasis on growth. We will need to balance our focus on the social sectors with a emphasis on economic growth;
agreed that a less incremental and more evidence-based approach to programme and headcount resource allocation was needed. The Board noted that there had been a strategic shift of resources to DRC, Nigeria and Ethiopia. Africa Division had just finished negotiating a 10 year MoU with Rwanda and there are more 10 year agreements in the pipeline. Flexibility exists to reallocate resources around the system, although capacity did need strengthening in DRC, Ethiopia and Sudan. There are opportunities to redeploy resources arising from ongoing harmonisation in places like Zambia. Difficulties remain in reducing allocations when there was an expectation of an increase in resources for Africa;
were pleased that action was being take to improve portfolio quality. The production of remedial action reports for every project marked 3 or less was producing positive results. Responsibility for portfolio quality is also being built into staff objectives;
emphasised that scaling up in high risk countries should be balanced with scaling up in effective states to ensure we manage both our risk portfolio;
asked whether we had the right toolkit for policy and delivery. Dave Fish said that 2005 had created huge expectations and a big workload. Africa Division is working closely with Policy Division on issues like maternal mortality. Africa Policy Department worked closely with PD and also provided a key challenge function. It was also essential to maintain a capability to follow through on the 2005 agenda;
questioned whether the balance between UK and SAIC staff was appropriate in Africa Division given the shortage of skills in partners Governments;
welcomed the zero tolerance approach to detection, identification and management action in respect of fraud and improvements over the last 5 years;
were pleased that the water and HIV targets was on track. On water, spend had been committed by multilateral institutions but not disbursed.

In summarising the discussion, the Board:

thanked Dave Fish and his team for their work over the last year.

agreed we should communicate the success story of Africa better;

agreed we should focus our engagement on African Development Bank (as it is more mission critical than NEPAD or the AU), involving the Board where necessary;

were pleased that growth is increasingly being taken into account in PRSPs, asked for it to be highlighted more in submissions;

welcomed the action both to monitor and improve portfolio quality and set clear objectives for senior staff in this area;

agreed that a more differentiated approach needed to be taken to the size of offices, skills and capacity. Further work was needed to make sure we had the appropriate balance of UK based and SAIC staff and that we made the most effective use of both SAIC and advisory staff;

welcomed the focus of policy on off-track MDGs and requested that the issues that impede progress were included in submissions;

requested a list of more countries where we could have 10 year arrangements;

emphasised that the Board remained happy to engage and help Africa Division where necessary.

Human Resources Division (HRD)

Liz Davis, Jane Clark and Ian McKendry represented HR

In discussion, the Board were:

pleased with the progress on the performance management system, change management and diversity;

noted that the key challenges to delivery on HR transformation are:
- developing ownership by line managers to lead the HR transformation,
- building and sustaining our own professional capability;
- realising the expected benefits of the new systems;
agreed that effective communication with line managers will be key to ensure buy-in across the organisation. Ensuring consistency of messages across such a heavily devolved organisation will be an ongoing challenge. HR are engaging proactively with staff through their attendance at retreats and divisional meetings. Staff need to be further encouraged to draw on HR’s skills and expertise. Managers need to be supported by HR in delivering the tough messages but it remains the responsibility of managers to communicate with their staff;
were pleased that work is being undertaken on how fast stream opportunities can be sequenced and in particular to ensure that corporate service jobs are seen as a key stage in career development;
noted that on headcount, HR has reduced by 22 people since last year. It is improving faster and is seen as more flexible than most other HR divisions across Government;
welcomed the commitment to professionalise key sectors of the Department, particularly HR, FCPD and ISD, and that there has been an extensive skills mapping of the SCS. The division are looking into how to take forward building our skills set. Liz Davis stressed that if we are serious about changing the skills mix of the Department, then this needs to be tackled in job design, objective setting, recruitment and training. The Strategic Workforce Planning exercise will set out the issues in this area clearly;
noted we were using a range of products to promote talent management below the SCS, including 360 feedback, coaching and mentoring. The tools currently used with the SCS will be cascaded through the organisation;
noted that the delivery of e-enabled change relied not only on good IT systems but also cultural and behavioural change across the Department.

In summarising the discussion, the Board:

thanked Liz Davis and her team. They were pleased with the progress that has been made since last years DDP discussion and recognised that 2006/7 will be a big year for delivery;
stressed the importance of communication in the effective delivery of the HR transformation. The Board is happy to be more involved in the communication of HR messages and asked for a script of these issues to be circulated. It would be important to involve also more junior staff in communications exercises;
agreed that talent management below the SCS is a key issue; agreed that more needed to be done to challenge and support different parts of the organisation in managing change.

Europe, Middle East and Americas Division (EMAD) Martin Dinham represented EMAD.

In discussion, the Board:

praised Martin and his colleagues for the terrific job they had done in the last year in improving corporate compliance and the development of systems;
were pleased with the action taken by the Division on portfolio quality. Martin Dinham set out how this had been achieved. The process is as follows:
- ensuring annual reviews and PCRs are done on time. There were 57 PCRs overdue in December 2004, now there are none. They are now working on clear communication of lessons learnt;
- every project that scores 3 and below has a turn around strategy which is owned by the project officer;
- a summary from each Department is submitted every 6 months for discussion at EMAD heads, to ensure constant monitoring of programmes;
- the Director’s office assesses the portfolio every 6 months. Members of the SCS already have objectives on project scoring and are working towards a 75% success rate.
stressed the need to strengthen our synergies with the EU, in particular with the new IPA and ENPI instruments. As bilateral budgets for the division are as generally fairly small there is a strong emphasis on influencing others, particularly the EU, which is the major donor in the ECAD region. The division is working with EUD to further understand the best configuration of staff to deliver the highest value of EU assistance;
welcomed the innovative approaches to working with reduced headcounts. The division informed the Board that a number of virtual teams have been set up on key policy issues, including on the EU. These seem to be working well and could be a model for other divisions. Good relations with ETID and PD were very helpful in supporting the virtual teams and the division as a whole;
noted that the division has been instrumental in pushing forward the Paris Declaration and has 6 staff dedicated to this area of work;
noted that we get called upon to allocate funds on an ad hoc basis to the Overseas Territories and this can disrupt resource allocation planning; noted Martin Dinham request for the resource allocation model to be adjusted to include minimum costs of running a country office. Martin stressed that staffing levels in EMAD are often not directly proportional to programme spend. In countries where we have smaller programmes staff often need to play a greater influencing role in country;
were pleased that the Division is on target to achieve the 27% reduction in staff by March 2008 have met the target set in December 2004, and with their progress in graduating country programmes. Future staffing levels will depend on politics in the Middle East;
were pleased that progress was being made on the water and HIV targets.

In summarising the discussion, the Board:

recognised that the division has turned around;
noted that the work on improving portfolio quality and the setting up of virtual policy groups could be replicated in other divisions;
agreed that the Division needs to step up its engagement with the EU;
agreed that the Board should engage more with the Division on key issues. One opportunity would be through meetings with staff after visits to the region.

Policy Division (PD)

Sharon White and Donal Brown represented Policy Division.

In discussion, the Board:

were pleased that relations between PD and regional divisions had significantly improved and that all parties were working proactively to improve policy coherence. Increased clarity on of the role of the Development Committee had also been important. PD had increased its emphasis on policy implementation;
noted the headcount constraints in PD, but agreed that further prioritisation was needed. PD needed to develop a capacity both to have a watching brief across a range of issues and both to be “globally excellent” on a more limited range of subjects. Some specific areas could be outsourced, as had been done on the bushmeat issue;
welcomed the increased focus on groups within PD with the development of group plans for 2006/7. They also noted the reduction in the production of guidance papers and encouraged PD to continue to maintain a tight focus on outputs;
noted that PD’s portfolio is of small value and has been dramatically reduced from 560 to 260 projects. Most of PD’s budget is structured through a combination of a few medium sized global funds and discussions were ongoing to transfer these to ETID. While the reduction in programme funds reduced the capacity for innovation, it was not felt necessary to hold a specific contingency to cover these;
noted than there will be pressures on the Division to take forward work coming out of the White Paper and CSR processes and on the implementation of the 2005 agenda;
were pleased with the progress that had been made on gender, since it had been raised in the DDP discussions last year. However, the recent evaluation of gender still raised significant concerns. It was agreed that PD would come back to the Management Board with a specific proposition over how to take forward work in this area;
emphasised that fiduciary risk and procurement were areas where we needed to be “globally excellent” and were concerned that was still too much variability of practice and process across DFID. It was agreed that a further discussion was necessary involving both PD and FCPD, to ensure we have the right organisational arrangements and are applying consistent judgements.

In summarising the discussion, the Board:

thanked Sharon and her team;
were pleased with the follow up from last year on prioritisation and asked for this to go further and focus on a limited number of key areas;
noted the improvements to management of the portfolio but asked the team to review the budget arrangements with FCPD on programme funds ;
requested a report on how PD would take forward work on gender;
agreed that senior staff and the Board would support PD in its management of workstreams arising from the WP, CSR07 and taking forward the 2005 agenda. These all had major corporate implications and would need addressing in conjunction with work on scaling up;
agreed that the Board would meet with PD and FCPD to discuss financial management and procurement.