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NEWS December 16, 2020

A diverse World Bank Sanctions Board brings credibility and fairness


Originally published by The FCPA Blog. 

As the world’s leading international development organization, the World Bank Group has committed to embracing diversity and inclusion in its work and workplace, and it has taken a zero-tolerance policy toward racism and any other form of discrimination. Beyond this stated commitment, the Bank is actively exploring what it can do better and how best to effectuate real change on this front.

It is critical that the WBG get this right because empowering others and respecting differences not only constitutes a moral imperative, but also makes good business sense in all areas of the Bank’s work – from operations and financing activities to the WBG’s Sanctions System. The Sanctions Board’s central contribution to the fairness and the credibility of the Sanctions System is manifold – and it stems from the Board’s composition, transparency, case law, and practice.

We will focus here on how the diverse composition of the Sanctions Board itself leads to a fair and credible process.

The Sanctions Board was fully constituted in 2007 and it is the final decision-maker in the WBG’s quasi-judicial administrative process for adjudicating allegations of fraud and corruption. Over the past 13 years, the Sanctions Board has evolved through a series of policy initiatives aimed at enhancing transparency and independence. These initiatives resulted in the Sanctions Board’s mandate to issue fully-reasoned public decisions since 2012 and in its all-external membership since 2016.

Today, the Sanctions Board is composed of seven members – with the World Bank selecting three members (including the Chair) and the International Finance Corporation and the Multilateral Investment Guarantee Agency each selecting two members. The Sanctions Board represents a rich diversity of personal and professional backgrounds, with current members hailing from South Africa, Nigeria, Singapore, Switzerland, Colombia, Argentina, and the United States. Three members are women and the majority would be considered people of color. In addition, Sanctions Board members bring a wealth of diverse professional experiences, ranging from judicial service and arbitral practice at the highest levels to leadership of top law firms and executive experience at United Nations agencies.

Sanctions cases are international in scope, arising in the context of WBG-financed projects all around the world. The misconduct alleged often transcends national boundaries and the accused respondents come from every region of the globe. A diverse Sanctions Board composition better mirrors the international diversity of the respondents and the countries in which the conduct in question transpires – which is key to the Sanctions System’s credibility as a process that provides all respondents, no matter where they are from or where the alleged misconduct occurred, with a fair and equal opportunity to defend themselves.

In addition, research has shown that diverse and inclusive groups make good decisions – with groups outperforming individual decision makers and decision-making results improving as the group’s diversity increases. A Harvard Business Review piece put it more bluntly: “nonhomogeneous teams are simply smarter.” According to that piece, diverse decision-makers are smarter because they focus more on facts, they process those facts more carefully, and they are more innovative.

These findings are unsurprising. On many occasions we have observed our Sanctions Board members – individuals with varied backgrounds, perspectives, and experiences – challenge each other’s views in a way that has led to more nuanced and accurate fact finding and analysis, and that has stimulated creativity and out-of-the-box problem solving. We have also observed the Sanctions Board, through its dynamic debates, identify and fill gaps in the Sanctions Framework through its jurisprudence. Sanctions Board members bring a wide range of perspectives – shaped by diverse backgrounds, experiences, nationalities, political and legal traditions, religions, cultures, and so much more. When these varied perspectives come together, they lead to improved and more accurate group thinking that tends towards a more critical approach to applying sets of rules.

The Sanctions Board’s central contribution to the fairness and the credibility of the Sanctions System is manifold. The diverse composition of the Sanctions Board, with all of the consequent benefits that flow from that diversity, is perhaps its greatest contribution. We see firsthand how diverse institutions, like the Sanctions Board, are fairer and more effective, and because of that, we welcome the renewed focus on diversity, inclusion, and confronting racism.



Giuliana Dunham Irving is the Executive Secretary to the Sanctions Board at the World Bank Group.

Ryan Velandria McCarthy is Senior Counsel at the World Bank Group Sanctions Board Secretariat.