AGRICULTURAL KNOWLEDGE & INFORMATION SYSTEMS (AKIS) GOOD PRACTICE NOTE NO. 01/99

Reforming Agricultural Research Organizations Creating Autonomous Bodies and Managing Change

November 7, 1998

Work in progress for public discussion

The World Bank Rural Development Family Agricultural Knowledge & Information Systems (AKIS)

Agricultural Knowledge & Information Systems is a thematic team focusing on agricultural extension, education, and research within the Rural Development Department of the Environmentally & Socially Sustainable Development Network of the World Bank.

Contents Preface

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Executive Summary

1

Context for Reform

2

Organizational Autonomy What Do We Mean by Autonomy? Autonomous Bodies to Fund or Execute Research? Reasons for Autonomy Why Does Autonomy Fail?

2 2 3 3 4

Good Practices Linking Autonomy to Public Sector Reform Reviewing Autonomy Options Linking Autonomous NAROs to Clients and Other Stakeholders Establishing Sound Governance Establishing Sound Management Establishing Good Rules of Operation Diversifying Funding Sources Measuring Performance and Ensuring Accountability

6 6 6 7 7 8 8 9 9

Project Design for Managing Change Establishing A Strategic Vision Building Commitment Identifying a Local Change Manager Keeping Expectations Realistic

10 10 10 11 11

Annex. Functional flexibilities and delegation of powers needed by NAROs

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iii

Preface

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AKIS is the Agricultural Knowledge and Information Systems Thematic Team, composed of World Bank staff working in or interested in research, extension, and education programs. The overall team objective is to enhance the effectiveness of Bank support to agricultural knowledge and information system development and thus contribute to the Bank’s objectives of alleviating poverty, stimulating economic growth, ensuring food security, and improving sustainable management of natural resources. The AKIS team emphasizes policy, institutional, and management issues associated with agricultural research, extension, and education, recognizing that other thematic teams will focus on technical issues. The Team mission is to “promote the development of sustainable and productive agricultural research, extension, and education systems in Bank client countries.”

his “Good Practice Note” is based on a consultancy report prepared by John L. Nickel on “Institutional Reform of Public Research Organizations: Autonomy, Legal Status and Governance.” This Note draws on that report with additional inputs from Marie-Helena Collion, Ivar Serejski, Derek Byerlee and others. The full report by Mr. Nickel is available from the AKIS Anchor staff members in the Rural Development Department of the World Bank. “AKIS Good Practice Notes” are prepared to assist World Bank Team Leaders, national counterparts from Borrower countries, and other partners with preparation and implementation of projects to strengthen agricultural research, extension, and education programs. They attempt to synthesize lessons learned from innovative experiences in World Bank projects and elsewhere and make this information readily available for use by project teams.

David Nielson Chairman AKIS Thematic Team

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Executive Summary

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he World Bank is working with developing countries to improve the ability of their national agricultural research organizations (NAROs) to generate technology that increases agricultural productivity, alleviates poverty, and conserves natural resources. One way of doing so is to place NAROs under new autonomous legal entities with sufficient flexibility to efficiently manage financial, physical, and human resources for the needs of agricultural research. Organizational autonomy for NAROs ranges from limited flexibility in financial and personnel management to fully independent powers. There are two main reasons for creating autonomous organizations: (1) greater administrative flexibility to pursue funding from diverse sources, apply funds efficiently, ensure timely disbursement of resources, and provide for a system of open and merit-based recruitment, pay, and promotion; and (2) greater involvement by stakeholders (such as farmers and scientists) to help focus research on client needs, enhance scientific rigor, and promote a sense of stakeholder ownership in the institution and its work. Good practices include:

•

•

•

• •

•

Linking organizational reform to public sector reform as a whole. Ongoing World Bank assistance for public sector reform in many countries might resolve some of the issues that setting up an autonomous NARO is intended to address. Reviewing autonomy options. Options to consider in the short run should include requiring competition for available public funding.

•

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The minimum level of autonomy appropriate for an effective NARO is parastatal status, although reaching this level of autonomy might take time. Establishing sound governance. The governing body for the NARO must represent key stakeholders, be free of direct control by the government (to avoid politicization and favoritism), and be trained to avoid interfering in day-to-day NARO management. Establishing sound management. Leadership is key. The governing body should select the CEO through an open, merit-based process and establish rules for financial management tailored to the needs of a research organization. The NARO should have the statutory freedom to hire, pay, evaluate, promote, and dismiss staff in accordance with merit-based human resources policies tailored to the needs of scientific organizations. Establishing good rules of operation. Projects should devote time, training, and technical assistance to rulemaking. Rule makers should have experience outside the public sector to avoid replicating government business rules (and defeating the purpose of autonomy). Developing an appropriate institutional culture. Leaders for the NARO should formulate a clear mission and vision, guiding principles, and strategies in a participatory way that cultivates performance-oriented management practices and high performance expectations. Measuring performance and ensuring accountability. The funding body should be trained to negotiate contracts based on outputs

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Reforminging Agricultural Research Organizations

and to monitor performance against output targets.

more organizational autonomy is needed, then change should proceed at a pace that builds confidence and commitment to reform. Expectations for change should be realistically tailored to local conditions, opportunities, and constraints.

Before reforming a NARO, project planners should identify its strengths and weaknesses and evaluate alternative reform mechanisms. If

Context for Reform

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any countries are reforming their public research organizations to resolve performance problems, such as low productivity and unresponsiveness to client needs. The World Bank is working with developing countries to improve public research organizations through greater competition, increased client input, and more effective governing rules and accountability. National agricultural research organizations (NAROs), in particular, must become more efficient and effective because of the decline in public funding for agricultural research in many countries. In addition, the institutional makeup of national agricultural research systems (NARSs) is changing to include more pluralistic institutional structures, a growing role for the private sector, new mechanisms for research funding, greater attention to efficiency and effectiveness, and global scientific linkages.

For several decades, the Bank has assisted developing countries in improving NAROs to generate technology to increase agricultural productivity, alleviate poverty, and conserve natural resources. One widely attempted strategy has been to move agricultural research out of line ministries and place it under new autonomous legal entities with sufficient flexibility to efficiently manage financial, physical, and human resources for agricultural research. This paper discusses: • •

•

The question of autonomy for NAROs. Good practices (such as rules of governance) for agricultural research organizations. World Bank project design to improve NAROs through increased administrative flexibility and greater stakeholder involvement.

Organizational Autonomy tions with some form of legal status that distinguishes them from the regular civil service but which do not have a legal corporate identity. Although these organizations provide more flexibility in financial and personnel management, they are often required (or expected) to follow many civil service rules, and their power

What Do We Mean by Autonomy? The many degrees and forms of autonomy for research organizations can be classified into three broad categories: 1. Semiautonomous organizations—Organiza-

2

Organizational Autonomy

to set their own business rules is often ambiguous. Most national research organizations fall in this category. 2. Parastatal organizations—Publicly owned corporations with their own governing bodies that make their own rules for financial, personnel, and asset management. However, because these organizations remain in the public sector, their flexibility is often constrained by political factors, especially in determining salaries. Recently created research organizations in Colombia (CORPOICA) and in Côte d’Ivoire are in this category. 3. Private or nongovernmental research corporations—Fully private entities that operate for profit or not for profit. These organizations have full powers and more independence from political processes, though they might still receive considerable financial support from the government. The best example of this category of autonomous research bodies are the Crown Research Institutes (private for profit) in New Zealand, and some research foundations (private not-for-profit) such as FUNDAGRO in Ecuador. Some “elite” high science and social science centers of excellence have also been established on this basis.

tries have initiated the reform process through competitive funding mechanisms that favor those research organizations that can deliver high quality and relevant research. The need to compete for grants will often promote improve performance in research-executing organizations, regardless of their autonomy. However, a small, well-managed, flexible, and representative research funding body (such as a research council) is usually needed to efficiently manage a competitive grant program. Such a funding body will then be subject to the same issues of autonomy and governance discussed in this note. Reasons for Autonomy There are two main reasons for creating autonomous NAROs (see box 1 for details): 1. Administrative flexibility. Functional flexibility in management is needed to— • • • •

In practice the degree of autonomy relates to the degree that a research organization depends financially on public budgets. Higher levels of autonomy are generally associated with a greater diversity of funding sources. Autonomous Bodies to Fund or Execute Research? Autonomous research entities may be set up to fund research, execute research, or both. Worldwide, the bodies that fund research are increasingly separate from those that actually perform research. This in turn influences the appropriate size, organization, governance, and degree of autonomy of a research body. Some coun-

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Pursue funding from diverse sources, including self-generated income. Provide greater fungibility in use of funds (e.g., between salaries and operating costs). Ensure timely disbursement of resources to research programs. Provide for open and merit-based recruitment and a performance-based pay and promotion system.

2. Greater stakeholder involvement. Key stakeholders (such as farmers, university leaders, and scientists) may be marginalized when agricultural research is in a line ministry. Including stakeholders in the governing body of an agricultural research institution helps to— • • •

Focus research on client needs and on national policies. Enhance scientific rigor in evaluating research programs. Promote a sense of stakeholder ownership in the institution and its work.

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Reforminging Agricultural Research Organizations

ments to cover recurrent and capital costs without delay. ♦ Research budgets for operating costs, capital equipment, and salaries must be fungible so that, in case of budget cuts, salary savings from downsizing can be applied to cover operational and capital costs.

Box 1 Reasons for Giving NAROs Greater Autonomy Administrative flexibility:1 • Research requires competent managers, respected leaders, and highly qualified scientists who are well motivated to perform. Therefore— ♦ To secure the best personnel, research organizations must have a flexible recruitment and promotion system based on merit and free of political interference and seniority considerations. ♦ To motivate top-quality performance, dynamic research organizations must have the flexibility to reward outstanding performance and to dismiss unproductive scientists. ♦ To attract and retain the best scientists in the private sector and on the international job market, research organizations must have the flexibility to offer special monetary and non-monetary incentives. • Research is a creative process. Knowledge workers are most productive in a collegial, nonhierarchical, and non-bureaucratic institutional environment. • Good research depends on substantial and dependable operating budgets. Agricultural research in particular is sensitive to timely approval and disbursement of operational funds (for example, a delay in obtaining supplies for an experimental planting can waste an entire growing season). Therefore— ♦ Research organizations require flexibility in making financial and procurement arrange-

Stakeholder participation in governance: • Participation by farmers, agroindustry, and technology transfer agencies— ♦ Focuses research on the most critical national and local problems facing agriculture. ♦ Informs these sectors of new technologies available for transfer and use. • Participation by the broader scientific community (at universities and in the private sector) facilitates research collaboration and enhances scientific rigor in evaluating research programs. • Participation by other government branches (such as the finance ministry) broadens government support and facilitates approval and disbursement of needed funds. • Participation by producers’ associations and other private sector entities helps broaden and diversify funding through grants and research contracts. • Participation by the broadest possible group of stakeholders in program review and approval increases the credibility of the research institution and public appreciation for its work. 1

See the annex for a tabular breakdown of requirements for effective administrative flexibility.

Why Does Autonomy Fail?

•

Many World Bank agricultural research projects in the 1980s and 1990s supported the creation of autonomous research organizations but these efforts have often failed for a number of reasons (see box 2):

• •

• •

Fear by government officials that the NARO might abuse its autonomy.

Institutional cultures too weak to prevent NARO officials from abusing flexibility. Defective design (such as statutes that poorly define roles for the governing body). Flawed implementation (such as government interference with NARO management). External and internal resistance (such as opposition from staff who fear loss of job security).

Organizational Autonomy

Box 2 Why Autonomy Fails In many countries, autonomous NAROs have failed to achieve flexibility and broad stakeholder representation, despite donor pressures. Reasons include: • Fear of abuse. Some government officials fear that autonomous institutions will be free to do whatever they like. Lacking accountability and transparency, research will focus on special interests rather than on national and local farm priorities. NAROs must show that what they seek is functional flexibility rather than true autonomy; that they address national priorities; and that they have transparent systems with effective rules and restraints that guarantee financial integrity and accountability. • Weak institutional cultures. In organizations without strong institutional cultures, giving public managers more flexibility might increase corruption and arbitrary decision making without improving performance. Instead of focusing on autonomy per se, such organizations should strengthen their institutional frameworks for rulebased compliance and financial accountability to improve the performance of, and confidence in, NAROs. • Defective design. Flawed statutes establishing autonomous NAROs can result in: ♦ Inadequate representation on the governing body for non-governmental stakeholders (such as agricultural producers and non-governmental organizations). ♦ Unclear or inappropriate roles for the governing body. ♦ Insufficient separation of the governing body from government departments (such as designation of the line minister as chairperson of the governing body).

♦ Inadequate delegation of powers by the line ministry, inhibiting the NARO from making and following its own business rules and personnel policies. ♦ Unclear roles for the NARO in relation to other components of the NARS. • Flawed implementation. Even a NARO with welldesigned statutes can fail to achieve functional flexibility if: ♦ The government fails to delegate powers specified by its statutes (e.g., government officials interfere in management, especially in staff recruitment and promotion). ♦ Governing body members fail to understand the purpose of the NARO or their own role. ♦ The NARO lacks the confidence to utilize all its powers. ♦ The governing body fails to delegate adequate powers to senior management. ♦ Business rules and policies fail to be drafted or approved. ♦ New business rules and policies replicate the old rules used in line ministries. • External and internal resistance. A newly established autonomous NARO can face resistance from outside and inside the organization if: ♦ Ministry officials see autonomy for the NARO as a loss of power or prestige. ♦ NARO staff see autonomy for the NARO as a loss of automatic salary increases and promotions, regardless of performance, and a threat to job security. To allay their concerns, new rules must provide for salaries and advancement opportunities that are better (especially for high performers) than those in the civil service rules, with adequate safeguards against favoritism or arbitrary personnel decisions.

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Good Practices

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nowing good practices can help project managers design and implement successful autonomous NAROs. These practices, of course, apply to any effective research organization, regardless of the degree of autonomy.

and be buffered from undue political interference. At a minimum, this requires:

Linking Autonomy to Public Sector Reform

•

•

The World Bank is working with client countries to modernize and reorganize the public sector as a whole. The talent that the Bank has in this area should be applied to improving the performance of agricultural research as well. Ongoing public sector reform in many countries might resolve some of the issues that setting up an autonomous NARO is intended to address and might eliminate the need for special status for the NARO. Specific reform efforts for NAROs can benefit from the Bank’s extensive experience in the broader legal issues and alternatives associated with public sector reform. Where broad public sector reform is already under way, those responsible should be consulted.

•

•

A governing body selected first on the basis of professional merit but with attention to representation of major stakeholders Freedom for the governing body to select the chief executive officer (CEO) based on merit. Freedom for the organization, with approval by the governing body, to establish human resources management policies that provide for open, transparent, merit-based recruitment and promotion, including a performance-based evaluation and reward system. Freedom for the organization, with approval by the governing body, to establish business rules for financial management and procurement that ensure accountability and are appropriate to scientific research.

These requirements mean that the minimum level of autonomy appropriate for an effective NARO is parastatal status, although reaching this level of autonomy might take time. If an agricultural research organization acquires a new legal status or becomes an entirely new entity, it should not automatically inherit previous research staff, but rather have the freedom to hire its own staff based on its own human resources management policies. Existing research staff should be evaluated for integration into the new organization according to the same open, transparent, merit-based criteria as all other applicants. Provision should be

Reviewing Autonomy Options There is no single “right way” to develop research organizations. A flexible approach is needed based on the specific country context and the maturity of the existing research organization. Various options for reform should be considered, including external reform pressures such as requiring competition for available public funding. However, for NAROs to be effective, they must have adequate administrative flexibility

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Good Practices

made for previous staff who are not recruited into the new organization. If the new organization will execute research, it should be carefully linked to policy for the NARS as a whole to ensure that its priorities align with the overall national strategy for agricultural research. Links might be established by selecting appropriate governing body members or by targeting the research funds it is provided, in appropriate ways.

Establishing Sound Governance Key to the sound management of an autonomous research institution is an effective governing body. The governing body must be: •

Linking Autonomous NAROs to Clients and other Stakeholders Autonomy does not imply that research organizations have freedom to do what they like. Rather they must be structured to respond to demands from key stakeholders, especially those who fund research and those who are the main clients for the research results. Accountability to funders can be established by various mechanisms, especially competitive funds that require research organizations to compete for funds in an open and transparent process. (Of course, an autonomous funding body is often needed to ensure this). Farmers and other clients may participate at various steps in the research process—research governance, research funding, research execution, and research evaluation—to enhance responsive of research organizations to client needs.

•

• Box 3 Stakeholders to Include in the Governing Body • • • • • • • • •

Ministry of agriculture Ministry of science and technology Ministry of finance Technology transfer agency Agricultural production sector (both large and small farmers) University agriculture faculty Agribusiness sector Scientific community Nongovernmental organizations

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Professional and conscientious. The members first chosen to the governing body must represent the very best talent in order to establish the appropriate institutional culture. To draw on the broadest possible talent pool, international members might be initially considered. An efficient, effective governing body must keep abreast of developments in agriculture, science, technology, and of techniques for technology transfer to farmers. Therefore, provision should be made for members of the governing body to participate in study tours and training. Representative. Although first priority should be given to selection based on professional stature, the governing body should also represent key stakeholders, with a majority appointed from outside of the government (based on nominations of the main non-governmental stakeholders). The board should also be agile, with no more than 15 members (see box 3). Advisory bodies at the national and local level can increase participation in policy decisions. Independent. The governing body should be free of direct control by the government to avoid politicization and favoritism. The chairperson of the governing body should be a distinguished agricultural scientist or manager, but not the minister of agriculture or a deputy. However, the minister of agriculture might name the chairperson. To help ensure continuity, the chairperson should be appointed for a fixed term, independently of the election cycle. To promote institutional renewal, the chairperson should be limited to two terms of about three years. Government officials should be carefully educated on the appropriate role and pow-

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•

Reforminging Agricultural Research Organizations

ers of governing bodies for autonomous research organizations so they refrain from interfering in the workings of the governing body. Well regulated. Statutes for the governing body should clearly state its role in formulating broad policy and priorities for the NARO. However, the board should not interfere in day-to-day management of the NARO, which should be clearly delegated to the NARO’s directors. Provision should be made for training governing body members in the appropriate roles of research organizations and of their governing bodies.

Establishing Sound Management The quality of top management—especially of the CEO—is key to NARO success. The most important first step toward improving NARO performance is often changing the manner of selecting the CEO. Only a highly qualified CEO appointed on the basis of merit will be able to guide the transformation process for a successful autonomous NARO. The CEO must command respect throughout the NARS through a solid record of scientific and administrative achievement, and must have the management and leadership qualities needed to plan effective research programs and inspire high performance. The selection of the CEO is the single most important duty of the governing body. The governing body should have full powers to select the CEO through an open, merit-based process for recruitment. For continuous leadership, the CEO should have a fixed-term (usually 5-year) contract that is renewable. Financial management must be governed by rules and regulations established by the governing body and must be appropriate for effective research management. In particular, the financial system should be flexible enough to release funds in time for scientists to complete their work. For credibility, a NARO needs a financial accounting and reporting system tai-

lored to the needs of a research organization and designed to ensure accountability and transparency. Research requires physical facilities (space, research laboratories, and equipment) for conducting experiments and publishing the results. Research managers should have the freedom, with approval from the governing body, to acquire (and dispose of) capital assets such as land and buildings that are needed (or no longer needed) for sound agricultural research. Effective human resources management depends on the NARO’s statutory freedom to set salary scales and to hire, evaluate, promote, and dismiss staff in accordance with policies tailored to the needs of scientific organizations, and usually quite different from government civil service rules. Clear job descriptions are needed, together with a competitive salary scale, merit-based recruitment and promotion, and an effective evaluation and reward system that motivates excellent performance and disciplines poor performance. Non-monetary rewards should be used, such as public recognition and opportunities for training and travel. Establishing Good Rules of Operation The most overlooked area in setting up effective agricultural research organizations is the need for good rules of operation for financial and human resources management. In creating or reforming an autonomous research body, considerable time and resources are required to prepare appropriate new or revised rules and policies. Local and perhaps foreign experts in this area should be hired as consultants. Rules should be carefully considered, well devised, and thoroughly discussed and justified in order to win maximum approval from all involved in the research organization. To ensure timely formulation of effective rules, those responsible for their elaboration—including the governing body and CEO—must have the requisite skills and experience, including experience outside of the public sector. Those with

Good Practices

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only public sector experience are likely to copy government business rules and policies, defeating one of the main objectives for providing autonomy to the research organization. To prepare for the task of devising good operating rules for the new organization, projects should provide appropriate training and technical assistance. Particular attention should be paid to developing sound practices for human resources management, especially incentive systems. Creating a new research entity with its own personnel policies presents a golden opportunity to start out with the best qualified research staff available and to motivate staff with welldesigned incentives.

tirely dependent on government budget appropriations. Successful autonomous research bodies are usually those that have been able to diversify funding through a variety of mechanisms including successful participation in competitive grants schemes, commercialization of research products, tapping of various types of private funding, such as farm production levies, contracts with the private sector, and joint ventures. Therefore establishment of autonomous research bodies should be accompanied by strategies to diversify funding especially for operating costs. Core government support (such as salaries), should be provided directly from the Ministry of Finance to the research organization.

Developing Institutional Culture

Measuring Performance and Ensuring Accountability

Successful NAROs have positive organizational cultures. Competent, inspired leaders are key (see box 4). The CEO should clearly formulate the mission, vision, guiding principles, and strategies for the organization, with approval from the governing body, in a participatory way that everybody in the organization understands and accepts. In addition, performance-oriented management practices and high performance expectations are necessary for a thriving, productive NARO organizational culture.

Autonomy for the new research organization provides more flexibility, but also demands more accountability to the ultimate objective of any research organization, the generation and utilization of improved technologies to meet societal needs. The funding agency must establish effective mechanisms for measuring performance against societal objectives and ensuring accountability, including: •

Diversifying Funding Sources • In practice, functional autonomy is difficult to achieve for research organizations that are en-

Box 4 Management Style Performance-oriented research managers: • • • • • •

Project vision. Encourage participation. Show flexibility. Rely on teamwork. Promote collective problem solving. Build a collegial atmosphere.

Contractual arrangements based on output produced rather than inputs employed. Appropriate, realistic, and clearly understood performance measures.

To prepare an effective system for measuring performance and ensuring accountability, the project should carefully train appropriate members of the funding body (such as a ministry or research council) in the skills needed to negotiate contracts and monitor performance against established targets for output. If members of the funding body do not already have these skills, the project should move gradually in providing autonomy for the NARO until training is completed.

Project Design for Managing Change ♦ Technology transfer agencies, especially public sector extension if this remains in the line ministry. ♦ National policies to guide the setting of research priorities.

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rganizational reform should not be entered into lightly. Before reforming a NARO, project planners should carefully diagnose its current performance to identify its strengths and weaknesses and to evaluate alternative reform mechanisms. If a need for more organizational autonomy becomes apparent, then change should proceed at a pace that builds confidence and commitment to reform. Expectations for change, in terms of both degree and pace, should be realistically tailored to local conditions, opportunities, and constraints.

Building Commitment An organizational reform project must establish three necessary conditions for success: •

Establishing a Strategic Vision • A first step on the road to reform is to conduct a thorough analysis of current performance by a research institution in order to establish its strengths and weaknesses. Performance analysis will lay the foundation for clear mission and vision statements, which in turn will help to identify the constraints facing the NARO (such as a need for consolidation or greater autonomy) and to design necessary reforms. The strategic vision process cannot occur overnight—it must be carefully tailored to the specific situation and its implementation must often be gradual and long term. The strategic vision for a NARO should: • • •

•

Reform must be politically desirable—the benefits to the leadership and its constituents must outweigh the costs. Reform must be politically feasible—the leadership must be able to enact reform and overcome opposition. Reform must be sustainable over time—its desirability and feasibility must endure, and opportunities for reversal must be limited.

For reforms to succeed, key stakeholders must be convinced that they are really needed and that the changes planned are desirable and feasible. Building a consensus for reform requires considerable time and resources, and should be carefully planned. Consensus building should be fully participatory, involving all stakeholders. Methods such as workshops and consultations should be used, and a local champion or change agent should be enlisted to lead the effort and develop ownership. At the ministerial level—particularly within the ministry of finance—a high level of commitment to reform and ownership of the reform project are essential.

Be part of an overall vision for the NARS as a whole. Establish a clear role for the public sector in agricultural research. Clearly link the new organization to— ♦ Research funding, if it is a separate body for executing agricultural research.

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Project Design for Managing Change

Identifying a Local Change Manager Successful reform depends on the identification of a local “champion”, to help manage the process including providing leadership to the process of developing a strategic vision and building local commitment. External support can be provided to assist in technical analysis or accessing successful examples of change from other countries, but cannot substitute for strong local leadership. The change manager should have good access to political leaders, and should be assisted by task forces who work full time for specific periods to implement the change process. Keeping Expectations Realistic Research organizations depend for success on many factors. Perhaps the most important factor—more important than the organizational type or the degree of organizational au-

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tonomy—is the quality of leadership. An outstanding leader can often create a successful research organization even in organizations without much autonomy. Conversely, autonomous research organizations with poor leadership often fail. Establishing mechanisms for selecting sound leadership must therefore be a reform priority. The reform process will succeed only under favorable conditions that include widespread acceptance and buy-in from stakeholders, which usually takes time to develop. In particular, inspiring a positive organizational culture will take time even after a good leader takes charge. An organizational reform project should therefore plan to devote the time and resources necessary to effect gradual and perhaps limited change in a realistic manner that takes into account local conditions and potential constraints. Successful organizational reform for NAROs is usually a long-term prospect.

Annex Functional flexibilities and delegation of powers needed by NAROs Function

Needed flexibility

Needed delegation of powers

Policy formulation

To develop and approve policies, including research priorities, personnel management, administration, and financial management

From government to governing body

Selection of the chief executive officer

To enable the governing body to openly recruit and to objectively and transparently select the most qualified candidate, free of bureaucratic rules and political interference

From government to governing body

Management

To facilitate management of the NARO within policies set by the governing body

From governing body to directors

International collaboration

To empower the chief executive officer to enter into agreements with international organizations for appropriate research collaboration and scientific exchanges, subject to governing body approval

From government to governing body

Program formulation

To enable directors to develop, with governing body approval, annual research plans in accordance with established policies and priorities

From line ministries/ departments to the governing body, and from the governing body to directors

Funding

To enable the governing body to approve and recommend to appropriate government authorities budget allocations for the NARO, in accordance with guidelines for approved research programs

From line ministries/ departments to the governing body

Program implementation

To enable NARO management to approve, monitor, and evaluate research activities within research plans approved by the governing body

From governing body to directors

To enable the directors, subject to governing body approval, to openly recruit and to objectively and transparently select highly qualified research leaders, free of bureaucratic rules and political interference

From government to governing body

Governance

Research Programs

Personnel Management Recruitment and selection of second management tier

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Annex

Function

Needed flexibility

13

Needed delegation of powers

Recruitment and selection of staff

To enable top management to openly and objectively recruit and select scientific staff based on qualifications

From government to governing body and directors

Incentives/rewards

To develop and implement a system for personnel evaluation and reward that provides salary increments, promotion, and/or nonmonetary rewards based on performance

From government to governing body

Dismissal of nonproductive or redundant staff

To empower the chief executive officer and directors to take appropriate disciplinary action for nonperformers, including dismissal, and to adjust the disciplinary mix in relation to changing program needs

From government to governing body, and through the governing body to directors

Human resources development

To enable selection of scientists for domestic and overseas training, based on merit and skills requirements

From government to governing body, and from governing body to chief executive officer

Procurement of supplies and equipment

To facilitate timely procurement of supplies and equipment according to appropriate internal regulations that ensure rectitude and accountability, but without additional approval from outside

From government to governing body and, up to established limits, from the governing body to directors and scientists

Procurement of personnel services

To engage experts, consultants, and contractual arrangements on terms and conditions established by the NARO

From government to governing body and from the governing body to directors and scientists

Funding

To enable the NARD to obtain funding from various sources, retain earned income, and borrow funds as appropriate

From government to governing body

Disbursement

To enable the governing body to approve, and management to implement, appropriate policies for responsible and timely disbursement of funds to scientists based on approved programs and budgets

From government to governing body and, up to established limits, from the governing body to directors and scientists

Assets management

To acquire and sell capital assets, including land and buildings

From government to governing body

Reporting

To enable management to report income and expenditure based on financial management procedures established by the governing body, and not on government rules

From government to directors

Administrative Procedures

Financial Management