Gu Bin: Three lessons the AIIB learned after Pickard’s storm in a teacup

  • Gu Bin is an associate professor at Beijing Foreign Studies University, and a China-Forum expert

    The Asian Infrastructure Investment Bank (AIIB, or the Bank), the China-led global development bank, survived its first ever crisis in leadership reputation, following the release of an authoritative investigation report July 7. The report, all-embracing with 36 pages and evidence- and rules-based, reaffirms the Bank’s strong governance.
    The crisis arose upon the resignation of the Bank’s global communications chief, Mr. Bob Pickard on June 12th. He immediately blamed the Bank for its toxic culture under the control of Communist party members, and Canada, his home country and an important member of the Bank, announced to “immediately halt all government led activity at the bank” and probe into his allegations. Canada also sought its allies’ support in the AIIB but in vain.
    The incident of the Pickard betrayal presents three major lessons for better management of an international organization, as well as for the training and education in international civil service.
    Lesson 1 is to develop best practice in crisis management. Appropriate crisis management tests the noble mind, genuine heart and problem-solving wisdom on the part of an organization and its leadership. The Bank was very responsive to the investigating demand of the Canadian government as a 1% shareholder, announcing full cooperation with it. Its Board of Directors additionally initiated an internal review, chaired by the Dean whose institutional mandate of overseeing the President was put into a major test for the first time. This July 7th report officially concludes the internal review.
    This dual track of actions demonstrates a consideration of propriety by the Bank, rather than required by law. It is a token of sincerity to maintain trust and smooth relationships with its member countries. To tackle any defamation, the best method is to maintain transparency — in Benjamin Franklin’s words, “to be concerned in no affairs I should blush to have made public, and to do nothing but what spies may see and welcome”. The crisis has been turned into an opportunity of affirming good governance, since the Bank has “nothing to hide”, and the internal review recommends instituting a crisis response and communications plan.
    Management crisis is not rare these days across international organizations. Kristalina Georgieva of the IMF in 2021, Roberto Azevêdo of the WTO in 2020, and David Malpass of the World Bank in 2022 all used to face distrust and criticisms by big shareholder countries during their tenure, with the latter two even being forced to resign early before their term end. Although Pickard’s allegations “were cast in broad terms and no evidence was provided to substantiate them”, as the internal review concludes, and the incident also proves much less severe in nature (some call a storm in a cup), a deficit of trust has been felt acutely again amid intense global geopolitical rift.
    Lesson 2 is to develop best practice in personnel conduct. International civil servants should adhere to the code of conduct— be loyal only to their organization, and to no other authority in the discharge of their duties. Pickard’s stated motive of betrayal — “As a patriotic Canadian, [resignation] was my only course…. I don’t believe that my country’s interests are served by its AIIB membership” — reflects how contradictory internally this unhappy gentleman was during his short, 15-month service in the AIIB, where he had to swear upon appointment to “regulate my conduct with the interests of the AIIB only in view”.
    Instead, the internal review only proves Pickard as unprofessional and irresponsible during his tenure, and accordingly recommends strengthening the Bank’s pre-recruitment screening processes for leadership positions.
    Indeed, being loyal to the organization does not have to compromise one’s own sense of patriotism. The two lofty sentiments do not have to be of a relationship of dichotomy. Instead, they can be reconciled, and even mutually enhanced, if one is open, tolerant and collegial in an international environment. Indeed, staffs should uphold only the banner of development mission for the Bank.
    In special instances, loyalty to the organization appears conflicting patriotism. For example, a government might seek to instruct international civil servants of its nationality, or to influence him in the discharge of his duty. If so, it poses risks of violating international law on the part of the government, while, for the staff, violating his code of conduct, thus sabotaging the interests or reputation of both. In this light, to maintain independence from government influence safeguards interests of both, and thus serves patriotism.
    Lesson 3 is the need for appropriate understanding of the role of staff who are also CPC members. Another motive of the Pickard betrayal, as alleged, is that the Communist Party of China (CPC) runs or controls the Bank in “one of the most toxic cultures imaginable”, and he does not “want to be a useful idiot”. Pickard’s language reflects a wide and deep bias towards the role of CPC members in a community, besides implicating insults unwisely to his former colleagues in the Bank. Indeed, Sir Danny Alexander, AIIB vice president, refuted that this language did not reflect his own experience working in the Bank since 2016.
    The function of CPC membership in a community is comparable to that of Christianity in a neighborhood. Communist faith motivates one to be a role model in business, just as a Christian does well by doing good and loves his neighbors. In daily operations, Party members perform autonomously, and uncontrolled by the Party; just like a Christian acting on his own, free from God’s intervention. Indeed, CPC membership is common both in the international organizations led by China and those where China acts as an ordinary participant.
    The AIIB is open to theists as well as atheists, while the World Bank should not discriminate among the Evangelical, the Puritan, the Deist, and a Communist believer. Indeed, the personnel codes of conduct of those international organizations all condemn discrimination by virtue of political or religious affiliation. In them a culture of harmony in diversity is the prime, which may be summed up thus: “Find your beauty, and that of others, share the beauty, and achieve unity.”

    (This article was first published on South China Morning Post on July. 16, 2023.)

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