This paper provides both theoretical and empirical evidence that maintains that a central bank’s organizational structure, culture and learning system are important for achieving best governance practices. It argues that a central bank’s organizational structure and culture facilitate the effective implementation of governance practices that have been enacted by law or in a strategic plan, with specific reference to central bank independence, communication, transparency, professionalization, technical excellence and reputation risk management.

After reviewing the relevant central bank governance literature, a matrix of best practices in organizational culture, structure and learning system, based on the relevant organizational behaviour theory, is presented. This paper contends that a central bank exhibiting best governance practices would, among several other features, have a less hierarchical organizational structure and a more open learning culture. A theoretical framework is applied to the case of the central bank of Morocco — the Bank Al-Maghrib. Qualitative interviews and a review of the bank’s primary documents showed that the progress made by the Bank Al-Maghrib over the last two decades in establishing best governance practices in policies and legal statutes is, to a significant extent, being matched by reforms to its internal processes, but there remains room for improvement.

Drawing from the organizational behaviour and political science literature opens a new avenue of potential research and empirical testing into how to facilitate many aspects of best practice in central bank governance. This is the first working paper of a broader project seeking to conceptualize best practices in central bank governance from an organizational behaviour perspective. 

CIGI Papers present in-depth analysis and discussion on governance-related subjects. They include policy papers that present CIGI experts' positions or contributions to policy debates, and background papers that contain research findings, insights and data that contribute to the development of policy positions.