WEF Clears Founder, Klaus Schwab, of Material Wrongdoing

Ndubuisi Francis in Abuja 

In the aftermath of an investigation following allegations of misconduct, the Board of World Economic Forum (WEF) has cleared the founder of the global think-tank, Klaus Schwab, of material wrongdoing.

Although the investigation found minor expense irregularities, WEF said it found no material wrongdoing against Schwab.

The Davos conference organiser also said it was shuffling the leadership of its board in the wake of the probe.

A whistleblower had accused Schwab of financial misconduct – including misuse of WEF funds and inappropriate treatment of employees.

Following a verdict of not guilty passed on Schwab after the WEF’s investigation, BlackRock boss, Larry Fink and Roche vice-chair, André Hoffmann were named as interim chairs of the board.

The WEF board said an internal investigation had not found any evidence of “material wrongdoing” by Schwab and his wife Hilde following accusations raised in a whistleblower letter.

Schwab stepped down in April from the board of the organisation, which runs the annual meeting of political and business leaders in the Swiss ski resort of Davos.

“Minor irregularities, stemming from blurred lines between personal contributions and forum operations, reflect deep commitment rather than intent of misconduct,” the WEF said.

The board noted that it had worked to “address all issues identified throughout the investigation, including strengthening the governance in general.”

The WEF also reorganised its board yesterday, saying that its interim chair and the former chief executive of Nestlé, Peter Brabeck-Letmathe, had stepped down. 

The Wall Street Journal separately reported that Brabeck-Letmathe had resigned earlier this week, noting in his resignation letter that he had personally witnessed a “toxic work environment.”

The organisation was rocked on two fronts, first by claims of a harmful workplace culture last year, and then by a whistleblower letter to its board in April.

The letter had made broad claims against the WEF founder, including that Schwab had misused funds, asked staff to promote him for a Nobel Prize and had influenced the publication of a closely followed competitiveness report to court certain governments.

The WEF hired Zurich-based law firm Homburger and US firm Covington & Burling to investigate the allegations.

Schwab, who had attacked the board over leaks before the investigation was finalised, said yesterday that he was “pleased that today’s decision lays the foundation for the WEF to continue contributing to the positive development of our society in the future, mindful of its more than 50-year history.”

Executives across the corporate world are now awaiting word of who will lead the board. 

Schwab had previously suggested European Central Bank President Christine Lagarde for the role.

Fink, who runs the world’s largest asset manager, and Hoffman, said that they looked forward “to reinventing and strengthening the forum as an indispensable institution for public-private co-operation.”