Klaus Schwab has stepped down as chair of the World Economic Forum's board of directors following the launch of an investigation into him.
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Schwab has denied the allegations, which encompass financial fraud, ethical misconduct, and sexual harassment. The investigation was initiated during an emergency board meeting held on Easter Sunday, leading to Schwab's immediate resignation. Schwab intends to file a lawsuit against his anonymous accusers and "anyone who disseminates these falsehoods," as stated by a spokesperson for the Schwab family. The allegations originated from an anonymous whistleblower letter aimed at both Schwab and his wife.
According to The Wall Street Journal, the letter was submitted to the board last week, claiming that "the Schwab family intertwined their personal matters with the Forum's resources without appropriate oversight." The whistleblower letter reportedly comes from both current and former WEF employees, asserting, "We feel compelled to share a thorough account of systemic governance failures and abuses of power that have transpired over many years under Klaus Schwab's unchecked authority." The anonymous sources accuse Schwab of "requesting junior employees to withdraw thousands of dollars from ATMs on his behalf" and misusing Forum funds for private massages in hotels. Additionally, they allege that his wife, Hilde—a former employee of the Forum—coordinated "token" meetings funded by the Forum to legitimize luxury vacation travel at the organization's expense. The whistleblower letter also raises concerns about Schwab's treatment of female employees, alleging that his long-standing leadership permitted instances of sexual harassment and other discriminatory conduct to go unaddressed in the workplace.
The WEF released a statement confirming that the decision to investigate their founder was unanimous and made in consultation with their legal counsel. Their statement elaborated: "This decision followed the receipt of a whistleblower letter containing serious allegations against former Chairman Klaus Schwab." Despite the initiation of an investigation that led to the departure of the global enterprise's founder, the WEF emphasized that "these allegations are serious but remain unproven, and we will await the investigation's outcome before commenting further." Schwab officially resigned from the board on Monday after expressing his intention to step down both last year and earlier this year. He has asserted his innocence regarding the allegations and plans to contest them in court.
In response to claims of misusing WEF funds for personal excursions, the Schwab family spokesperson stated that Schwab would reimburse the Forum for any related expenses and denied any misuse of funds for luxury travel. The allegations concerning cash withdrawals were also refuted. The board of trustees features a distinguished roster of prominent global corporate leaders, including the Queen of Jordan, Salesforce CEO Marc Benioff, Ayak S. Banga of the World Bank Group, AXA's Thomas Buberl, BlackRock's Larry Fink, the head of the IMF, Al Gore, Rwanda's Paula Ingabire, the head of the European Central Bank, and notable figures like Cindy McCain and Yo-Yo Ma, among others.