In the wake of the WEF's challenges, neutrality and good governance are paramount

Arab News

a day ago

Geneva, Switzerland, is a hub for international cooperation. The city has provided a venue for dialogue among governments and nongovernmental organizations alike since the early 20th century, bolstered by critical aspects of the Swiss DNA: neutrality, good governance and a tradition of dialogue for impact and peace.
Since its founding in 1971, the World Economic Forum, under the leadership of its founder Klaus Schwab, started as a private foundation and eventually became an official Swiss international organization guided by the mission statement: 'Committed to improving the state of the world.' The WEF and its annual gathering in Davos evolved from a European industrial conclave into the world's most influential event for brand building, networking and addressing the topics of the day among political figures, business leaders, NGOs and the social sector.
The WEF today, however, is facing an impasse. As a perceived neutral platform for dialogue, for decades the WEF offered a unique value proposition geopolitically, from the Cold War period through the Middle East peace process and the end of apartheid in South Africa.
This neutrality came into question in 2022 following the war in Ukraine. At that point, the WEF followed political pressure from the US, the EU and Switzerland, turning away all stakeholders, political and civilian, from Russia, thereby taking sides in the conflict and stifling dialogue. When asked directly why the Russians were excluded, one WEF representative at the time cited the excuse that 'Russia invaded a sovereign country' as a justification for the WEF's unprecedented political stand.
This situation has played itself out historically with the US-UK invasion of Iraq in 2003, when moral justifications regarding human rights violations were used on a selective basis to underscore what was later revealed to be the false pretense of weapons of mass destruction. Moreover, without skipping a beat, the following January, the WEF invited the US and UK governments, their allies and other stakeholders to Davos, despite their invasion of a 'sovereign country.'
As a perceived neutral platform for dialogue, for decades the WEF offered a unique value proposition geopolitically.
This fault line is one, which, compared to Western countries, counterparts from the Arab Gulf to the BRICS and the Global South have addressed in a more pragmatic way. Instead of focusing solely on the Western, pro-NATO enlargement narrative, they have considered, rightly, their own business and economic interests and interlinked global geopolitics over the principles of so-called sovereignty and invasion.
In terms of its own internal governance, the WEF has come under scrutiny in the past few years following a series of journalistic reports, notably from The Wall Street Journal, which started with looking into gender and inclusion policies and which ultimately led to the resignation of the founder. In the last month in particular, several alleged governance questions have emerged about Schwab, his family, the board and select members of the management team.
While independent investigations are underway under the eyes of the Swiss authorities, and innocence is presumed until proven otherwise, it is important that these events not neglect a critical aspect: these issues — if true — would not have occurred had proper measures been installed to ensure good governance, checks and balances, and the proper oversight of what is today an official Swiss international organization.
According to the bylaws of the WEF, Schwab has the right to appoint his own successor and either he or a member of his immediate family sits on the board of trustees. Schwab will therefore likely continue to pursue his own case and deny the allegations of wrongdoing that have been lodged to protect his own personal reputation and, even more so, his legacy. The authorities and the current board of the WEF may need to find a compromise, including naming him honorary chairman and/or meeting other demands.
Serious questions must be addressed about how so many alleged internal issues were allowed to precipitate over an extended period without board members supposedly being aware. Beyond the organizational culture that was variably criticized in the media, it appears as though board members failed to ask the right questions or address issues, as did the regulators, in compliance with Swiss law, which mandates regular audit.
The current circumstances should therefore give the WEF pause to pose some of the difficult values-based questions for an organization that is charged with convening the world's elite around the most pressing global challenges. Moreover, the WEF's partners, notably business and wealthy governments, finance its $500 million annual budget. If the WEF is going to continue to accept these financial contributions, it must also be held accountable.
Against this backdrop, and at a moment when global leadership is under great scrutiny and redefinition, multistakeholder leaders have options to choose between myriad different events and initiatives for building their influence and collaboration, ranging from the Milken Institute to the Future Investment Initiative. Now is the time, however, for the WEF to revisit its purpose and decide if it will become one of the many hubs for corporate networking and deal-making or if it will stay true to its DNA: serving as a neutral platform, with good governance and focused on real impact.
• Khalid Abdulla-Janahi, chairman of Vision3, has over 30 years of experience in banking and financial services.