World Economic Forum Profile

The World Economic Forum was founded by Klaus M Schwab, a Geneva business professor. The initial meeting was held in Davos, Switzerland in 1970, under the name of "European Management Forum." It initially brought together some key European corporations with some university professors. These initial discussions focused on improving the condition of European business in the world economy.

From these beginnings, it has gradually expanded, under the direction of Schwab, to take on a broader role in the business world. Key leaders from the other 'trilateral' countries (US and Japan) were the first new invitees. Later, key leaders of large corporations in developing countries were invited. This was followed by additional opening of the forum to limited participation by other religious, governmental, and NGO participation. However, the primary focus remains a forum for the mingling of leaders of the world's largest corporations. The most important event of the World Economic Forum remains the annual meeting, which has been held in Davos every year (except 2002 when it was held in New York City out of sympathy for the terrorist attacks.)

The motto of the World Economic Forum is "entrepreneurship in the global public interest". Though it may appear to have lofty goals, the primary emphasis is on entrepreneurship and business networking. The Forum has, however, created a number of initiatives to better the state of the world. However, these initiatives are often secondary to the business goals that they have come to achieve. The annual meeting


The World Economic Forum is incorporated as a not-for-profit foundation with a headquarters near Geneva, Switzerland. The foundation is controlled by a board of directors (the "foundation board"). This board is responsible for “inspiring business and public confidence through an exemplary standard of governance.” The board is primarily made up of business leaders such as Michael Dell, Peter Sutherland and Carly Fiorina. There are also a small number of other leaders, such as the former Archbishop of Canterbury George Carey and former Mexican president Ernest Zedillo Ponce de Leon. The WEF founder, Klaus Schwab, is also a member of the board. The board is responsible for defining the roles of the WEF and its sub-organizations, appointing new members, monitoring execution of strategies, and managing funds.

Daily operation of the World Economic Forum is provided by a permanent staff. In addition to serving as a member of the board, Klaus Schwab leads daily activities in his role as executive chairman. Working under him are six managing directors, four senior directors, 17 directors, and 13 associate directors. The staff consists of employees from 37 different nationalities. However, most countries are only represented by one or two staffers, Switzerland, France, Germany, Italy, Britain and the United States all have a large number of staffers.


Membership in the World Economic Forum and access to the annual meeting in Davos is by invitation only. In order to be eligible for full membership, a person must be a leader of a corporation with at least one billion dollars in annual sales, or a bank with at least one billion dollars in assets. The company must also be willing to pay the annual dues, and additional dues to attend the annual meeting. Alternate membership and invitation to annual meetings is available via communities or special invitations. The communities include the “Young Leaders” which is one of the most progressive arms of the WEF, and is made up of leaders under the age of 40. The Technology Pioneers are leaders of corporations that have made significant technology innovations. Members of each of these groups are nominated by a WEF committee for a limited time period.

The World Economic Forum has credited itself with some key achievements. As a primarily social institution, its achievements, have primarily involved bringing people together to resolve problems. Some of the achievements include:

Open Forum

The meetings at Davos take place primarily behind closed doors, with only limited access to journalists. In part to counteract this closed nature, the WEF, in partnership with Swiss protestant churches, holds the "Open Forum". The open forum is held at the same time as the annual meeting in Davos and is open to the general public. While tickets are free, only 300 are available for each session, and they cannot be obtained until one hour before the session starts. (Webcasts of the sessions are made available after the sessions are completed.)

The Open Forum is a co-produced by Bread For All, a development organization of the Swiss Evangelical church. Bread For All has carried out projects in many different countries to help reduce inequality and promote development under the banner of "Global Fair Economics". In essence, it does real work to help improve the status of people in developing countries. It actually has been doing work in many of the areas associated with lofty WEF social goals.

Participants in the Open Forum include WEF members as well as many parties that do not a have a significant voice in the WEF, such as churches, NGOS, and nonprofits. Some recent topics have included: "When is the economy ethical?" and "Globalization or Deglobalization for the Benefit of the Poorest?" Sessions typically consist of a moderated panel discussion among 6-8 people, with one or two of the panel members being forum members, and the others consisting of NGO, government, press, and religious leaders. (For example, in the session entitled "Addressing the Role of the United States in world affairs", the panel consisted of a US senator and congressman, two journalists (from Qatar and France), a religious leader, and a WEF member (the CEO of Novartis). Aside from the participants in the panels, most of the Davos conference attendees do not attend the Open Forum sessions.

Year Round Communities

While the annual meeting in Davos provides the splash of the WEF, the year round communities provide most of the ongoing substance. These communities, so named because they provide "smaller, more informal opportunities for interaction" help to enhance the forum's activities by allowing additional voices to be heard. These communities also provide a training ground for future full members of the WEF as well as innovative forums for discussing major issues. As discussed earlier, the Young Global Leaders and Technology Pioneers are two of these communities. Membership in either community requires nomination by a WEF committee. Young Global Leaders are appointed for five year terms, while technology pioneers are selected for three year terms.

Other communities focus on specific interests. The Arab Business Council is made of Arab leaders appointed by the foundation board. It seeks to promote dialog within the Arab business community. The Foundation Leaders community is set up to help guide charitable giving. The International Business Council promotes a pro-business worldwide agenda. The business council has produced documents that in some ways go even beyond the WTO, encouraging free movement of capital and natural persons. Finally, the Industry Governance community focuses on corporate governance issues.

In addition to these major communities, there are other lesser communities that are usually only involved in the annual meeting. These communities are made up of non-business interests that promote social agendas. They include communities of religious leaders, Non-governmental organizations (NGOs) and Labor leaders.


The Forum's funding comes from three primary fees:


Membership at the partner level allows an organization to have greater control over controlling the agenda and activities of the WEF and the annual meeting in Davos. The WEF defines a strategic partner as “select member companies of the Foundation who strongly support the Forum's commitment to improving the state of the world. They are actively involved in the Foundation’s endeavors at the global, regional and industry levels. They contribute their expertise and resources at the highest level in order to advance worldwide economic and social progress.” Thus it appears that though general membership is by membership only, the requirements to be able to set the agenda are more closely related to the willingness to pay to become a partner.


The World Economic Forum has sponsored a number of different initiatives. Initiatives include: Disaster Resource Network, Global Greenhouse Gas Register, Global Health Initiative, E-learning (Jordan Education) Initiative, Partnering Against Corruption Initiative, and the Water Initiative. In addition, a number of initiatives have been created to focus on governance issues, including the Energy Challenges Initiative, Financing for Development Initiative, Global Corporate Citizenship Initiative, Global Governance Initiative and Pension Reform. And finally, some initiatives deal with international dialog, primarily with the Arab world, including the International Monetary Convention Project and the West Islamic World Dialog. The initiatives of the World Economic Forum often have lofty goals. However, there is little required accountability within the WEF, thus the implementation may often become short of expectations.

Environmental Initiatives

The Environment Sustainability Index (ESI) and the Global GreenHouse Gas Registry (GHG registry) are two initiatives that focus on the environment. The ESI was an initiative of WEF 'young leaders community'. In conjunction with academics at Yale and Columbia, they sought to create "a composite index tracking a diverse set of socioeconomic, environmental, and institutional indicators that characterize and influence environmental sustainability at the national scale." This index sought to provide benchmarks and best practices for environmental sustainable development. The index had some intriguing results, with many developing countries ranking higher than the United States in environmental sustainability. However, there are a number of external critiques on the methodology used. Now that the index has been created, the initiative is no longer an active WEF initiative. However, the index is still maintained by the University groups. Thus, the WEF's role was essentially that of a launch partner for an academic effort. (However, the WEF was a highly-interested launch partner that strove to make sure its views were represented in the index.)

The GHG Registry was initially announced at UN Frame Work Convention for Climate Change COP9 convention in Milan, Italy. The registry is supported by a number of charitable, corporate, and non-government organizations. However, as of now, only 13 companies have committed to participate. And, of those 13 companies, only 2 companies have submitted data to the registry. This is in spite of the fact that participation is easy, and data from other agencies, such as the California Climate Action Registry, the Chicago Climate Exchange and the US Environmental Protection Agency Climate Leaders are accepted for submission to the program.

The Global Greenhouse Gas Registry is currently an active WEF initiative. It is a repository for the voluntary reporting of companies' worldwide greenhouse gas emissions. The registry is open to all companies, both those that are members of the WEF and those that are not members. For companies that do not have their emissions verified by a third party, the program has an optional verification component. However, other than this optional verification, there are no other requirements for participation. It is primary a means for reporting the current status of pollution, rather than a means for reducing the pollution levels. Thus, even a heavy polluter that is increasing pollution could still participate in the registry.

The Davos Climate Alliance is a companion to these climate initiatives. The alliance helps to encourage participants in the annual meeting to be concerned about their environmental impact and travel in a 'carbon neutral' manner. It allows green house gas emission credits to be purchased through Swiss Climate Protection Partnership (CLIPP). Furthermore, it has the support of the UN and a number of other organizations

Alternatives to the WEF

The World Economic Forum is an exclusive club, and this exclusiveness has lead to a number of critiques. In response to the perceived lack of voice given to social issues, the World Social Forum has been formed. The Social Forum has taken place primarily in Porto Alegre, Brazil. For five years, it has held an annual meeting near the time of the Davos meeting. Everybody is invited to participate in the Social Forum, and it includes many NGOs and other groups and individuals who focus on human rights and social improvement.


The WEF is the brainchild of a business professor, Klaus Schwab. It has enabled him to hobnob with the many of the world's elite, including heads of countries, businesses, and the United Nations. Thus, for the original founder, the WEF appears to be a wild success. He has created an organization where others are willing to pay for the ability to set the agenda and participate. However, he still serves in a leadership role and has the significant control of the Forum's agenda and activities. He has successfully delegated responsibilities to others, while still maintaining his central control of the organization.

When Schwab initially started up the WEF, it was one of the few large-scale meetings that attracted key business leaders. Consistently having the annual meeting in an isolated, scenic Swiss ski resort has helped to give the meeting a special aura that could attract a large number of leaders on its own. As a critical mass of executives is present, others have joined to be part of a vast networking group. Schwab has played a key roll in the initiation of the Forum and its continued expansion. By delegating the power to set meeting agendas to those companies willing to pay, Schwab has been able to limit any internal jockeying for power, and maintain significant control of the daily operations and continued influence as the WEF's “father figure”.

For most of the other business participants, it has functioned in a manner similar to a fraternity. It enables a mostly homogeneous, mostly male population to meet together in a social setting. Like other fraternities, it has platforms of service and noble agendas. However, the main reason people join is for the social connections. In both the WEF and a fraternity, there are significant fees and requirements for membership. They both have the ability to refuse membership to people that don't share common core beliefs.

The social network at the WEF does give it a significant amount of strength. Business leaders have the opportunity to learn from other leaders. They can also build connections that are needed to accomplish future goals. From the business leaders perspective it is a very useful forum that reduces the necessity of making a number of different trips and social connections. It also takes place in a scenic Swiss ski town, thus giving them time to relax. This exclusive social nature serves as a benefit to those who are invited to attend and present a social message. By eliminating the clutter, those presenters can gain more attention and have their view heard. If forum was open to everybody, the social groups would likely be preaching to themselves.

The actual initiatives of the WEF look good on paper. However, they often have very little impact. Furthermore, they often seem to be reactionary measures. When governments appear to be leaning towards new regulations, the business community releases their alternative to the measure. (The GHG registry is a case in point.) Thus, the WEF attempts to make policy decisions in order to preempt the governments. The initial business-friendly plans they create can serve as an organized framework that can help lead the discussion of favorable future policy.

The World Economic Forum has the potential to be a dominant force in the international circuit. By constraining membership to a limited group of participants, it limits the noise and allows companies to focus on key global business issues. This allows it to potentially be one of the greatest forces in the international community. However, its conservative nature is also a weakness that limits bold initiatives, and instead leads to a slow pace of change. Initiatives to combat poverty or stop global warming have been voiced by the forum. However, the underlying goals appear to be a desire to allow capitalism to function in the best manner possible. As these issues are not yet a serious detriment to capitalistic forces, the desire may be more to “look good” to the press than to actually bring about change.

Furthermore, since the forum has very little control of its members, initiatives will only be carried out by those that desire to do so. It is a friendly environment where world business leaders can candidly discuss their concerns and desires without fear of repercussion. (Many of the sessions at the annual meeting are totally closed to the press.) The ability of leaders to network and learn from other business leaders is a strength of the WEF that cannot be ignored. The capitalist homogeneity encouraged by the organization may be one of the most powerful forces in the world.

- Jeremy Hubble, May 5, 2005

Selected Bibliography

WEF web site (http://www.weforum.org)

Obrien, Timothy. "Can Angelina Jolie really save the world". New York Times. January 30, 2005.

Jha, Raghbendra and Murthy, K.V. Bhanu, "A Critique of the Environmental Sustainability Index" (April 2003). Australian National University Division of Economics Working Paper.

Social Forum website http://www.forumsocialmundial.org.br/