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Klaus Schwab, founder of the World Economic Forum, has launched criminal charges against whistleblowers whose accusations led to his ouster.
Schwab, who founded WEF in 1971, resigned last month after the board began an investigation into his actions, following an anonymous letter claiming he had received inappropriate financial benefits, manipulated the research and wrongly received a false incident of sexual harassment.
The authors threatened to make public on their charges if Schwab remained in his role as chairman of the forum’s councillors.
The 87-year-old claims to fight the allegations “built and built” and informs his lawyers filed complaints for honor and enforcement – both Swiss criminal offences, and a step in which the Geneva prosecutors require police to open a preliminary investigation.
His move complicates the WEF’s difficult transition period as he seeks to maintain the annual event of his signature at Davos’ Swiss ski resort as a must-see gathering for the global elite.
“We’re going to be investigated by this prosecutor now. We don’t know how aggressive they are,” said Schwab, who lives in Geneva. “If they find a systematic attempt to undermine my reputation, this is not comfortable for the board.”
Prosecutors in Geneva did not immediately respond to requests for comment. WEF declined to comment on Schwab’s legal action, calling it a “personally directed issue against unknown whistleblowers.”
The probe, prompted by the whistleblower letter, is the second independent study of WEF culture within less than a year. The first, which ended in March, failed to demonstrate employee claims about workplace discrimination and harassment, identified administrative issues that do not meet established standards, but did not reveal what they were.
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The latest whistleblower accusations include Schwab misusing the forum fund, manipulating the organization’s annual competitiveness report for curry favors with certain governments, and asking staff to promote the Nobel Peace Prize. The letter also raised concerns about how WEF and its leadership treated female employees, claiming that sexual harassment was tolerated under Schwab’s leadership.
Schwab denied all charges against him, but admitted that the episode encouraged pondering about his and his wife’s finances.
He said he had forgotten to pay for the SFR5MN bonus. His salary has not been adjusted for inflation for many years, and he said his wife had worked without pay for decades. He added that when costs such as hotel massages were paid by WEF, he was always refunding the money along with his assistant tracking such expenses.
He was asked what was different, but he said he would have had a more “fun and clear arrangement” regarding his and his wife’s compensation, and he would have encouraged his two children to pursue an independent career instead of working in the forum.
“To me it’s like a family business and you don’t take money from a family business. That could have been a mistake,” he said, adding that he took away his original financial risks and still saw his “baby” and WEF.
Schwab, who resigned as an executive chair before the initial investigation but chaired the council until last month, said he was “not afraid of the outcomes” of the latest investigation. However, he described the prospect as painful, saying, “I’ve been feeling like a defendant for nine months and it’s not comfortable, so I’ve been frankly struggling during the first one.”
He rejected the idea that he should have resigned early as he remained in “good physical and mental health.” He accepted his “time is over” on WEF, and he said “it’s not sad that he left,” but that his departure was “decisive.”
Schwab is now planning to focus on his writing, including memoirs that he said he was quickly tracked down, and books on retirement and longevity in the “intelligent era.”
But he said, even if the situation between him and the board reaches a mutually satisfying solution, “I won’t go to the next meeting in Davos. It has to be a new team that has to show that we can run Davos. I look forward to being in the Seychelles and elsewhere.”
