Klaus Schwab’s sudden departure from the World Economic Forum (WEF), the influential organization he founded and led for over half a century, complicated carefully elaborated plans to persuade Christine Lagarde to take leadership in a soft transition, according to people familiar with discussions.
Schwab, 87, had the initial intention to stay until the beginning of 2027, the same year that the Lagarde’s mandate as president of the European Central Bank comes to an end, but he left last month amid charges of financial misconduct and a conflict with directors of the Forum. He denies any irregularity.
While the council deals with the consequences, he still sees Lagarde as the main candidate and has been holding internal discussions on the subject since Schwab’s resignation last month, according to a person familiar with these conversations, who asked not to be identified. The dilemma is that Lagarde has more than two years in the ECB and has stated that he will fully fulfill his term.
This effectively leaves Wef without a clear choice to lead the organization at a crucial time, having to find a figure that can do everything: reform the institution to deal with sexism and harassment of the Schwab era, while at the same time keeps CEOs paying association rates that generate hundreds of dollars in revenue each year.
Anyone who is chosen will also have to ensure that the WEF Annual Meeting at Davos Ski station remains an event of choice for the world’s financial and political elite.
Lagarde, who began his career as a lawyer, was previously managing director of the International Monetary Fund and Minister of Finance in France, being the first woman to hold both positions. She was appointed chief of the ECB for an eight -year -old non -renewable term in 2019.
Continues after advertising
Former Nestlé President Peter Brabeck-Letmathe, 80, is currently leading the board in an interim way. Its members include influential global intermediates, such as Blackrock CEO Larry Fink, IMF chief Kristalina Georgieva, former US Vice President Al Gore and Lagarde herself. The advice would like to act quickly regarding a nomination, according to the source.
WEF and ECB spokesmen refused to comment.
The WEF also discussed the appointment of Philipp Hildebrand of Blackrock, former chief of the Swiss National Bank, to the Council, to maintain a strong Swiss influence on the group. This would be well received by the Switzerland government, where there is concerns that Schwab’s departure can lead to larger changes and loosen the forum’s ties with Switzerland. Hildebrand, Blackrock and the Swiss government refused to comment.
Continues after advertising
Long farewell
For over half a century, Schwab was the definite force behind the WEF, which he founded in 1971 and is now thirsty in an elegant stone and glass building in the exclusive city of Colongy, overlooking Geneva Lake. It was only in his 80 years that Schwab began to speak publicly about moving away from daily management, despite the fact that frustration had been growing for years among employees about when the founder would finally deliver the reins.
Finally, in May 2024, Schwab announced that he was moving away from active leadership, removing “executive” from his title as CEO to CEO to WEF President Borge Brende, former Norway Foreign Minister. Then, in April, he said he would retire, but his plan was to remain until the beginning of 2027, widely aligned with the end of the Lagarde Mandate in the ECB.
That same month, a bitter internal battle broke out when the board informed Schwab that he had received a letter accusing him of financial misconduct and that there would be an investigation. The news of this letter was first reported by Wall Street Journal. The details of this conflict come from conversations with people familiar with Schwab’s leadership in the forum who requested anonymity when discussing internal issues.
Continues after advertising
Schwab had just been acquitted in a previous harassment investigation, caused by a similar letter in the summer of 2024, and said he would leave office if the investigation continued.
He followed this with an email to the board member, Thomas Buberl, CEO of the insurer Axa, threatening legal action. Buberl and the advice were not intimidated. They called their bluff. Schwab left.
The consequences in the highest WEF levels marked an ignominious outlet for the octogenarian.
Continues after advertising
He denied any impropriety and said that he and his wife, Hilde, have always had the “highest professional, financial and ethical standards.”
In response to questions, he said that “reject the allegations presented in the email of April 16, 2025, from an anonymous source. We believe that the audit and risk committee and the curators of the World Economic Forum have reacted over time in terms of time, also in relation to the term of the new investigation, without a deepened prior discussion.”
All this turbulence occurs at a critical time for the WEF. In recent years, he has defended causes such as diversity and inclusion as part of his self-proclaimed commitment to “improve the state of the world”. But as Donald Trump management actively seeks to dismantle Dei projects, several companies are reducing these initiatives.
Some executives, longtime participants in Davos, also expressed privately frustration with a Dei overload at the event. Instead of workshops on diversity in the workplace, gender and environment, they want the event to focus more on networking – their historical strength – and business.
Still, despite the turbulence, none of the approximately 900 WEF partners have cut funding so far. This money is vital to the forum. Association and partnership payments generated 271 million Swiss francs ($ 324 million) in the last fiscal year, representing more than 60% of total revenue.
“The question is always how strong the personal brand is connected to the corporate brand,” says Johanna Gollnhofer, marketing professor at St. Gallen University in Switzerland. “The organization is clearly in crisis mode and is trying to protect your brand. The research you have launched is an example of this – is sending the message: Look, even if our founder has diverted, you can trust us as an organization.”
© 2025 Bloomberg L.P.
