Klaus Schwab has stepped down as the chair of the board of directors of the World Economic Forum after the body he founded launched an investigation into him. Schwab denies the allegations, which include financial fraud, ethical misconduct, and sexual harassment.
The investigation was launched during an emergency board meeting on Easter Sunday, which resulted in Schwab’s immediate resignation from that body. Schwab has already declared his intention to file suit against his anonymous accusers and “anybody who spreads these mistruths,” a Schwab family spokesperson said.
The accusations come in an anonymous whistleblower letter which target not only Schwab but his wife. It was sent to the board last week, per The Wall Street Journal, which claims that “the Schwab family mixed their personal affairs with the Forum’s resources without proper oversight.”
The letter was reportedly from both current and former WEF employees, who write: “We feel compelled to share a comprehensive account of systemic governance failures and abuses of power that have taken place over many years under the unchecked authority of Klaus Schwab.”
Those anonymous accusers allege that Schwab “asked junior employees to withdraw thousands of dollars from ATMs on his behalf and used Forum funds to pay for private, in-room massages at hotels. It also alleged that his wife Hilde, a former Forum employee, scheduled ‘token’ Forum-funded meetings in order to justify luxury holiday travel at the organization’s expense.”
The whistleblower letter also brings up allegations “about how Klaus Schwab treated female employees and how his leadership over decades allegedly allowed instances of sexual harassment and other discriminatory behavior to go unchecked in the workplace.”
The WEF said in a statement that the decision to go ahead with an investigation into their founder was unanimous and that they had consulted their attorneys. Their statement read: “following a whistleblower letter containing allegations against former Chairman Klaus Schwab. This decision was made after consultation with external legal counsel.”
Despite launching an investigation that forced out the founder of the global enterprise, the WEF statement said that the body takes “these allegations seriously, but they remain unproven, and will await the outcome of the investigation to comment further.”
Schwab stepped down from the board on Monday after announcing his intention to depart last year and again earlier this year. Schwab told the board he was innocent of the accusations and would see them in court.
The Schwab family spokesperson said that when Schwab charged massages to the WEF while he was traveling he would pay those charges back and denied that he or his wife abused funds for luxury travel. They also denied the allegations about the cash withdrawals.
The board of trustees is a who’s who of affluent, global, corporate leaders, including the Queen of of Jordan, Salesforce head Marc Benioff, Ayak S Banga who heads the World Bank Group, Thomas Buberl who heads AXA, Larry Fink of Blackrock, the head of the IMF, Al Gore, Rwanda’s Paula Ingabire, head of the European Central Bank, Cindy McCain, Yo-Yo Ma, and others.
