On Wednesday, the World Economic Forum confirmed that it has started looking into accusations against its founder, Klaus Schwab, which are said to have led to his resignation earlier this week. The WEF, in a statement approving a report by the 'Wall Street Journal', the WEF stated its board of trustees "unanimously supported the Audit and Risk Committee's decision to initiate an independent investigation following a whistleblower letter containing allegations against former Chairman Klaus Schwab." Schwab has denied the accusations, according to the report.

The World Economic Forum, which organises the annual gathering of global elites in the upscale Swiss town of Davos, did not initially explain why its chairman resigned suddenly on Monday "with immediate effect." In its first statement, the WEF's board praised Schwab for his "outstanding achievements" during his 55 years at the helm. However, the Wall Street Journal reported that the resignation came after the board decided to investigate claims of financial and ethical misconduct involving Schwab and his wife, Hilde.

The letter reportedly sent by unnamed current and former World Economic Forum staff, "included allegations that Klaus 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." The Wall Street Journal claims to have seen the letter and interviewed individuals with knowledge of the case. "It also alleged that his wife, Hilde... scheduled 'token' Forum-funded meetings in order to justify luxury holiday travel at the organisation’s expense," as per the paper.

The letter reportedly raised issues about Schwab's treatment of female employees and claimed that, under his long leadership, instances of sexual harassment and discrimination were not addressed. Schwab was unavailable for comment, but the report said he strongly denied the accusations and warned of legal action if the board moved forward with an investigation. Nevertheless, during an emergency meeting on Sunday, the board launched an inquiry, and Schwab resigned immediately.

In a statement released on Wednesday, the World Economic Forum (WEF) explained that its decision "was made after consultation with external legal counsel and in line with the Forum's fiduciary responsibilities." The Forum also noted, "While the Forum takes these allegations seriously, it emphasises that they remain unproven, and will await the outcome of the investigation to comment further."

Klaus Schwab had already left as executive chairman last year, with former Norwegian foreign minister Borge Brende taking over the daily operations. Recently, the 87-year-old Schwab announced he would also step down as non-executive chairman, though the transition was set to last until January 2027. The World Economic Forum stated that Peter Brabeck-Letmathe, its vice chairman, will serve as interim chairman while a search committee looks for Schwab’s permanent successor. 

Schwab was born on March 30, 1938, in Ravensburg, Germany. He studied at universities in Switzerland and Harvard in the U.S., earning doctorates in engineering and economics and more than a dozen honorary doctorates. Klaus Schwab was an obscure business professor at the University of Geneva when he founded the European Management Forum in 1971, the predecessor to the WEF. The first meeting attracted fewer than 500 people, but it has since grown into an event that draws thousands annually. Schwab expanded the forum by inviting influential political and business figures and representatives from trade unions and civil society, building a prestigious network and turning the event into a prime networking opportunity.

The WEF "provides a global, impartial and not-for-profit platform for meaningful connection between stakeholders to establish trust, and build initiatives for cooperation and progress." With its mission of "improving the state of the world."

Critics argue that the WEF meetings mainly serve as a platform for the corporate world to influence governments without any accountability. The event has given rise to the term "Davos Man," describing the influential, wealthy individuals with global power who attend. Klaus Schwab and the organisation he created have been frequent targets of conspiracy theories.

Elon Musk, the billionaire owner of X, even stated on the platform that Schwab "wants to be emperor of Earth." In its latest global risk report, the WEF ranked misinformation and disinformation as the top short-term global risks.