Davos’ fight for relevance

0:01For 51 weeks out of the year, if you visit the ski town of Davos in Switzerland, my colleague Mercedes Ruehl says it'll feel something like this. It's quiet, it's clean, it's a very small alpine town high up in the Swiss mountains and it's in a big long valley and so you're looking at white peaks. And for most of the year it's known for skiing, hiking and fresh mountain air. But for one week in January, the town transforms. Hello to everyone. Here I am in Davos, Switzerland. In the next couple of days, there will be a lot of discussions, debates, views, analysis produced and debated. It suddenly becomes jam-packed with thousands of the world's so-called elite.

0:55Like the European Central Bank's Christine Lagarde, who you just heard. Business leaders like J.P. Morgan's CEO, Jamie Dimon. Heads of state like Ukraine's president, Volodymyr Zelensky. They all pile in in their parkas for the annual meeting of the World Economic Forum. Over the years, this meeting has played host to some important moments. In the 80s, it hosted a thaw in Greek-Turkish tensions when the country signed a peace declaration. In the 90s, it facilitated Israeli-Arab dialogue after the Oslo Accords. In the 2000s, Bill Gates used the forum to launch major vaccine funding initiatives.

1:35So I do think the WEF is a barometer. It's not a definitive answer about how global power is organizing itself, but it's a good indicator. Next week, the World Economic Forum will kick off its 56th annual meeting in Davos. But Mercedes tells me things have really changed since the days of peace declarations and public health programs. And in a world where there's less cooperation between countries, some are saying that this year could be make or break.

2:05Mercedes Ruehl: Next week's Davos summit really matters. It could be one of the most important in its history. It's a moment that will signal whether the forum still has a future or whether its influence is starting to fade for good.

2:21I'm Michaela Tendera from the Financial Times. Recently, some critics have questioned the World Economic Forum's relevance in a changing world. Today on Behind the Money, as this year's annual meeting prepares to kick off in a few days, we're looking at how this decades-old event has evolved and where it may be headed next.

2:53The World Economic Forum, also known as the WEF, Mercedes tells me, got its start back in 1971, thanks to one guy with a novel idea. So the WEF begins with actually one person, a young German business professor called Klaus Schwab. At the time you had Europe very anxious about things like competitiveness, inflation, a rapidly changing global economy. And Schwab's idea was, it was simple, I guess unusual at the time, and it was to bring CEOs together with policymakers and academics, not to negotiate treaties, but to think a bit more long term about how economies should work. Davos is not a meeting where you have speakers and then you have listeners.

3:41Everybody is an active participant. And here we make sure that all walks of life are involved, not only political leaders, business leaders, but a very important role of... That's Schwab talking there in a promotional video for the WEF several years ago. He wanted companies, Schwab, that is, to think beyond short-term profit and adopt what he, I think, later coined as multi-stakeholder approaches. So business and politics, but also NGOs, entrepreneurs, activists. And then the second part was this having natural ground for that dialogue. So Davos was remote. It was calm in a politically neutral country.

4:26It didn't feel like a mysterious backroom. It forced people who normally wouldn't meet to actually talk. And he wanted this to be a platform of more unusual voices. And that idea from Schwab bringing together various CEOs and policymakers for an open dialogue really did become a reality. And as that all happened, the event's popularity grew. It's invite only, which keeps it kind of exclusive. but it has grown every year and snowballed and expanded where it got to be that even the side events in the village were just as important as kind of the main agenda. So let's say you have like 3 ,000 official invitees but 20 ,000 people coming to Davos for that five days.

5:13When I spoke to someone who has regularly attended over the years, they spoke about, you know, speaking casually with Sharon Stone until she was whisked away by Bill Clinton. Richard Branson offering him a drink at one of the famous bars on the promenade and then asking him to pay. There was this kind of, you know, sense that you could just meet anyone around the corner in Devils. To describe the vibe of this event year in and year out, Mercedes tells me this.

5:46Mercedes Ruehl: The World Economic Forum grew out of the post-war consensus that open markets and global cooperation and market liberalization, that all of these things would make the world safer and richer. For example, the Greta Thunberg House is on Fire speech is something pivotal that happened at Davos that kind of embodied some of those ideals in terms of climate change. Our house is on fire. I am here to say our house is on fire. According to the IPCC, we are less than 12 years away from not being able to undo our mistakes.

6:35So Mercedes, you've been reporting for the FT that the WEF has been struggling to maintain its relevance over the past decade or so. So first, what do you mean by that, struggling to maintain its relevance? And second, why did you find that things started to change around that time?

6:55Mercedes Ruehl: Well, I think Davos has been criticized or dismissed at various points as being just a talking shop. So it's a place where a lot of powerful people talk a lot, but don't actually make decisions or fix problems. Like there's lots of speeches and panels and big ideas, but not much actually gets done. I also think where the criticisms that WEF got kind of, I mean, as someone put it to me, drunk on its own success, particularly from the 2000s, it was getting very popular. Everyone wanted to attend and the fees to get there got higher. And I think what you're getting at was, it was like becoming an event where if like you could afford it, you can be there, you know, you can buy access.

7:40And I think it became less about careful dialogue among people who shape global policy and more about an ecosystem of networking and branding and deal making. And that I think that shift was noticeable in particular of the last decade or two. Personally, I don't think in that the forum lost its purpose completely or anything, but I think everything, it just got a bit busier and the signals a lot noisier. Yeah, you said the fees to attend have gotten higher. How expensive are we talking? Can you give me some ballpark numbers? So the scale of the money involved is actually quite huge. So let's say you've got a corporate membership.

8:18They can range. You're looking at$100 ,000 a year to well over a million for the top tier. If you want to bring extra staff, extra executives, comms teams, additional people cost thousands of dollars. There's like participant passes that I think are roughly like just over a thousand. Yeah, I imagine it's probably also just quite expensive to stay in this small little town and everything that comes along with that. Yes, this is this is one of the criticisms. I actually was speaking to someone recently who was trying to find somewhere to stay. and I think they found a tiny, tiny chalet that was like hundreds of thousands of dollars for just a few days.

9:02I have a friend who has a place in the neighboring ski resort, Closters, and he can hire out his tiny studio apartment and pay his annual mortgage cost for the year on this one week alone. That's insane. It's crazy expensive. Yeah, so how has that affected who's attending?

9:20Mercedes Ruehl: I don't think price is as big a factor as relevance. I mean, I think it's fair to say that sometimes countries or delegations or companies pull back because they just don't see it as essential for them to attend. Some years, there's been a much smaller Chinese presence. Some years, a smaller U.S. presence. Sometimes you see much less Silicon Valley. And I think, I guess this has become more noticeable in the last decade. Plus, there's also all these other events that are competing with Davos now. Beyond these basic questions around competition from other summits around the world, Mercedes tells me that there has been a bigger question around the staying power of the ideals that originally shaped the event.

10:03You could argue, and many do, is that the global era, that kind of embrace of multilateralism and global integration, that era that produced Davos in the first place and allowed it to flourish and keep it relevant is certainly in retreat and you've got protectionism on the rise the great power rivalries and this sense that liberal institutionalism is over so the worldview that made the WEF feel essential is ending.

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11:15So the World Economic Forum has been facing some headwinds. And to make matters more difficult, there's been internal turmoil at the WEF, and it has to do with the organization's founder. So Klaus Schwab, who presided over and was very influential over the WEF for more than five decades, resigned last year. Mercedes tells me that Schwab's resignation is the result of two investigations into his management of the WEF So basically in 2024 there were allegations that things were not so great in terms of overall governance and management of the WEF And that led to an investigation in 2024 Or it ultimately concluded in March 2025 that there were a few issues, but ultimately it was okay and it was fine and Klaus Schwab remained.

12:16Then it was after that that an anonymous whistleblower was sent to the WEF board and it had some very serious allegations against Klaus Schwab. and these included things like misuse of WEF funds for personal expenses, luxury travel, hotel room massages, claims that junior staff were asked to withdraw cash for Shbob. There was these questions about improper mixing of personal and organization finances, mismanagement and ethical concerns, workplace culture. There were a lot more but these are just kind of example. And it wasn't just bad PR. It really struck at the core of what gave WEF legitimacy.

13:06Schwab vehemently denies all the allegations. The WEF board has a law firm conduct an independent investigation. In early August, a report is presented with the findings. No criminal misconduct. But Mercedes tells me the report uncovers a pattern in how Schwab had been running the forum for decades. The report was never actually released, but I did see it. And it was about 36 pages. And it was true that there was nothing in it in terms of criminal conduct. I think what could be argued is it did confirm a pattern by Schwab of unilateral decision making and perhaps maybe some blurred governance that fit with accusations he ran it like a family business.

14:00Mercedes Ruehl: Schwab still maintains that this is a very unfair characterization and that any notion of there having been a toxic work environment was completely untrue. I can, if you read the report, you can kind of see both sides, but it was very clear there was no criminal conduct. As part of this, the WEF pledged to strengthen its governance structures, more oversight, clear separation of things, stricter compliance procedures. The leadership was reconfigured. Schwab was not to return. Larry Fink, the CEO of BlackRock, and Andre Hoffman, the vice chair of the huge Swiss pharmaceutical group Roche, were announced as interim co-chairs.

14:49So Mercedes, 2025 is the first year that the WEF has without its founder. How did that change people's expectations for this year's summit?

14:57Mercedes Ruehl: I think in the summer of 2025, it definitely felt like this was a bit in doubt as the investigation overshadowed and loomed over the WEF. And yeah, I do think there were questions of, you know, if Schwab, the guy who was the brains and the driving force and ultimately really a reason for success is not there. And coupled with some of the other problems we've gone through, does it make sense to go? Is it still somewhere where you can do a year's worth of meetings in a couple days and see the people you need to see that you just have to fly all over the world for? Yeah. All right. So the event's about to kick off soon in just a few days, and you're actually planning to attend and report on things for the FT.

15:45So what's the vibe now?

15:47Mercedes Ruehl: A few days out, there is, I think, a sense of elation. This is looking like there could be some of the highest attendance, both on the corporate side and the political side ever. I think there is a sense almost of incredulity. That's the vibe I'm getting at how much more optimism there is about this year's event. How so? In October, the forum said that registration had reached a record. We now know that we think there are going to be five, possibly six G7 leaders, which has never happened before. U.S. President Donald Trump is attending and with him, he's bringing a record U.S. presence because the delegation is going to have some really top names from the U.S.

16:40Mercedes Ruehl: government. You are also going to have people like Jared Kushner coming, the leaders of Colombia, Argentina, Syria, Qatar, Lebanon, Ukraine. There's going to be a very big Chinese presence. You're also going to have record on the corporate side. From my understanding, more than 850 CEOs and chairs are attending another record. So what do you attribute this change to? I think there are a couple of reasons why we are going to see a record high in terms of attendance. I think one reason is President Trump's presence at the event. He just has a lot of convening power at the moment. But I think also the new leadership have played a big role.

17:26Mercedes Ruehl: From my understanding, I think the new co-chairs have had a big impact on pulling people in. So in particular, Larry Fink, who has an impressive Rolodex, as we all know, has really, really worked hard to bring in the stars. So that brings up another factor for this year's event, the Trump factor. Mercedes, as you say, U.S. President Trump is planning to attend this year's event. This will be his first time attending in person in six years. um what does trump's attendance say about davos's relevance today it's kind of like chicken and egg in a way like you know it's like he's chosen to come because davos is still relevant but davos is relevant because people like trump are coming i think that trump's attendance shows that there is still a power to davos and i think that it shows that this forum can still convene and attract important people.

18:30Mercedes Ruehl: I think it puts a lot of pressure on the WEF and the summit in general in terms of producing results, because there are a lot of things that are going to be covered at this summit, from Venezuela to Iran to Gaza to Ukraine. Those are a lot of problems to try and fix. And it could, you know, maybe we see that things are addressed and plans move forward, or it could be complete chaos. Now, you reported in November that WEF organizers had given assurances to Trump that overtly, quote unquote, woke topics like, say, climate change would not feature prominently at this year's gathering. Could you tell me a little bit more about that?

19:14So we were told by a few people that there had been some negotiations between the Trump administration ahead of his agreeing to come about, I guess, to simply put it, woke topics and to making sure that those didn't feature too heavily. I mean, on one hand, you had people saying that the WEF said yes to the US side, wanting to make sure that his appearance at this elite famously progressive event would play well with his MAGA base. But there are other people who kind of framed it more that the WEF had already become pragmatic about the global geopolitical backdrop and as such was able to offer reassurances anyway.

20:02So, I mean, I think it's kind of one of those situations where maybe both sides came away from the discussion with a different idea of it. But I think what is true is that I'm not so sure this year you're going to see people like Greta Thunberg saying our house is on fire. The WEF, you know, officially said that no government influences its editorial independence or the agenda of our meeting and that it selects all themes and topics based on global relevance. So as we mentioned, Mercedes, you'll be in Davos in a few days to report on all this. What will you be watching for during the week's events?

20:40And I mean, based on this shift. What does this tell us about the longevity of this event after a bumpy 12 months or so? I mean, is Davos saved?

20:51Mercedes Ruehl: Yeah, I think this event is saved, specifically this year. I think in terms of attendance, if it is what the WEF says it will be and what it looks like it will be, it's a definite success. It's about, and it's about convening people, right, and bringing them together. If they bring all the people they say they are, that's a success. I mean, the second part to that is something actually coming from it. And I think that's still very much an open question. I think we have to see how the week plays out if kind of important issues are dealt with and move forward. And I guess then it comes to question, you know, after this event, why do we continue to care?

21:29Many of us are not going to wander around Davos in a big jacket, but I still think the WEF is a barometer and it tells us something about how global power is organizing itself. If it's healthy, if the forum, if WEF is well attended, world leaders, I guess you could argue, still believe in cooperation. Big problems can be solved by sitting around the same table. If it feels like it's becoming more irrelevant, maybe that is a sign of something larger, that global coordination is breaking down, that big countries don't trust each other, that elites are pulling inward, not working together. So I think it reflects kind of larger questions of our era, what direction we're heading in.

22:08Like, are we still living in an age of globalization. I guess Davos provides not the answer, but a clue.

22:40Cheryl Brumley is the FT's Global Head of Audio. Thanks for listening. See you next week.

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