World Economic Forum - Annual Report 2002/2003

Annual Report 2002/2003

Building trust, peace and reconciliation

Queen Rania of Jordan, member of the World Economic Forum Foundation Board, visits a school information technology lab as part of her project to computerize education. The project introduces IT to students and enhances Jordan’s human resources by equipping the people with the necessary skills to compete in the global economy.

Foundation Board members Klaus Schwab, Executive Chairman of the Foundation Board William I. M. Turner, Chairman and CEO, Exsultate Inc., Canada; Vice-Chairman of the Foundation Board Josef Ackermann, Spokesman of the Board and Chairman of the Group Executive Committee, Deutsche Bank AG, Germany; Vice-Chairman of the Foundation Board Kurt Alig, Chairman, Arcadia Treuhand AG, Switzerland; Secretary of the Foundation Board Peter Brabeck-Letmathe, CEO, Nestlé SA, Switzerland Lord Carey of Clifton, Former Archbishop of Canterbury, UK Victor L. L. Chu, Chairman and CEO, First Eastern Investment Group, Hong Kong SAR (appointed: 21 August 2003) Flavio Cotti, Former President of Switzerland Michael S. Dell, Chairman of the Board and CEO, Dell Computer Corporation, USA Niall FitzGerald, Chairman, Unilever Plc, UK Rajat Gupta, Senior Partner, Worldwide, McKinsey & Company Inc., USA Nobuyuki Idei, Chairman and CEO, Sony Corporation, Japan Caio Koch-Weser, Secretary of State of Finance of Germany Henry A. McKinnell, Chairman and CEO, Pfizer Inc., USA Heinrich von Pierer, President and CEO, Siemens AG, Germany H.M. Queen Rania of the Hashemite Kingdom of Jordan Peter D. Sutherland, Chairman of Goldman Sachs International; Chairman of British Petroleum Company Plc, UK Ernesto Zedillo Ponce de Leon, Director, Yale Center for the Study of Globalization; former President of Mexico

The World Economic Forum is the foremost global community of business, political, intellectual and other leaders of society committed to improving the state of the world

The Executive Chairman’s statement

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Annual Meeting

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Extraordinary Annual Meeting

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The regional agenda

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Task forces and initiatives

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Our members and partners

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Our communities and constituencies

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Our people

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Our organization

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Our financial results

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Our mission and values

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Pictured on the cover from top left are: Supachai Panitchpakdi, Director-General of the World Trade Organization; Luiz Inácio Lula da Silva, President of Brazil; King Abdullah II of Jordan, and US Secretary of State Colin Powell

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Contents

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The Executive Chairman’s statement

Building trust, peace and reconciliation

2002/2003 was another challenging year for the international community, as war in Iraq, instability in the Middle East region and financial volatility continued to threaten global stability. Against this troubled background, the members, partners and staff of the World Economic Forum worked hard towards our goal of improving the state of the world. The Annual Meeting 2003, which returned to Davos after the 2002 sojourn in New York, again demonstrated how the World Economic Forum acts as a platform for addressing challenging ideas and as a prompt to delivering timely approaches to major global issues. Significant outcomes included: • The launch of the World Economic Forum Global Governance Initiative to evaluate progress towards the UN Millennium Declaration goals • The news that US company, Pharmacia Corporation, was to expand access to drugs for the world’s poorest people, particularly in regard to HIV/AIDS medication • The announcement by the Bill and Melinda Gates Foundation of a US$ 200 million donation to establish the Grand Challenges in Global Health Initiative, to research diseases that are a particular blight to the developing world In today’s increasingly complex and interlinked world, global leaders can only resolve major issues and gain strategic understanding by working together. The World Economic Forum’s

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Extraordinary Annual Meeting in Jordan, in June 2003, proved this truth once again. The Extraordinary Annual Meeting provided a timely opportunity for world leaders to come together and progress towards reconciliation and reconstruction, in the immediate aftermath of the Iraq war. As is customary with World Economic Forum events, the Extraordinary Annual Meeting established relationships and communication channels that will endure far beyond the meeting room. In particular, the establishment of the Arab Business Council created an important forum for a community destined to play an integral part in shaping the future prosperity and security of the Middle East. Such Extraordinary Annual Meeting milestones, along with those achieved at the Annual Meeting 2003 and our regional summits, emphasized the continuing relevance of the World Economic Forum in addressing complex issues faced by the global community. Our summits are just one of the ways we deliver value to the senior business leaders that constitute our membership. In 2002/03, we continued to offer structured assistance to help CEOs excel across their key fields of responsibility. For instance, our internal team, supported by industry and academic experts, provided dedicated support in such areas as crisis management, corporate citizenship, global competitiveness and motivational techniques.

His Majesty King Abdullah II of Jordan, left, and Kofi Annan, Secretary-General of the UN, centre, with Klaus Schwab

The World Economic Forum enhanced its credibility as an initiator of private-public partnerships with the August 2003 appointment of Philippe Bourguignon to the Managing Board. Philippe, whose previous roles included being chairman and CEO of both Club Méditerranée and Euro Disney, brings huge international experience in corporate development. Our finances remained stable during the year, despite the effect of a tough economic climate on our members. In the year, our income dropped by 8% to Sfr. 66,454,727, largely reflecting the return to more customary levels of participation in the Annual Meeting, after the hugely increased number of participants in New York. To ensure that the World Economic Forum remains a sustainable and unique organization for its members, in 2002/2003, the Managing and Foundation Boards invested a significant amount of time determining how the organization could improve its services. The resulting strategic plan will be outlined during the next 12 months. The World Economic Forum will continue to develop its offering, as a means of ensuring its members achieve outstanding performance.

In particular, we will continue to provide strategic advantage, by virtue of our role as one of the world’s leading strategic insight bodies. Our determination to increase the value we provide is all part of our commitment to improving the state of the world. We believe this will be best achieved through activities which promote economic and social development: a path that requires the active collaboration of all stakeholders in society. Having built a unique position of trust, over three decades, at the heart of the world’s leadership communities, we believe we are in the best position to bring these stakeholders closer together, both intellectually and geographically. We owe it to our members – and the wider world – to continue finding better and better ways of doing just that. With the Forum so firmly at the centre of world events, it gives me great pleasure to report that the Foundation Board has entrusted me to build further on our success and to use the next five years to transform the Forum into the leading organization dealing with the challenges of the 21st century.

Klaus Schwab Founder and Executive Chairman, The World Economic Forum

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It is testimony to the value we provide to our members that, during the year, additional key members signalled their greater commitment to the World Economic Forum by becoming strategic partners.

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Annual Meeting, back in Davos

Loyola de Palacio, Vice-President of the European Commission, during a session on the volatility of oil prices

In 2003, the World Economic Forum’s Annual Meeting returned to its home in Davos, Switzerland, following its relocation to New York the previous year in the aftermath of the terrorist attacks of September 11. The Davos Meeting was convened in a climate of global uncertainty that had seen the breakdown of trust in many sectors of society. There was little confidence in the ability of public institutions to govern effectively for the global common good and a lack of trust in business’s accountability towards society. There was also rising uncertainty about the consequences of a military conflict with Iraq and over the prospects for the recovery and sustained growth of the global economy. A citizen wears an ‘I love WEF’ sign in his hat during the Annual Meeting 2003 in Davos

Ratio of Annual Meeting participants 2003 Religious leaders Technology Pioneers

NGOs Global Leaders for Tomorrow Academia Other constituents Media Fellows/ Leaders

Business Public figures

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For six days, 2,311 participants, including 24 heads of state and the chief executives of many of the world’s most influential companies, held discussions around the theme of Building Trust. They focused on the key topics of trust and values, security and geopolitics, global governance, prospects for the global economy and corporate challenges. Our ability to bring together leaders from business, government, academia, the media and civil society provided a unique platform for dialogue. Among the participants were high level representatives from 99 countries, with more than a quarter coming from the developing world. They included

Luiz Inácio Lula da Silva, President of Brazil, addresses Annual Meeting participants

Irene Khan, Secretary-General, Amnesty International, UK, during a discussion on identifying priorities

34 religious leaders, 72 NGO representatives, 172 academic experts, 226 public figures and 268 leading editors. For the first time the media group included famous editorial cartoonists whose piercing art has a significant effect on public opinion.

“We need a global development strategy that integrates competition and efficiency with equality of opportunities and solidarity. We need, and we must link together, economic and social policies,” he said.

The crisis in Iraq dominated much of the discussion and eventually led to the convening of the Extraordinary Annual Meeting in Jordan. Post-war reconstruction in Afghanistan was also high on the agenda, with the participation of Abdullah Abdullah, Afghan Minister of Foreign Affairs.

“It is vital that we build a world economic order that can satisfy the yearnings of those billions of people who are today excluded from the extraordinary scientific and technological advances that mankind has achieved.” President Luiz Inácio Lula da Silva of Brazil, at the Annual Meeting 2003

While the Middle East was a major topic, the Annual Meeting was a focal point for discussions on the challenges facing the emerging regional powers. New Brazilian president Luiz Inácio Lula da Silva spoke for many developing nations when he called for international trade agreements to give them greater access to developed markets. From among a strong South American group, President Vicente Fox of Mexico called on participants to exercise ‘economic citizenship’.

In the global corporate arena, trust in large companies has been severely eroded by recent corporate scandals. During the Annual Meeting the results of a survey of signatories of the Joint CEO Statement on Corporate Citizenship, launched in New York in 2002, were unveiled. The results revealed a shift in corporate behaviour, with many companies seeking to further integrate ethical behaviour into their business practices. The survey of CEOs from 16 countries and 18 industry sectors also found that many companies have now established board-level committees to lead their corporate citizenship strategies. www.weforum.org

The presence in Davos of a US delegation led by Secretary of State Colin Powell and leading representatives from the Middle East was a clear demonstration of the World Economic Forum’s unique ability to bring leaders together to seek alternative solutions to global problems.

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Annual Meeting

Heizo Takenaka, Japanese Minister of State for Financial Services, Economic and Fiscal Policy, during a session on putting the Japanese economy back on track

While the Annual Meeting was once again a catalyst for discussion, it also provided the launching pad for significant practical actions to tackle global issues: • The World Economic Forum launched the Global Governance Initiative to evaluate progress in the global effort to implement the ambitious economic, social and environmental goals set out in the United Nations Millennium Declaration

“Social and economic Darwinism destroys trust in

• The Bill and Melinda Gates Foundation announced a US$ 200 million grant to establish the Grand Challenges in Global Health Initiative, a partnership with the US National Institutes of Health. The grant will increase research into diseases that cause millions of deaths in the developing world • As part of efforts to improve economic and social prospects in Africa, more than 50 companies operating in the region signed covenants pledging to follow good corporate governance and promote ethical practices

one another and demoralizes society. The long fight for individual freedoms has ultimately resulted in a boundless egoism.” Pascal Couchepin, President of the Swiss Confederation, at the Annual Meeting 2003

• Pharmacia Corporation, a US-based pharmaceutical company, announced the launch of a pilot model for expanding access to medicines for the poorest populations in the developing world. The not-for-profit programme, in partnership with the International Dispensary Association Foundation, will increase access to medicines for HIV/AIDS

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• Religious leaders from different faiths shared messages of tolerance during a session on coexistence. They agreed that there is no intrinsic reason for people of different religions to be in conflict For more about the Annual Meeting 2003 visit www.weforum.org/annualmeeting

The World Economic Forum continues to seek dialogue with responsible anti-globalization groups. These anti-globalization demonstrators expressed their views outside the Annual Meeting 2003

Thousands of Davos citizens participated in the first ever series of World Economic Forum public debates. The inaugural Open Forum Davos ran alongside the Annual Meeting 2003. It was co-organized by the World Economic Forum and civic society groups, including churches, fair trade organizations and the Swiss Red Cross. The programme of seven debates provided an open platform for frank discussion around challenging aspects of globalization, with topics ranging from ‘Can Globalization be Ethical?’ to ‘Are Children’s Rights Merely for Show?’ The free debates were attended by more than 2,000 people, including local schoolchildren, participating as part of their civic education syllabus. The sessions, which took place in a Davos school hall, were held in German and French, with simultaneous translation. Speakers were nominated by both the World Economic Forum and the participating NGOs. They included leading international figures, such as Peter Brabeck-Letmathe, CEO of Nestlé, and Alec Erwin, South African Minister of Trade and Industry.

The staging of the Open Forum Davos reflected a desire to make a ‘living bridge’ between the main Annual Meeting, critical NGOs and the local community, as a means of making the World Economic Forum’s mission more accessible and transparent. Two peaceful demonstrations, by members of the Open Forum Davos audience, occurred during the course of the programme. One group staged a silent protest, with placards, against globalization and the role of multinational companies, while the second group read out a critical statement during a debate on migration. The Open Forum Davos is set to become a regular feature of the Annual Meeting, with next year’s debates being around the theme of Globalization and Deglobalization for the Benefit of the Poorest.

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Open Forum Davos 2003

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Extraordinary Annual Meeting in Jordan

Paul Bremer, US Chief Administrator in Iraq, was among a high-level US delegation that took part in the World Economic Forum’s Extraordinary Annual Meeting in Jordan

As the aftermath of war in Iraq threatened to destabilize an already volatile Middle East, the World Economic Forum convened its first ever Extraordinary Annual Meeting to provide a platform for peace and reconciliation. Based on the theme Visions of a Shared Future, the meeting took place beside the Dead Sea, in Jordan, under the patronage of His Majesty King Abdullah II and brought together more than 1,200 business, political, religious, cultural and other leaders from 65 countries. The US delegation included Secretary of State Colin Powell, US Chief Administrator in Iraq Paul Bremer, and Richard Lugar, Chairman of the US Senate Foreign Relations Committee. Salam Fayyad, Minister of Finance of the Palestinian Authority, listens to the speech of Shimon Peres (on screen), former Prime Minister of Israel, during the session 'Israel-Palestine: A Vision for the Future’

Extraordinary Annual Meeting participants Religious leaders Technology Pioneers

NGOs Global Leaders for Tomorrow Academia Other constituents Media Fellows/ Leaders

Business Public figures

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Jordan was chosen to host the event because of its location in the heart of the Middle East and its reputation as a regional leader in political and social reform. It has a peace treaty with Israel and maintains friendly relations with its neighbours. This made it the ideal location for leaders to come together to seek solutions to tense issues such as the future of Iraq, Arab-Israeli relations and prospects for democratic reform and economic development. Despite being arranged in just eight weeks, the Extraordinary Annual Meeting created political momentum for change. Among the practical steps taken was the decision to create the Council of 100 Leaders, composed of senior business, religious, political, media and opinion leaders from the West and the Islamic world who are dedicated to strengthening ties and understanding between the two societies.

Andrew Natsios, left, Administrator, US Agency for International Development, and the late Sergio Vieira de Mello, Special Representative of the UN Secretary-General

The Quartet: Kofi Annan, UN Secretary-General; Colin Powell, US Secretary of State; Igor Ivanov, Minister of Foreign Affairs, Russian Federation, and EU High Representative Javier Solana Madariaga

Another significant development was the launch of a US-Middle East Free Trade Area, a regionwide agreement to open trade both with the US and between Arab nations.

The summit also provided a platform for the foreign ministers of Israel, the Palestinian Authority, Jordan and Egypt to present their visions for the future of the region.

Building on the participation of a strong Arab presence at the Annual Meeting in Davos, the Arab Business Council was launched to proactively support responsible reform and more liberal economic policies.

“The summit demonstrated that the effort to build a better world must begin with a joint endeavour to redefine the values that we share. As was discussed during the summit, peace is paramount to business

To reinforce efforts to achieve a lasting peace between Israel and Palestine, attempts were made to broaden support for the Roadmap for Peace, that had earlier been endorsed by the Quartet of the US, European Union, Russia and the United Nations.

in the region and business is paramount to peace.” Kofi Annan, UN Secretary-General, following the Extraordinary Annual Meeting

Although many obstacles to peace and prosperity remain, the Extraordinary Annual Meeting provided a unique platform for leaders from across the region and the world to discuss their differences and, following the disruption of the Iraqi war, to begin planning a more prosperous and secure future for the Middle East. For more about the Extraordinary Annual Meeting visit www.weforum.org/annualmeetingjordan

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The World Economic Forum believes such initiatives are needed to begin to address the economic challenges that are currently facing the region. Despite economic growth, incomes have stagnated following a rapid increase in the population. The region missed out on the boom in foreign direct investment (FDI) in the 1990s and now only accounts for 1% of FDI. Such factors now threaten prospects for improved social welfare.

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South African President Thabo Mbeki, right, listens to the Chief Executive Officer of Ashanti Goldfields, Sam Jonah, during the last plenary session of the Africa Economic Summit in June 2003, in Durban.

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The regional agenda

Encouraging economic and social development

In 2002/2003, the World Economic Forum summits in Europe, the Middle East, Africa, East Asia and Latin America brought together thousands of leaders to define, discuss and advance the key issues in their regions. We also convened specific country-related meetings in Brazil and India.

Asia Pacific and China Our East Asia Economic Summit 2002, in Kuala Lumpur, Malaysia was a launch pad for dialogue, initiatives and commitments on key issues facing the region. The summit’s themes included business challenges, competitiveness, diversity, regional integration, governance and growth. See www.weforum.org/eastasia To further address the challenges posed in the future by the increasingly complex nature of Asian business and diplomacy the summit saw the launch of a community of New Asian Leaders. This group of outstanding young leaders from business, government, civil society and academia are committed to economic and social development in the region. At a retreat in Seoul in 2003 the New Asian Leaders met to review their ‘Blueprints for a New Asia’ and discussed their plans with Korean President Roh Moo-Hyun. The India Economic Summit 2002 focused on economic reforms, trade and investment,

manufacturing industries, financial services, energy and geopolitics. It identified the challenges that the nation must overcome to succeed. The India Advisory Council continued to promote the achievements and progress made in the country. Its enlargement to include non-Indian members, including European, American and Chinese leaders, has increased the council’s global influence. For further information, visit www.weforum.org/india

“I believe Asia’s future rests upon its ability to harmonize the region’s diversified characteristics and to develop a sense of unity and, at the same time, a sense of interdependence.” Thaksin Shinwatra, Prime Minister of Thailand, East Asia Economic Summit

In 2002/2003, China remained one of the world’s most impressive economic performers, enjoying sustained growth, improved competitiveness and a steady increase in foreign direct investment. However, economic activity in the Asia Pacific and China region was severely disrupted by uncertainty surrounding the spread of Severe Acute Respiratory Syndrome (SARS), which also had the effect of forcing us to postpone our China Business Summit. In Japan, deflation remained a major problem and the country continued to struggle with the challenges of globalization. The Japanese sub-group of the New Asian Leaders presented their blueprint for change at the Annual Meeting 2003. Their suggestions included the deregulation of unproductive industries to improve competitiveness.

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Our regional agenda focuses on high priority issues relevant to members operating around the world. In close cooperation with our regional partners, we continued to pursue a programme to encourage each region’s economic and social development.

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The regional agenda Africa and the Middle East The World Economic Forum continued to play a key role in building business support for the New Partnership for Africa’s Development (NEPAD), and its alignment of politicians, business and civil society behind an ambitious economic and social development programme.

“A lot of the world is sceptical about us, believing that we Africans are not serious about ourselves. We have to prove that the will to implement the NEPAD is there.”

To improve the competitiveness of Arab nations and to build a broad-based tier with the West, the Extraordinary Annual Meeting in Jordan became the launch pad for the creation of the Arab Business Council and the Council of 100 Leaders. Despite such efforts, the difficulties in the region were further highlighted in August 2003 when a car bomb attack on the UN headquarters in Baghdad killed 22 people. In a tremendous loss, Sergio Vieira de Mello, a participant in the Extraordinary Annual Meeting and special representative of the United Nations SecretaryGeneral in Iraq, was killed in the explosion.

Thabo Mbeki, President of South Africa, Africa Economic Summit 2003

Europe The NEPAD’s first projects included the E-Schools Initiative, which was launched at the Africa Economic Summit in Durban with the aim of giving the continent’s children the skills they need to prosper in today’s information society. See www.weforum.org/africa The Durban Summit also saw the launch of a drug development collaboration between the Medicines for Malaria Venture and GlaxoSmithKline, while the Global Alliance for Improved Nutrition announced plans to bring food fortified with vitamins and minerals to some developing countries. There was a further encouraging development at the Annual Meeting in Davos when 50 companies operating in Africa pledged to follow good corporate governance and promote ethical business practices. Against a background of war in Iraq and continued tension between Israel and the Palestinians, the World Economic Forum continued to seek solutions to the region’s social and economic challenges. The World Economic Forum’s 2002/2003 Arab World Competitiveness Report revealed that growth had stagnated since the 1980s. Noting the implications of the steep rise in population, the report stressed the need for job creation and improved education systems. We held the first Arab World Competitiveness Meeting in Geneva in September 2002. Over 250 business and political leaders from the region, as well as selected multinational corporations and international organizations, took part. During the event, Arab business leaders pledged 20% of their corporate citizenship or philanthropy budgets to projects aimed at bridging the digital divide between the region and the world’s most developed nations.

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At both the European Economic Summit in Salzburg and our Annual Meeting in Davos we brought together leaders from business, politics and civil society from the European Union and the accession countries to discuss the challenges for the enlarged region. They focused on integrating such emerging regions as South East Europe into mainstream economic activity. To support this goal we convened our first South-East Europe Meeting in Athens. Around 300 business and political leaders from 31 countries, including seven heads of state, participated. We also sought to involve Russia in the future of Europe, promoting dialogue between Russian and European leaders. 2002/2003 was also notable for strengthening links between Turkey and the World Economic Forum. A large delegation took part in the Annual Meeting 2003, including the then prime minister Abdullah Gul and Recep Tayyip Erdogan, Chairman of the AK Parti, who later went on to become prime minister. Turkey was also represented at ministerial level at the South-East Europe Meeting.

North America The US economy remained the main engine for global economic growth driven by innovative technology, as explored in the World Economic Forum 2002/2003 Global Competitiveness Report. At the same time that the Iraq war caused tension around the world, the World Economic Forum provided a vital platform for engagement with the US administration, enabling global leaders to share a frank exchange of views on the conflict and on social and economic issues.

The US demonstrated its commitment to continuing dialogue on both security and the economy at the Annual Meeting, when Secretary of State Colin Powell led a delegation that included five senior members of the administration, among whom was John Ashcroft, Attorney-General, US Department of Justice. At the Extraordinary Annual Meeting in Jordan, Secretary of State Powell was joined by US trade representative Robert Zoellick. The profile of the World Economic Forum remained high in the US following our decision to hold the Annual Meeting 2002 in New York. The success of the Extraordinary Annual Meeting further reinforced the credibility of our mission with business, government, civil society and the media.

Latin America At the Latin America Business Summit in Rio de Janeiro in November 2002, 400 participants from business, civil society, academia and government made key policy recommendations on how Latin America could return to growth.

Following the election of Luiz Inácio Lula da Silva as President of Brazil, the World Economic Forum focused on the challenges facing the country. The Brazil Competitiveness Meeting in São Paulo, in June 2003, provided business and other leaders with an opportunity to meet the new Brazilian Government, to assess the main economic and social challenges and to develop strategies to improve competitiveness. The meeting produced recommendations for the country in the key areas of macroeconomic policies, governance, the legal framework, and technology and innovation. We continued to expand our engagement with leaders in Latin America and for the first time welcomed five regional heads of state to the Annual Meeting 2003 in Davos: Eduardo Duhalde, President of Argentina; Vicente Fox, President of Mexico; Luiz Inácio Lula da Silva, President of Brazil; Alvaro Uribe, President of Colombia and Alejandro Toledo, President of Peru. For more information on Latin America, see www.weforum.org/latinamerica

During the summit more than 100 institutions signed the Private Sector Declaration, which committed them to enhancing the institutional environment, improving social conditions and increasing national competitiveness. Many leaders also called for greater access to developed world markets.

Towards European reintegration

On the agenda for around 300 participants were discussions about the region’s prospects, and an appeal to speed up the process permitting reformminded Balkan states to apply for EU membership. The meeting included a call to the EU and the international community to build on the remarkable economic and political achievements in the region over the past four years. Participants pointed to the fact that the process of European reintegration presents an opportunity for the region to build a common future – although this depends on regional cooperation underpinned by international support. A session entitled ‘How can the region catch up?’ suggested

that institutional reform is vital for economic success. Greece and Ireland were cited as role models for successful growth backed by EU involvement. Zoran Zivkovic, Prime Minister, Serbia; Boris Trajkovski, Many participants took President, FYR Macedonia; George Papandreou, Foreign the opportunity to pay Minister, Greece; Fatos Nano, Prime Minister, Albania; Stjepan Mesic, President, Croatia, and Milo Djukanovic, tribute to Zoran Djindjic, Prime Minister, Montenegro, at the Athens summit the Serbian Prime Minister assassinated on 12 March 2003. Balkan leaders pledged to keep his spirit and vision alive. Zoran Zivkovic, Prime Minister of Serbia, said that Mr Djindjic had laid the foundations of many institutions and his European vision would be realized after his death.

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Thirty one countries, from Croatia to Turkey, were represented at the first ever World Economic Forum South-East Europe Meeting, held in Athens in May 2003.

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Elderly people are leading longer, healthier and more fulfilled lives, with many choosing to study in their later years. But, as a growing number of citizens enter their third age, who will fund their retirement? The World Economic Forum’s Pension Systems Readiness Initiative is assessing how well OECD countries will cope with their ageing populations.

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Task forces and initiatives

An integrated approach to global challenges

Pension Systems Readiness Initiative Increased life expectancy, the impending retirement of the baby boom generation and a falling retirement age are creating unsustainable pressures on public and private pension systems. Although this is a global problem, many countries are approaching the issues of ageing and pension reform in an isolated manner. The Pension Systems Readiness Initiative brings together leaders from the financial services and employment sectors and other interested bodies, such as senior citizen groups, labour unions and governments. As a first step, they will compile extensive cross-country information to assess the readiness of Organization for Economic Cooperation and Development (OECD) countries to face the reality of ageing populations and the pressure this will place on their pension systems, economies and future generations. It is intended that this analytical tool will shed light on the strengths and weaknesses of various national approaches and act as a catalyst for change. For further information on the Pensions Systems Readiness Initiative, see www.weforum.org

Global Health Initiative Diseases such as HIV/AIDS, tuberculosis and malaria kill millions of people every year and damage the economic and social prospects of countries across the developing world. The private sector is a key player in the fight against diseases. Companies can bring significant resources of skills, implementation and access to at risk populations that complement the activities of the public sector and civil society.

“Almost every global business has something it can and should contribute to organizations on the front lines of the global public health crisis.” Rajat Gupta, Senior Partner, Worldwide, McKinsey & Company Inc., USA

The Global Health Initiative is a collaboration between the World Economic Forum’s member companies, such key United Nations agencies as the Joint United Nations Programme on HIV/AIDS (UNAIDS), and the World Health Organization’s (WHO) Stop Tuberculosis and Roll Back Malaria programmes.

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The diversity of our membership provides a unique platform for the discussion, coordination and development of practical projects dedicated to improving the state of the world. Our task forces and initiatives form an integral part of this mission by acting as vehicles for sharing knowledge, views and resources among all involved stakeholders and mapping scenarios for decision-makers.

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Task forces and initiatives The initiative coordinates the private sector interaction with the Board of the Global Fund to Fight AIDS, Tuberculosis and Malaria, working to increase private sector engagement in these public-private partnerships. It seeks to: • Develop tools for businesses to promote good policy and practices within workforces and communities • Foster partnerships to develop policies and programmes • Expand corporate advocacy In 2002/2003, we expanded Global Health Initiative activities in individual countries, linking companies with each other, with non-governmental organizations and with governments in the worst affected nations. Companies began to play a greater part in the fight against the diseases, developing infrastructure and introducing education for their employees, much of which can be expanded to include entire communities. Through the efforts of many companies, hundreds of thousands of people now have access to life-saving medicines and care.

“We must not only increase public awareness about the challenges the world is facing in relation to water, but we must also change the way the water issue is perceived: from being a driver of conflict to being a catalyst for collaboration.” Klaus Töpfer, Executive Director, United Nations Environment Programme,

In 2003/2004 the Global Health Initiative will seek to increase private sector involvement at country-level, complementing such global programmes as the US Presidential Emergency Plan for AIDS Relief and the WHO strategy to ensure three million people have access to retroviral drugs by 2005. For further information, see www.weforum.org/globalhealth E-learning Initiative The Jordan Education Initiative is an e-learning pilot project, involving the national government and World Economic Forum member companies, that aims to deliver e-learning to Jordanian citizens. It brings together leaders from the information technology and telecommunications industries to improve education in the kingdom. The project provides young people with an environment that enables them to pursue their goals through a process of learning and self-determination. Ninety-six schools are piloting the project in Jordan. They will serve as a test bed of how information and communications technology can benefit schools and their pupils. Though focused on developing education, the plan also offers an opportunity to develop the local information technology industry. The initiative supports the government vision of building a knowledge economy by providing lifelong learning opportunities for all its citizens. For further information on the E-learning Initiative, see www.weforum.org

at the launch of the World Economic Forum Water Initiative, June 2003

Achievements of the initiative in 2002/2003 included: • Working with the World Bank and UNAIDS to bring businesses from 15 countries, with high rates of HIV, together in Zambia to share corporate best practice in tackling AIDS • Publishing workplace guidelines on dealing with tuberculosis in partnership with the WHO and International Labour Organization. These guidelines seek to help companies tackle the disease and are available online at www.weforum.org/globalhealth

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Water Initiative Ensuring water resources are managed effectively is one of the key global challenges. In 2003, the World Economic Forum, in association with the United Nations Environment Programme (UNEP), launched the Water Initiative to improve the quality and quantity of water for both businesses and communities. Initiative members include leading businesses, nongovernmental organizations and governments who seek to share best practice and create partnerships for the management of water and watersheds (that is, the area that drains to a common waterway, such as a lake, estuary or ocean).

The Water Initiative aims to encourage private sector participation in the maintenance of watersheds and to put water management at the forefront of economic development. It will serve as an incubator for public-private partnerships that address the importance of watershed management, both for business needs and the environment. The initiative will also contribute to a better understanding of how to structure the costs of environmental services, and establish and promote best practice in the management of watersheds. For more information, see www.weforum.org/water Global Greenhouse Gas Register In consultation with companies, environmental organizations and governments, the World Economic Forum launched a multistakeholder partnership to design and operate a global register of voluntary corporate greenhouse gas reduction targets. By creating a global emission inventory and register, where data and commitments on greenhouse gas emissions can be recorded, we seek to encourage more companies to take early action to measure their emissions and set their own reduction targets.

The initiative involves partners from the business and environmental arenas, including WWF (the World Wildlife Fund), World Resources Institute, Pew Center on Global Climate Change, World Business Council on Sustainable Development, World Energy Council, the International Emissions Trading Association and BrasilConnects. For further information on the Global Greenhouse Gas Register Initiative, see www.weforum.org/ghg Global Governance Initiative The World Economic Forum launched a Global Governance Initiative at the Annual Meeting 2003, to monitor progress towards the ambitious economic, social and environmental goals of the United Nations Millennium Declaration. The initiative involves seven international groups of experts, each dedicated to evaluating the effort and cooperation among the key players seeking to achieve these goals. Targets set out in the declaration range from halving the number of people living in poverty by 2015 to finding ways to eliminate war and the dangers posed by the dissemination of weapons of mass destruction.

Global Information Technology Report The Global Information Technology Report is part of the World Economic Forum’s commitment to helping countries achieve optimum economic performance and overcome barriers to success. In 2002/2003, the comprehensive report assessed 82 economies around the globe to get a clear picture of their readiness for the networked world. Countries were rated according to a Networked Readiness Index (NRI). This measures their degree of preparedness to capture the benefits of a networked economy according to three factors: market conditions, including political and regulatory framework and infrastructure; the readiness of three stakeholder groups – individuals, business and government; and the actual usage of IT. Finland took first place in the index, reflecting good

use of technology by all three stakeholder groups. The US slipped to second place, due to its less competitive performance in terms of connectivity and diffusion of technology. Singapore was third, but ranked higher in terms of government and regulatory backing for IT. Brazil and Finland is leading the way in information technology Estonia also scored well for government support, while Germany topped the league for IT usage by businesses. The NRI was produced in partnership with INSEAD and the World Bank Information for Development Programme (which addresses obstacles facing developing countries in the information-driven world).

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Preparing for a networked society

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Task forces and initiatives The initiative steering committee convened for the first time during the Annual Meeting and will publish its first annual report in 2004. It will assess the steps being taken by governments, civil society, the private sector and international organizations to meet the targets, which have the support of 189 governments.

“Let us try to understand each other. We want peace. So let us do it together, the Jordanians, the Palestinians, the Egyptians, all of us – to have a better future for the children of our region.” Silvan Shalom, Deputy Prime Minister and Minister of Foreign Affairs of Israel, at the Extraordinary Annual Meeting

Global Corporate Governance Dialogue In line with the global focus on corporate governance, the World Economic Forum is planning a series of high-level workshops at its regional summits and the Annual Meeting. These will take advantage of their setting in different regions to explore the international and crosscultural dimensions of corporate governance. For further information on the Global Governance Initiative, see www.weforum.org/globalgovernance Global Corporate Citizenship Initiative The World Economic Forum’s Global Corporate Citizenship Initiative is working to increase business engagement in, and support for, corporate citizenship. It involves 40 member companies and representatives from other concerned organizations. In preparation for the Annual Meeting 2003, the initiative conducted a survey of chief executives who had signed the Joint CEO Statement on Corporate Citizenship, which was launched in New York in January 2002.

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The survey, which questioned chief executives from 18 industry sectors and 16 countries, showed that companies are treating corporate citizenship more strategically than in the past and are linking it to business practices. It also found that citizenship strategy is now increasingly driven at board level. In the survey, 90 per cent of CEOs listed the internal communication of values and policies as a key tool in embedding corporate citizenship. Although managing reputation and brand equity were selected as the most important factors for making the business case for corporate citizenship, attracting, motivating and retaining employees came close behind. For more on the Global Corporate Citizenship Initiative, see www.weforum.org/corporatecitizenship Council of 100 Leaders The Council of 100 Leaders seeks to be the foremost community of senior business, political, religious, media and opinion leaders from the West and the Islamic world who are dedicated to strengthening ties between the two societies. Members of the council met for the first time at the Extraordinary Annual Meeting in Jordan in 2003 to develop a framework for the initiative, which will be formally launched at the Annual Meeting 2004. The council’s mission is to foster a culture of respect and cooperation between the two traditions and so overcome the current tension and mistrust. It seeks to establish a dialogue through a shared commitment to universal values and goals, together with a programme of joint action that will bring clear practical results, transformational change and cooperation. For further information, see www.weforum.org/c100

Global Competitiveness Programme The Global Competitiveness Programme aims to act as a catalyst for economic policy change, by assisting governments in identifying impediments to growth and in designing strategies to achieve sustained economic progress. In 2002/2003, we published a series of reports and held regional and national workshops under the Global Competitiveness Programme umbrella.

concludes that Finland is the country most prepared to capture fully the benefits of the networked economy. In 2002/2003, the World Economic Forum published the first Arab World Competitiveness Report. It showed how growth in the Middle East has stagnated since the 1980s and why, despite its natural resources, the region has failed to capture a greater proportion of international trade and capital flow.

The programme’s flagship publication, the Global Competitiveness Report, was created by Klaus Schwab in 1979. It is the most authoritative and comprehensive assessment of the comparative strengths and weaknesses of national economies. In 2002/2003, the report showed that nations must improve their governance systems if they are to remain competitive.

The competitiveness sessions and workshops held during the Annual Meeting and the regional summits provided an opportunity for leaders from business, government, academia, international organizations and civil society to debate key competitiveness issues, drawing on information from the reports.

However, the programme’s Global Information Technology Report 2002/2003 found that fortunes were reversed in the IT sector where Finland ranked first in terms of readiness for the networked world and the US slipped to second place. It

The World Economic Forum also gave presentations around the world to research institutes and governments keen to strengthen their economies. For further information, see www.weforum.org/gcp

Arab Business Council Building growth in the Middle East

The formation of the council at the Extraordinary Annual Meeting Shafiq Gabr, in Jordan is a Chairman of the Arab Business Council response to the challenges of slow growth, weak investment and perceived instability in the Middle East. The new council’s seven-member executive committee is ready to work with governments to enhance competitiveness in the region, establish constructive dialogue with business leaders in the most developed countries, and integrate the Arab world more effectively into the global economy.

The council is committed to promoting global best practice in the Arab business sector, and has adopted stringent standards on accounting, corporate social responsibility and combating corruption and bribery. It will also advise the World Economic Forum on issues of key importance to the Arab world for inclusion in the agenda of the Annual Meeting. The council will seek to take advantage of the opportunities offered by the new US-Arab Free Trade Agreement that has been proposed by the US administration to provide a platform for sustained growth. Two international private sector meetings are planned for the 2003/2004 financial year in order to open dialogue with governments and business sectors in the US and the European Union.

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More than 50 leading companies, in association with the World Economic Forum, have united to form the Arab Business Council.

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The United States remains the powerhouse of the global economy, according to the World Economic Forum’s Global Competitiveness Report 2002/2003.

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Our members and partners

The World Economic Forum brings together major businesses to work with all stakeholders in civil society to promote economic and social development. Our members and partners represent all sectors and regions of the global community. Members Although our members are drawn from the world’s top 1,000 companies, we reserve 35% of places for those from the developing world. Our members help guide our work, and provide financial and in-kind support to develop our activities. They benefit through their involvement in our events, communities and initiatives. Our members represent a diverse range of experience and opinions. They come from 25 different industry sectors and are based in every part of the world. This is why the World Economic Forum is a neutral organization which does not make public statements on behalf of its members. During 2002/2003, the following companies were accepted as members of the World Economic Forum: Activision Inc., AEA Investors Inc., Aegis Group Plc, African Rainbow Minerals Gold (ARMgold), Akin, Gump, Strauss, Hauer & Feld LLP, Alshaya Group, An-Nahar Group, Autostrade SpA, Banca Intesa SpA, Bank of China, Bolsa de Mercadorias & Futuros (BM&F), Brasil Telecom SA, British Columbia Lottery Corporation (BCLC), BUPA (British United Provident Association), Business Objects SA, CH2M HILL Companies Ltd, China

Netcom Corporation Ltd, Computerland SA, Cotecna Inspection SA, Dow Chemical Company, Dubai Development and Investment Authority, Empresa Periodistica El Mercurio SAP, Eurazeo, Exel Plc, Findus AB, Forrester Research Inc., France Telecom, Gemplus International SA, Georgetown University, Hellenic Telecommunications Organization SA, ICICI Bank Ltd, Imax Corporation, Industrial and Commercial Bank of China, Ingram Micro Inc., Institute of International Finance, Invensys Plc, Investissement Québec, Italtel SpA, J. & W. Seligman & Co. Inc., KT Corporation, La Poste, Lloyd’s of London, Malaysia Airlines, Manugistics Group Inc., Millennium Pharmaceuticals Inc., Mohammed Abdulmohsin Al-Kharafi & Sons WLL, Moore Capital Management, National Commercial Bank, NetJets, Oil and Natural Gas Corporation Ltd, Pacific Basin Economic Council, Petrol Ofisi AS, Portugal Telecom SGPS, SA, Quantum Corporation, Renaissance Re Holdings Ltd, Royal Jordanian Airlines (ALIA), SAS Institute, Sealed Air Corp., Shenzhen Development Bank Co. Ltd, Siemens Corporation, Silver Lake Partners, Star Group Ltd, Supreme Economic Council, Taiwan Power Company, Telecom Italia Mobile (TIM) SpA, The Bear Stearns Companies Inc., The Shorenstein Company LLC, The Timberland Company, Underwriters Laboratories Inc., Union Bank of Nigeria Plc, United States Postal Service and the Youssef El-Khereiji Group of Companies.

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Entrepreneurship in the global public interest

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Our members and partners

Partners Our strategic partners are key companies that are particularly deeply involved in the activity of the World Economic Forum. They ensure the agenda reflects business concerns, help launch our task forces and initiatives and provide people for specific projects, to serve on steering committees or take project management responsibilities. They also contribute significant financial resources. There was a special partners meeting in spring 2003, to test our strategy.

Co-chairs of the Annual Meeting: Junichi Ujiie, President and CEO, Nomura Holdings, Japan; Bertrand Collomb, Chairman and CEO, Lafarge, France; Henry A. McKinnell, Chairman and CEO, Pfizer, USA; Philip M. Condit, Chairman and CEO, The Boeing Company, USA (also co-chair of the Extraordinary Annual Meeting)

“Stimulating faster economic growth in developing countries is essential to enable sustained global economic growth. It is in the mutual interest of developed and developing nations. It is also key to sharing the benefits of global growth more equitably.” International Business Council trade task force statement, March 2003

As of 30 June 2003, our strategic partners were: ABB, Accel Partners, Accenture, Apax Partners, A.T. Kearney, Audi, Bain & Company, Barco, The Boeing Company, Bombardier, Booz Allen Hamilton, BP, Cisco Systems, The Coca-Cola Company, Deloitte Touche Tohmatsu, DHL, Ernst & Young, HP, IBM Corporation, KPMG, Kudelski Group, McKinsey & Co., Merck & Co. Inc., Merrill Lynch, Microsoft Corporation, Nestlé, PepsiCo, Pfizer, PricewaterhouseCoopers, Sara Lee Corporation, Siemens, UBS and Volkswagen.

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Four of the co-chairs of the Extraordinary Annual Meeting: Peter Brabeck-Letmathe, Vice-Chairman and CEO, Nestlé, Switzerland; William R. Rhodes, Chairman, Citicorp and Citibank and Senior Vice-Chairman, Citigroup, USA; Khalid A. Alireza, Chairman, Xenel/Saudi Cable Company, Saudi Arabia; Carly Fiorina, Chairman and CEO, HP, USA

Membership development The World Economic Forum’s members encompass not only the largest companies in the world but also those that are regional and industry leaders. Our membership criteria remain strict and, during 2002/2003, the World Economic Forum not only welcomed 91 new members but also refused membership to companies that did not meet our criteria. Despite the difficult economic conditions we enjoyed the support of 15 new partners in 2002/2003. Several of these were previously members who had decided to strengthen their ties with the World Economic Forum.

Our communities and constituencies

The special commitment of the business community

A key part of World Economic Forum activity is the creation of communities of member and partner companies. We have developed specific expertise and capabilities to foster and support these communities and to encourage interaction between them whenever relevant and worthwhile.

The International Business Council The International Business Council (IBC) consists of 100 highly influential, concerned and committed chief executives. It identifies and addresses globally relevant business issues and acts as an advisory body, providing intellectual stewardship to the World Economic Forum. In 2003, the IBC created a task force of four members, Niall FitzGerald, Peter BrabeckLetmathe, Josef Ackermann and Henry A. McKinnell, which was given the responsibility of elaborating its policy on trade. Its statement calling for significant breakthroughs in the Cancun Ministerial Meeting of the World Trade Organization was sent to the heads of state of the G-8 nations. At the Extraordinary Annual Meeting in Jordan the IBC released a statement on the commitment of business to the peace process, appealing to governments to use their power and influence to establish peace throughout the Middle East. IBC steering committees for Asia and for healthcare met for the first time in Davos in January 2003 with the aim of giving strategic guidance to the World Economic Forum. Following a debate at its summer meeting, the IBC developed a statement on corporate governance for use by members in discussions with officials and regulators.

Industry Governors Industry Governors’ groups are made up of CEOs selected from influential companies within a range of industry sectors. These fall under the general categories of basic industries, communications and technology, consumer goods and health, and financial services and transportation. The Governors aim to provide informal, efficient frameworks for an exchange of opinions on global issues of concern to specific sectors. They provide intellectual stewardship to our efforts, such as industry-specific initiatives and task forces and industry-targeted sessions and events.

“We appeal to governments to use their power and to fully commit to establishing security and lasting peace in the whole of the Middle East.” Peter Brabeck-Letmathe, Vice-Chairman and CEO, Nestlé, on behalf of the International Business Council Trade Task Force, at the Extraordinary Annual Meeting

At the Annual Meeting 2003, the Governors met to discuss the global issues facing such sectors as the mining and metals industries, healthcare and professional services. These discussions were preceded by a series of preparatory meetings to confirm the Governors’ agenda. Preparatory meetings for the chemicals, energy, communications and technology, finance, aerospace, travel and tourism, and logistics and transportation sectors were held in Geneva. A similar meeting for the engineering and construction industry was held in London and another for the automotive sector took place in Paris.

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Communities

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Our communities and constituencies

Jonathan Zapiro, Editorial Cartoonist, South Africa, at the Annual Meeting 2003

Constituencies The World Economic Forum’s constituencies are individuals and organizations that are drawn from all sectors of society and represent a rich source of expertise and information. Advisory Groups Our Advisory Groups range from religious leaders to non-governmental organizations, from academic institutions to trade unions. In 2002/2003, a new group was created representing philanthropic bodies called the Global Foundation Leaders’ Advisory Group. The purpose of the Advisory Groups is to assist other key stakeholders in the global economy to engage in, and help shape, World Economic Forum activities.

“There is immense unrest, injustice and inequity in our world. These circumstances demand the emergence of

The Forum Fellows are at the cutting edge of their disciplines. They contribute ideas, in-depth knowledge, new ways of tackling problems and sound advice throughout the year. While some fellows are drawn into activities only when their expertise is required, around 50 constitute the core of the community and are heavily involved on a regular basis. Global Leaders for Tomorrow The Global Leaders for Tomorrow (GLT) programme is designed to bring together young leaders from fields ranging from the arts and media to business and politics – what they have in common is a visionary approach. The object is to provide a fresh view of global issues, and to think creatively. The members propose task forces and initiatives that support our mission of improving the state of the world. In 2003, they focused on such issues as access to water, the characteristics that make strong women leaders and measuring the impact of philanthropy.

a new breed of moral leaders who are committed to developing innovative, sustainable and tailored approaches to addressing the most pressing problems.” Ndidi Okonkwo Nwuneli, Founder, LEAP Africa, Nigeria, Global Leader for Tomorrow 2003

Forum Fellows Intellectual capital is very important to the World Economic Forum and much of it is provided by our Forum Fellows, a group of around 1,500 scientists and experts from a variety of fields.

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The GLT community’s annual summit was based on the theme of Leadership: Yesterday, Today and Tomorrow and examined how attitudes to leadership have changed in the last decade. Many GLTs were also active participants in the Annual Meeting 2003 in Davos. This year 100 new members were selected, marking the community’s tenth anniversary. Many earlier GLTs have gone on to become household names, including Bill Gates, Chairman of Microsoft Corporation, Tony Blair, Prime Minister of the UK, and the composer and singer Bono.

Technology Pioneers The Technology Pioneers programme has matured significantly since it was established in 2000. Members of this community represent the cream of global talent in the fields of information technology, biotechnology and renewable energy. Their aim is to provide alternatives to accepted wisdom, as well as to keep the World Economic Forum informed about emerging technologies likely to have an impact on how business and society operate. In 2002/2003, 40 new Technology Pioneers were selected from among the chief executives of the most innovative technology companies in the world. For the first time, Technology Pioneers formed part of the official Annual Meeting programme, and their sessions on IT, biotechnology and energy were well attended and stimulated lively debate. From 2004, this heightened profile will be extended to include an annual Technology Pioneer event at a regional summit. Dialogue with NGOs In 2002/2003, the World Economic Forum continued to build strong relationships with non-governmental organizations (NGOs) and sought to integrate their views into its activities. NGOs played an active part in our regional events, 72 took part in the Annual Meeting and many were involved in our initiatives and task forces. For example, WWF has worked with us on environmental issues while Amnesty International and Oxfam contributed to the World Economic Forum’s 2003 Global Agenda Monitor.

We continued to seek constructive dialogue with anti-globalization groups, participating in meetings with the World Social Forum. Social Entrepreneurs The Schwab Foundation for Social Entrepreneurship consists of about 70 individuals and organizations that use innovation to create social value, with wealth creation as a means to that end. The Foundation was created by Klaus and Hilde Schwab in 1999. It is independent but works closely with the World Economic Forum to provide a global platform to promote the benefits of social entrepreneurship. Members of this community are united by their commitment to working for the public good, whether through profit-making or not-for-profit organizations. Social Entrepreneurs are pioneers and innovators. They challenge the usual or ‘inevitable’ and identify pattern-breaking approaches to resolve seemingly intractable problems, using new processes, services, products or new ways of combining proven practice. The vast majority of Social Entrepreneurs are educated professionals, such as medical doctors, engineers, scientists, economists, management specialists and lawyers. Their commitment to creating social value colours the way they use their expertise and talents.

Social Entrepreneurship Empowering African businesswomen Yitamben carried out a study for the African Development Bank in 1986, which revealed that women entrepreneurs in Africa had no access to credit. Their businesses were too small and they could not provide collateral. Moreover, in Cameroon a combination of discriminatory traditional laws and a lack of government support prevented women’s economic empowerment. ASAFE strives to enable women entrepreneurs to seize emerging opportunities, building competency in management, bookkeeping and marketing. Many of its 5,000 members have created flourishing microenterprises. Using information and communication technology, ASAFE has brought its entrepreneurs closer together and connected them to larger markets.

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Gisèle Yitamben is one of the outstanding individuals in the Schwab Foundation for Social Entrepreneurship network. Her Association pour le Soutien et l'Appui à la Femme Entrepreneur (ASAFE) provides business training and development services, alternative financing and access to e-commerce for thousands of women entrepreneurs in Cameroon, Guinea, Benin, Chad and the Democratic Republic Social entrepreneur of Congo. Gisèle Yitamben

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The Forum blends the best of the private and public sectors to create a unique culture, boosted by the dynamism and youthfulness of a multicultural staff.

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Our people

Our people: a wealth of diversity and talent

In 2002/2003, our people continued to reflect the international nature of our organization, with representatives of 32 different nationalities. This cultural diversity was invaluable as we sought to work with our partners and members around the world. The World Economic Forum continued to be a young, talented organization with the average age of our people being 36 years. However, it is important to balance the fresh thinking that comes with youth with the experience of those who have spent many years working in the international business and governmental arena. This blend of experience can be seen in the breakdown in ages of our staff. The skills and high qualifications of our staff is clear from the fact that two-thirds of the 159 people who work for the World Economic Forum hold university degrees. The remuneration policy in 2002/2003 continued to reconcile our status as a not-for-profit foundation with our aim of attracting the best people. We also continued to encourage staff to take part in external social, cultural and sporting activities provided there was no conflict of interest.

Nationality

Numbers

American Armenian Australian Belgian Brazilian British Canadian Chinese Cypriot Costa Rican Danish Dutch Finnish French German Indian Iranian Irish Italian Ivorian Malagasy Malaysian Mexican Moroccan New Zealander Norwegian Polish South African Spanish Swedish Swiss Thai

22 1 3 1 3 7 4 1 1 1 2 2 1 22 12 1 1 2 9 1 1 1 1 2 1 3 1 1 4 3 43 1

Nationalities

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Age Group 20 25 30 35 40 45 50 55 60 65

to to to to to to to to to or

Total

24 29 34 39 44 49 54 59 64 older

Numbers 1 44 47 22 14 8 7 8 7 1 159

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The World Economic Forum’s reputation depends on its values, its ability to generate knowledge and strategic insight, and the skills and expertise of its staff.

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Our organization

World class governance

The World Economic Forum is striving towards a world-class corporate governance system. In 2002/2003, we completed the dual implementation of a new system of corporate governance, which is rooted in our operational and strategic approach. We will continue to review and adapt the World Economic Forum organization to ensure we remain responsive to the needs of our stakeholders.

“Global governance should not be based on rules or power. It should be based on values.” Bertrand Collomb, Chairman and CEO, Lafarge, France, at the Annual Meeting 2003

The Foundation Board The Foundation Board is currently made up of 18 eminent individuals from business, politics, academia and civil society, each serving a three-year term. The Board acts as the guardian of the World Economic Forum’s mission, values and brand, inspiring business and public confidence through an exemplary standard of governance. This includes: managing the statutes of the World Economic Forum and its institutions; defining the powers of the Committees and of the Managing Board; appointing new members; reviewing fund applications; and determining and monitoring the execution of the World Economic Forum’s strategies.

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The membership criteria include integrity, global vision, leadership experience and participation in world affairs. The Foundation Board members for the year 2003/2004 are: • Klaus Schwab, Executive Chairman • William I. M. Turner, Vice-Chairman • Josef Ackermann, Vice-Chairman • Kurt Alig, Secretary • Peter Brabeck-Letmathe • Lord Carey of Clifton • Victor L. L. Chu • Flavio Cotti • Michael S. Dell • Niall FitzGerald • Rajat Gupta • Nobuyuki Idei • Caio Koch-Weser • Henry A. McKinnell • Heinrich von Pierer • H.M. Queen Rania of the Hashemite Kingdom of Jordan • Peter D. Sutherland • Ernesto Zedillo Ponce de Leon At the Foundation Board meeting of 21 August 2003, members accepted the resignation of Graça Machel, who stepped down due to other commitments.

Practice Structure In 2002/2003 the World Economic Forum organized its work into three integrated practices. The Centre for the Global Agenda The Centre for the Global Agenda (CGA) monitors and analyses global issues to provide content for the World Economic Forum’s annual, regional, country and industry meetings. It stimulates thinking and dialogue by organizing task forces and other initiatives involving different regions, intellectual disciplines and stakeholders in the world economy. The CGA also manages the World Economic Forum’s engagement with its constituencies, including the academic and scientific communities, business trade bodies, international organizations, labour leaders, non-governmental organizations, religious leaders, Technology Pioneers and Global Leaders for Tomorrow. For more information, see www.weforum.org/globalagendamonitor The Centre for Global Industries The Centre for Global Industries (CGI) handles relations with the World Economic Forum’s membership. The CGI is organized into five broad industry groupings, to allow the development of expertise and special relationships with members, covering: basic industries, communications and technology, consumer goods and health, financial services and mobility industries.

The Centre for Regional Strategies The Centre for Regional Strategies (CRS) provides members and constituents with a series of outcome-oriented summits in markets of major strategic interest. It builds regional and national communities of leaders drawn from business, politics, academia, religion, media and other areas of civil society who share the World Economic Forum’s mission. The regional summits allow members and participants to share, face-to-face, information and insights on key developments and trends of regional significance. They also give the issues an audience which extends to all stakeholders of global society. CRS works closely with both CGA and CGI, with the regional summits serving as a platform for the World Economic Forum’s global initiatives. An evolving structure To better serve our members and constituents, we are evolving the practice structure described above. In the coming year, we will reshape the organization to further improve our ability to: build and energize the top global communities; convene world leaders in the highest level meetings and interaction; serve as the creative force shaping global, regional and industry agendas, and enable world leaders to take joint action through global initiatives and partnerships. The adapted structure will be built around groups dedicated to each of these objectives and will continue to operate in an integrated and seamless manner.

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The Committees of the Foundation Board The Foundation Board appoints four committees from among its members: • The Executive Committee prepares the decisions of the Foundation Board and oversees the Managing Board • The Audit Committee ensures compliance with all financial, accounting and control processes • The Evaluation and Remuneration Committee recommends candidates for positions on the Managing Board and monitors their performance • The Mission Compliance Committee reviews Forum policies, strategies and activities in light of its mission

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Our organization

The 2002/03 World Economic Forum Managing Board. From right, José María Figueres, Philippe Bourguignon, Klaus Schwab, Frédéric Sicre, Rick Samans, André Schneider and Michel Ogrizek

The Managing Board The Managing Board acts as the executive body of the Foundation. It ensures that activities fulfil the mission of the World Economic Forum and acts as its representative to outside parties. The Managing Board members for the year 2003/2004 are as follows: Klaus Schwab Executive Chairman and Founder, aged 65 Qualifications: Swiss Federal Institute of Technology and the Universities of Fribourg and Harvard. Degrees include Doctorates in Mechanical Engineering and in Economics (summa cum laude). Taught business policy since 1969 and has been a Professor at the University of Geneva since 1972. Author of several books, the yearly Global Competitiveness Report (since 1979) and many other publications. Founded the World Economic Forum in 1971 as a not-for-profit foundation, building it into the foremost global partnership of business, political, intellectual and other leaders of society committed to improving the state of the world. Recipient of numerous academic and international and national honours for initiatives undertaken in the spirit of entrepreneurship in the global public interest and for peace and reconciliation efforts in several regions. José María Figueres* Senior Managing Director, aged 49 Qualifications: Bachelor’s Degree in Engineering in 1979. Joined the United States Military Academy (USMA) at West Point in 1991 followed by MPA, Kennedy School of Public Administration, Harvard University.

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Positions held: General Manager, Fibers of Central America, 1980-84. President of the San Cristobal Agroindustrial Group from 1984-87. Minister of Foreign Trade for Costa Rica, 1987-88, becoming the Minister of Agriculture from 1988-90 and President of Costa Rica from 1994-98. Joined the World Economic Forum in 2000 as Managing Director. Additional posts held: President of the Board of Leadership in Environment and Development (LEAD), Member of the Board of Directors: World Resources Institute (WRI), Stockholm Environment Institute (SEI). Philippe Bourguignon** Senior Managing Director, aged 55 Qualifications: Master in Economics, University of Aix-en-Provence and a postgraduate diploma from the Institut d'Administration des Entreprises, Paris. Positions held: Set up vacation hotels in Africa and the West Indies, 1971-74. He worked for Accor Group for 14 years: 1974-76, Vice-President, Development, Asia & the Middle East; 1978-84, Executive Vice-President, North America; 1984-88, President, Accor/Pacific. In 1988 he joined Disney Development Co., Los Angeles; 1992, promoted to President, Euro Disney, Chairman and CEO, Euro Disney and Executive Vice-President, Walt Disney Company Europe. He was Chairman and CEO of Club Meditérranée 1997-2003. In August 2003 he became Managing Director of the World Economic Forum. He is a board member of eBay, Dexia and Aspen-France Institute.

Rick Samans*** Director, Global Issues, aged 45 Qualifications: BA in Economics and French from Tufts University and a Masters in International Affairs from Columbia University. Positions held: Corporate Lending Officer, Credit Lyonnais USA, New York from 1981-84. Legislative Assistant to a member of the House Committee on Ways and Means from 1985-88. Professional Staff Member and Senior Legislative Assistant to the Chairman, Senate Banking Committee; International Affairs Fellow, Council on Foreign Relations, London and Washington DC from 1988-91. Associate Director and Staff Director for the Subcouncil on Capital Allocation, Competitiveness Policy Council, 1993-96. Economic Policy Adviser to the Senate Minority Leader from 1996-99. Special Assistant to the US President, for International Economic Policy, 1999-2001. Joined the World Economic Forum in 2001 as Director, Global Issues and as an Associate Member of the Managing Board.

André Schneider Managing Director, Chief Operations Officer, aged 44 Qualifications: Classical Orchestra Musician; Diploma, Richard Strauss Konservatorium, Munich. PhD in Computer Science, University of Geneva. Positions held: the Philharmonic Orchestra of Berlin; the Staatsheater Kassel; the Symphony Orchestra of the Radio Saarland; the Lucerne International Festival Orchestra. Researcher in parallel computers for the European Community; various positions held with IBM, including: Product Developer; Consultant and Principal, IBM Consulting Group; Consultant for various companies and organizations; Speaker on IT-related topics. Joined the World Economic Forum in 1998, appointed Director of Knowledge Management and an Associate Member of the Managing Board in 2000 and a member of the Managing Board from January 2003. Michel Ogrizek*** Director, Communications, aged 56 Qualifications: Medical Doctor, University of Paris, 1974. Positions held: Chief Medical Officer at the French Ministry of Cooperation from 1975-82. Research Associate in the Department of Cultural Anthropology and post-doctoral studies at Berkeley, 1982-83. Medical and Public Affairs Director, Africa Region and Medical Director, Canada, at Warner Lambert from 1983-87. Médecins Sans Frontières trainer. From 1987-91, Director, Burson-Marsteller, France. President and CEO, Hill & Knowlton, France, and Head, Eurosciences, from 1991-95. From 199597, President and CEO for Europe and Board member, Edelman Public Relations Group. Global Head of Corporate Relations, Unilever from 19972000. Global Head, Marketing & Communications and Managing Director, UBS Warburg from 2000-02. Joined the World Economic Forum in mid-2002 as Director of Communications and as an Associate Member of the Managing Board. *Appointed Co-Chief Executive Officer in October 2003. **Joined the Managing Board in August 2003 and appointed Co-Chief Executive Officer in October 2003. ***Appointed Managing Director in August 2003.

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Frédéric Sicre Managing Director, Regional Strategy, aged 39 Qualifications: BA in Literature, Villanova University, Philadelphia, Pennsylvania, USA. Positions held: managing a communication centre within the NATO organization, Germany. Programmer, News Reporter for Radio Geneva Information and KTFM radio stations, 1982-84. Joined the World Economic Forum in 1989. In 2000, he became Managing Director with direct responsibility for the Centre for Regional Strategies.

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Our organization

Sharing knowledge

Information technology and knowledge management In 2002/2003, the World Economic Forum continued to develop its IT resources, for the benefit of its members and staff and the global public. At the Annual Meeting 2003, to enhance integration, interaction and knowledge sharing, participants were again supported by the latest technological systems, provided in partnership with leading IT companies.

• Tablet PCs being introduced in the members’ lounges, to complement 90 fixed electronic terminals or ‘kiosks’ • An enhanced ‘Davos Companion’. This year, this hand-held, iPAC version of the printed programme, participants’ booklet and guide, included an integrated LAN card, making it thinner and lighter. In another new departure, following the Annual Meeting, almost one third of the 2,000 companions distributed were donated to aid projects in Uganda and India.

“I remember the CEO of General Electric saying if investors wanted a financial report the size of the New York City phone book, then that’s what they would get. Most of us don’t want that amount. What we want is a small amount of information,

In June, the World Economic Forum faced the challenge of providing IT resources, at short notice, for the very different environment of the Extraordinary Annual Meeting in Jordan. The task was executed successfully, with 150 PCs flown to Jordan, to establish the required IT infrastructure.

but we want good information.” Constance Ford, Economics Editor, The Wall Street Journal, at the Annual Meeting

Building on the IT of previous Annual Meetings, innovations for 2003 included: • Improved ‘smart’ security badges. The badges, which carry a microprocessor and antenna that enable communication with the main computing system, were this year overprinted with different types of ink. This visual security complemented the electronic security provided by the chip • Consolidating all Annual Meeting information into a simple, easy-to-use platform on the World Economic Forum website

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Aside from these high-profile events, we continued to enhance our all-year-round IT offering. Members benefited from such additional services as improved private spaces for key virtual communities, including the IBC and Governors, and more detailed online information. To further improve our transparency, we also increased the information on our public website. For example, we provided more information on our Global Competitiveness Programme reports and on our initiatives.

Online World Economic Forum staff hard at work at the Annual Meeting 2003 in Davos

Looking forward, we will continue to develop our IT capability, to enhance the experience of everyone who interfaces electronically with the World Economic Forum. Communications In 2002/2003, extensive – and largely positive – media coverage brought World Economic Forum activities to millions of people around the globe. The Annual Meeting and the Extraordinary Annual Meeting were the key focus of media attention. For example, live BBC World broadcasts from both meetings opened the events to almost half a billion television viewers and radio listeners. The peace and reconciliation summit in Jordan attracted significant numbers of both the Israeli and Arab media, with satellite television network Al-Jazeera broadcasting three hours of coverage per day. This level of media attention is due to the international stature of our membership and the significance of topics and initiatives. It also reflects the World Economic Forum’s commitment to building partnerships with the world’s media. Twenty per cent of participants at our events are editors attending not, as elsewhere, as reporters only but as full and active stakeholders.

In 2002/2003, for the first time, the media presence included many of the world’s leading editorial cartoonists. As both journalists and artists, they wield a peerless impact and influence on their audiences, reflecting and even shaping public perception of global leaders and issues. They brought a unique perspective to our efforts to engage dialogue during this year’s Annual Meeting, Extraordinary Annual Meeting and regional summits. Our close working relationship with the media across the globe demonstrates our openness and transparency. Ongoing media programmes throughout the year reinforced this relationship which is based on trust and credibility. Notable international partnerships with press groups included editorial cooperation with Newsweek at the global level and Time in Europe, the Middle East and Africa. Partnerships The World Economic Forum also seeks partnerships with like-minded institutions. It has, for example, NGO consultative status with the Economic and Social Council of the United Nations and works closely with the Prince of Wales International Business Leaders Forum and the World Business Council for Sustainable Development.

www.weforum.org

The number of visits to our sites continued to rise. In January 2003, there were one million page views, up from 250,000 the previous January. Over the full year, there were seven million page views, over one million visits.

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Our financial results

In 2002/2003, despite a tough economic and geopolitical climate, the World Economic Forum’s financial base remained robust. By keeping costs below last year, we partly offset a lower level of incoming revenue. The latter followed the SARS-related cancellation of the planned Asia Economic Summit and the postponement of the China Business Summit; the straitened finances of some of our members and, following the exceptional circumstances of the Annual Meeting 2002 in New York, a return to the customary participation levels at this year’s event.

Auditors The World Economic Forum’s financial results are audited by PricewaterhouseCoopers who examine the balance sheet and accounts. The annual report, as well as all institutional documents, are submitted to the Swiss Federal Government, which acts as the supervisory body of the Foundation.

Total Income 1998 – 2003 figures in Swiss francs

The World Economic Forum makes no payments to political personalities, parties or other organizations and avoids involvement in internal politics.

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61,100,642

63,806,052

72,195,453

66,454,727

The World Economic Forum may accept grants, donations, legacies and other contributions or subsidies that are consistent with its purpose of ‘integrating leaders from business, politics and society at large into a community for global action committed to improving the state of the world and the well-being and prosperity of human society’.

51,306,002

Financial policy The World Economic Forum’s financial policy states that membership fees should cover operational costs, that events are funded through cost contributions and that projects are supported by income from partnership contracts.

1998/ 1999

1999/ 2000

2000/ 2001

2001/ 2002

2002/ 2003

The financial year’s figures reflect the special partnership nature of the Annual Meeting 2002 in New York and the SARS-related cancellation/postponement of two significant Asian summits in 2003.

Key figures

Year

1998/1999

1999/2000

2000/2001

2001/2002

2002/2003

Total income*

51,306,002

61,100,642

63,806,052

72,195,453

66,454,727

20,915,531

22,106,920

23,588,125

out of which members’ fees

24,965,367

25,530,325

participation fees

26,972,981

21,465,398

partnership

18,946,940

17,390,452

69,077,008

66,454,522

personnel costs

27,097,659

26,584,768

office costs

10,642,445

8,360,352

activity-related costs

31,336,904

31,509,401

Total expenditure

50,380,441

59,416,135

63,556,294

out of which

Surplus to be added to the Foundation capital

925,560

1,684,507

249,759

3,118,445

205

Foundation capital

7,062,041

8,746,549

8,996,308

12,114,753

12,114,958

68

81

125

139

130

4

4

28

28

Total staff Full time out of which are seconded by Forum members Part time

24

22

22

www.weforum.org

* all key figures in Swiss francs

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Our mission and values

The World Economic Forum is the foremost global community of business, political, intellectual and other leaders of society committed to improving the state of the world. Our mission is best realized through activities which promote economic and social development. We believe that economic progress without social development is not sustainable, while social development without economic progress is not feasible. Our motto is thus ‘entrepreneurship in the global public interest’. In addition to convening world leaders, the Forum is committed to involving them in living communities of common interest and purpose. The Forum ensures substance in the form of strategic insights and, where relevant, platforms for joint action. To carry out its mission, the World Economic Forum has developed an integrated value chain by involving world leaders in communities, inspiring them with strategic insights and enabling them through initiatives. Our vision for the World Economic Forum is threefold. To be: • The foremost organization which builds and energizes leading global communities • The creative force shaping global, regional and industry strategies for its communities • The catalyst of choice for its communities when undertaking global initiatives to improve the state of the world

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The World Economic Forum enjoys unique global positioning by recognizing and responding to two new developments: • The world’s key challenges cannot be met by governments, business or civil society alone • In a world characterized by complexity, fragility and ever greater synchronicity, strategic insights cannot be passively acquired. They are best developed through continuous interaction with peers and with the most knowledgeable people in the field (learning communities)

Photo credit: BMW South Africa

The Forum’s Global Health Initiative helps mobilize the private sector in the fight against HIV/AIDS. Pictured, Ian Robertson, BMW South Africa’s managing director, is publicly tested at an on-site medical facility, to encourage employees to learn their HIV status without fear of discrimination.

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World Economic Forum 91-93 route de la Capite CH-1223 Cologny/Geneva Switzerland Telephone +41 (0)22 869 1212 Fax +41 (0)22 786 2744 e-mail: [email protected] www.weforum.org

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