World Economic Forum - Annual Report 2005/2006

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World Economic Forum 91- 93 route de la Capite CH – 1223 Cologny/Geneva Switzerland Tel +41 (0) 22 869 1212 Fax +41 (0) 22 786 2744 E-mail [email protected] www.weforum.org The annual report is available electronically at www.weforum.org/annualreport – also in Arabic, Chinese, French, German and Japanese versions.

Designed and edited by Wardour Publishing & Design Photos: R Kalvar (Magnum); Swiss Image

Annual Report 2005/06

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The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.

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The Forum’s Global Education Initiative develops public–private partnerships to transform education through technology

Contents Executive Chairman’s statement Successes and achievements Strategic endeavours Shaping the global agenda Shaping the regional agenda Shaping the industry agenda Creating knowledge networks Building public-private partnerships Working with our members and partners Engaging our communities and constituencies Our organization The Forum community World Economic Forum USA Our financial results Our mission and values

02 06 08 10 14 20 22 26 30 33 36 38 41 42 44

Contents | 01

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Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum

02 | Executive Chairman’s statement

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Executive Chairman’s statement The World Economic Forum has once again demonstrated that it is an organization uniquely suited to the challenges of the 21st century. Innovative, dynamic, a catalyst for change – the Forum has continued to grow and to build on its reputation. Always with the needs of our members and partners at the heart of what we do, the last year has seen a number of strategic developments that I believe will continue to drive this organization forward. The strong engagement of our members and partners is fundamental to the ongoing success of the Forum. One of my biggest satisfactions this year was to see the continued strong development of our Industry Partnership, culminating in the establishment of the World Economic Forum USA, our North American affiliate, which will host in New York the global headquarters for the new Centre for Global Industries. Having achieved the ambitious target of 100 Industry Partners, we feel confident that our target of 300 by 2008 will be met. The greater geographical reach that the New York office provides will help us to deliver more effectively to our partners – but we will not lose sight of our guiding principle that this remains ‘one’ Forum with a strong sense of shared mission. I am also proud that we could increase the number of our Strategic Partners by more than 20% this year. The Forum will work closely with these companies, supporting them as they devise and implement programmes that have a positive impact on business and society, both regionally and globally. In view of the new dynamics in the global business landscape, the Forum this year launched a strategic new venture, Global Growth Companies, who will be the global industry champions of tomorrow. These

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companies already have a strong presence in their national and regional markets and are moving into the global arena. We can now offer them the opportunity to become part of the broader Forum community, bringing with them their fresh thinking and dynamism and in return receiving the insights of our more established members. In this context in June, we inaugurated the World Economic Forum’s representative office in China. The Beijing-based office is the headquarters of the World Economic Forum’s new Global Growth Companies community. Prior to the inauguration of the office, Chinese Premier, Wen Jiabao, received me and the World Economic Forum’s International Business Council at Zhong Nan Hai. As with the New York office, it considerably improves our ability to deliver to all of our members and partners as well as to the new Global Growth Companies. A focal point of our year-round activities is our Annual Meeting in Davos. With more than 2,000 participants from all walks of life, drawn from 89 countries, under the theme ‘The Creative Imperative’, stakeholders worked together in workshops and discussion groups to generate innovative and creative solutions to global challenges. But what pleased me particularly this year was the record level of business engagement with so many CEOs and Chairmen participating and helping the Forum deliver on its key initiatives. Davos once again framed the global agenda. And it is particularly gratifying to see the systematic way that the Forum develops the programme of the Annual Meeting through the year, with many task forces, brainstorming sessions and the outcomes of the regional meetings all helping to capture what will be the key challenges of the year ahead. China and India were identified as one of the core challenges and opportunities of 2006 and I was particularly pleased by the strong participation of both business and government leaders from both countries. Of particular note, also, was the opening address from German Chancellor Angela Merkel, who outlined her vision for reform of her country and of Europe. The open Executive Chairman’s statement | 03

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dialogue between such leaders and the business leaders who make up our members and partners is one of the aspects that helps to create the ‘spirit of Davos’. And the Annual Meeting serves as a catalyst for new initiatives – it’s also a time when we can take stock of the many successes and achievements. One of the most significant this year was the Global Plan to Stop Tuberculosis, launched by Nigerian President Olusegun Obasanjo, UK Chancellor of the Exchequer Gordon Brown and Microsoft Chairman Bill Gates. The project, a coalition of over 400 organizations, aims to treat 50 million people and prevent 14 million tuberculosis deaths worldwide over the next ten years. The Annual Meeting fits into a framework of regional meetings throughout the year. These Forums work with our members and partners to create regional platforms to assist in dialogue, understanding and, of course,

Zeng Peiyan, Vice-Premier of the People’s Republic of China and Professor Klaus Schwab at the opening of the Forum’s Centre for Global Growth Companies in Beijing in June 2006

04 | Executive Chairman’s statement

action. Notably, in May, we provided the opportunity for the re-establishment of direct contact between the Palestinian Presidency and Israeli Government, after a hiatus of 11 months, at our World Economic Forum on the Middle East. It’s unfortunate to see recent setbacks, but this is a long road and the Forum has been engaged in helping to find a solution since the beginning of the Oslo process. We must all redouble our efforts to seek a just and lasting solution for the problems of the region. Throughout the year the Forum continued to develop its offering as a global thought leader and as a ‘hub’ of the best minds in the world. We now provide strategic insights into challenges around the world by systematically examining the main international risks. Our Global Risk Network has identified 51 such risks with the valuable input of the world’s leading specialists from business, government, academia and NGOs. The results of our efforts in this field have been documented in our Global Risk Update. And this year we also launched a Global Scenario Programme, which has concentrated on the elaboration of three long-term scenarios for India, Russia and China. Our strength in research into competitiveness is already world renowned: our Global Competitiveness Network draws together expertise in business and academia to help national economies improve their competitiveness and strive towards sustained economic growth. This year we published the 26th edition of our influential Global Competitiveness Report. The Forum has continued to be a catalyst for public–private partnerships. These partnerships demonstrate the strong commitment of business to engage in vital, often life-saving initiatives in areas such as education, health and water provision. This year, for example, the Forum’s Global Health Initiative reached more than four million people with its India Business Alliance to Stop TB, and elsewhere our work with five of our partner companies on protecting supply chains against HIV/AIDS is helping 50,000 people, with the potential to reach more than a million.

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Such activities reflect our strong belief that businesses must make a positive contribution to society. The onus on businesses to be good global corporate citizens is one that is firmly entrenched in our own ethos and that of our members and partners. To build links with partners and offer members the best service, the Forum needs the most committed, experienced and talented people. To this end, we started the Global Leadership Fellows Programme – a three-year course. Working across a range of projects, the first tranche of 47 Fellows joined in September, chosen from 1,800 applicants. A new group has already been selected to start in the coming year. The Forum for Young Global Leaders also allows us to draw on the talent and vision of a new generation. The Forum of Young Global Leaders, which was created in 2004 to define and build a better future, is beginning to demonstrate the sort of leadership we expect from such a group of young, vibrant and capable individuals. A second round of nominations saw this dynamic group of individuals, all aged under 40, increase from 240 to 415. From 90 different countries, they are working across a range of programmes and initiatives. We continued also to work closely with the Schwab Foundation for Social Entrepreneurship to promote profitable businesses with a public purpose. A programme to select the ‘Social Entrepreneur of the Year’ in 24 countries around the world attracted over 2,000 candidates. The winners have since become part of the Schwab Foundation, driving membership to over 100. This year we reinforced the governance team of the World Economic Forum. Carlos Ghosn, President and CEO of Renault and Nissan, and Nandan Nilekani, CEO of Infosys Technologies, were appointed to the Foundation Board and bring considerable business expertise with them. The opening of the Centre for Global Industries in New York heralded the appointment

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of Jean-Pierre Rosso as Chairman, the former CEO and Chairman of CNH Global, who joined the Forum’s managing board. This year’s expansion of our activities and the robust support of our partners and members increased our income by over 25% to Sfr. 104,766,543. The substantial increase in new projects and in the personnel required to sustain that expansion meant this increase was largely countered by costs. We were, however, able to add a small surplus to our reserves. This has been another year of innovation, allowing us to better deliver for our partners and members, but always within the clear framework of the Forum’s mission. I would like to finish by extending my warmest thanks to our staff, who are the lifeblood of the Forum and who do incredible work. I would also like to thank our members and partners, whose commitment and dedication grows stronger year by year. The close involvement of many of them in the production of this annual report – providing insight and advice – underlines the bedrock on which this Forum is built. Trust is one of the greatest assets that the Forum possesses. This trust allows us to assemble all the stakeholders of our global society to jointly craft solutions to global problems in a cooperative spirit with entrepreneurial drive. Once again, I thank you for your engagement and commitment to the World Economic Forum.

Professor Klaus Schwab Founder and Executive Chairman Executive Chairman’s statement | 05

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Successes and achievements The World Economic Forum is committed to improving the state of the world by engaging leaders from the public and private sectors and from wider civil society in partnerships to shape global, regional and industry agendas. Here are some of the year’s highlights. www.weforum.org/latestsuccesses

Global Agenda

• The Global Education Initiative has benefited more than 50,000 pupils in 100 schools in Jordan. The partnership between the Forum’s IT member companies and the government has delivered more than US$ 25 million in direct contributions. This year a new programme was launched in Egypt; it will reach 650,000 students and 70,000 teachers. • The Global Health Initiative launched a pioneering project to explore how multinationals can protect their supply chains against HIV/AIDS. Currently this project involves five multinationals and reaches around 50,000 people. It could potentially reach more than 1 million people. • The Global Plan to Stop Tuberculosis (2006–2015) was launched by President Olusegun Obasanjo of Nigeria, UK Chancellor of the Exchequer Gordon Brown and Microsoft Chairman and Chief Software Architect Bill Gates at the Annual Meeting 2006. The plan aims to treat 50 million people and prevent 14 million tuberculosis deaths worldwide over the next ten years.

• The Disaster Resource Network (DRN) sponsored the deployment of two Medical Action Network emergency teams following the Pakistan earthquake in October; delivered more than US$ 3 million of high-priority relief; and constructed 400 interim shelters in Jammu and Kashmir. • Following Hurricane Katrina DRN brought emergency wireless technology to evacuees. In just two weeks, the team established the networks needed to connect 11 towns and 10 relief organizations. • And following the Indonesian earthquake 15 heavily damaged schools in Yogyakarta will have newly restored water and sanitation facilities – helping 3,000 students. 06 | Successes and achievements

• The Council of 100 Leaders: West–Islamic World Dialogue (C-100) identified and approved six new projects to improve mutual understanding, using more than US$ 1 million raised from public and private sources. The projects include a Muslim Leaders of Tomorrow Forum, a religious leaders study exchange, media outreach training and a reconciliation reality television service. • The Council also presented the first C-100 Award at the Annual Meeting 2006 to boxing legend Muhammad Ali for promoting dialogue and understanding across different segments of society in the Western and Muslim worlds.

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Regional Agenda

Industry Agenda

• As part of the Forum’s Water Initiative the private sector is working in Uganda to install 1,000 water ‘play’ pumps near public and school buildings. Water projects have also been launched in India, Mozambique and South Africa – 70,000 people will be reached as a result of public-private partnerships working with existing municipal water networks.

• The Partnering Against Corruption Initiative (PACI) now has over 100 signatory companies, representing a global annual revenue of over US$ 550 billion, and employing more than 1.5 million people. At the Annual Meeting 2006, the heads of the main multilateral development banks agreed to work with PACI to include anti-bribery requirements as part of their bidding processes.

• Member companies of the Forum’s Energy Poverty Task Force are helping to provide electricity to more than 11,000 households in the Democratic Republic of Congo and Lesotho, through hydro and solar power and existing grids, at an estimated cost of US$ 16 million. • Member companies launched the Business Alliance Against Chronic Hunger. Working with governments and civil society, the alliance will deliver scalable, market-based solutions to the persistent problem of hunger in Kenya. • Our Forum of Young Global Leaders forged a partnership with Pakistan’s President Pervez Musharraf and tourism companies to tackle the humanitarian crisis caused by the 2005 earthquake in the country. They aim to restore the tourist infrastructure and boost visits to some of the hardest-hit areas.

• The office of the World Economic Forum USA was opened in New York. It will act as the global headquarters of the Centre for Global Industries, which is responsible for leading the Forum’s industry activities, including the Industry Partners Programme. The programme has expanded this year with the addition of the aviation, travel and tourism; engineering and construction; and food and beverage industries. • The Community of Global Growth Companies was established. Its mission is to enable emerging multinationals to develop into the next generation of global champions and become a major force driving economic development. • The Schwab Foundation for Social Entrepreneurship, which promotes profitable businesses with a public purpose, chose 24 national winners of the ‘Social Entrepreneur of the Year’ award. The winners were chosen from over 2,000 applicants. The lives of over 650 million people have been improved by the foundation’s work.

Successes and achievements | 07

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Strategic endeavours

Centre for Global Industries

To continue to act as an effective catalyst for change, the Forum has created a detailed strategic framework for future development. Within this framework we have launched a number of significant projects and expanded others to make sure that we continue to engage our members and partners and to effectively deliver our mission and vision.

In March 2006, our affiliate, the World Economic Forum USA, opened its New York office to house the new Centre for Global Industries and to act as the international headquarters of our industry activities. By the end of June 2006, five sectors of the Centre for Global Industries had moved from Geneva to New York, namely: banking, insurance, investors, diversified financials and healthcare. With operations spanning New York and Geneva, the Centre for Global Industries will focus on developing the Industry Partners Programme, which is aimed at engaging global companies in the Forum’s activities at the sector level. Industry Partners are member companies of the World Economic Forum who strongly support our commitment to improve the state of the world. By the close of the 2005/2006 fiscal year, over 100 companies from six industry sectors had joined the programme, including more than 50 from North America. www.weforum.org/forumusa

08 | Strategic endeavours

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“

It’s been my privilege to be associated with the World Economic Forum for over a decade. When I think about the qualities I have always cherished about it, I am most struck by the things that should not change year to year – those lasting values that embody an organization’s character. The character of the Forum that I hope to see a decade from now is exactly what makes it unique today: an organization that can bring leaders of the most relevant global companies, nations and social action groups together to address practically the world’s thorniest issues. An organization’s ‘True North’ is its internal, guiding principles – the ones that hold, even when times get tough or circumstances change. By recognizing and articulating its principles, the Forum continues to both reinforce and renew what makes it relevant and unique, and keeps it independent as it adheres to its mission of setting the global agenda.

“

ORIT GADIESH CHAIRMAN, BAIN & COMPANY, USA; MEMBER OF THE FOUNDATION BOARD OF THE WORLD ECONOMIC FORUM

Global Growth Companies

Global Leadership Fellows

In June, business and government leaders and Forum members gathered in Beijing to celebrate the inauguration of our China office and the launch of the Community of Global Growth Companies.

Our members are among the world’s best thinkers and leaders: to support them effectively, our own people have to be equally skilled. To ensure that we continue to attract, develop and retain world-class staff, we launched our Global Leadership Fellows Programme, a three-year course that fosters an understanding of how business and society operate and to hone top-level leadership skills.

The community’s mission is to enable emerging multinationals to develop into the next generation of business champions and become a major force driving economic development. It is a cross-industry community of companies that have demonstrated the clear potential to become leaders in the global economy within five years. Membership in the Community of Global Growth Companies offers an unparalleled means for business leaders to gain a unique understanding of the key developments in industry, society and geopolitics that will have the greatest impact on their future success. They will also benefit significantly from the many networking opportunities provided by the Forum. The Forum’s move into China has been widely supported by the Chinese Government. Prior to the inauguration ceremony, Professor Klaus Schwab, Executive Chairman, and members of the Forum’s International Business Council met with Premier Wen Jiabao, who reaffirmed China's support for this new programme.

From 1,700 outstanding applicants, 47 fellows from over 30 countries, with excellent academic and work experience, were selected to participate in the Master’s programme in Global Leadership. Twenty per cent of their time is devoted to course work with the remainder spent working within the Forum. This ‘leading by doing’ approach means Fellows are core players in all our activities. Many of the Forum’s partners – CEOs, leading academics, multilateral institutions and NGOs – are actively involved in the programme, giving presentations and seminars. In the spirit of taking leadership for one’s own development, fellows design their own programme under the guidance of the dean, Michael Obermayer. Our members will have seen Fellows in action – at the Annual Meeting 2006, at regional events and in our many initiatives.

The first annual meeting of the Community of Global Growth Companies will be held in China in August 2007.

Following the successful first year, a second tranche of Fellows has been recruited. The programme will be run on an annual basis, giving us access to a pool of peerless individuals for the coming years.

www.weforum.org/ggc

www.weforum.org/glf

Strategic endeavours | 09

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Shaping the global agenda Much of the work carried out by the World Economic Forum during the year is on a worldwide scale. Collaborating with our members and partners, new and existing initiatives and programmes have a positive impact on the global community, improving society in many ways. It is the World Economic Forum Annual Meeting in Davos each January that frames the global agenda and highlights the challenges facing the world in the coming year.

Annual Meeting The Annual Meeting 2006 brought together 2,340 leaders from business, politics, academia, non-governmental organizations, the media, religion and civil society.

As the flagship event of the Forum, the Annual Meeting represents a year of intense collaboration across all of our teams and with our members and partners. ‘The Creative Imperative’ was the theme for the 2006 event, enabling leaders to develop fresh and practical responses to a rapidly changing economic and social environment. This theme was reflected over the five days in Davos, with lively workshops, discussions and plenary sessions demonstrating innovative and creative thinking. Reinforcing the Forum’s nature as a member-driven organization, the format for this year’s Annual Meeting again began with a successful ‘town hall’ session. From a range of possible topics, 600 participants chose the five core challenges that would be focused on during the Meeting. These were: the Emergence of China and India; the Changing Economic Landscape; New Mindsets and Changing Attitudes; Creating Future Jobs; and Regional Identities and Struggles. The top-level business representation was again complemented by many high-profile leaders from government and NGOs. The opening address was given by the German Chancellor Angela Merkel, and other participants included China’s Vice-Premier Zeng Peiyan, Pakistan’s President Pervez Musharraf, Queen Rania of Jordan, UN Secretary General Kofi Annan and former US President Bill Clinton. All took part in sessions which ranged in subject matter from leadership in times of crisis to concerns about climate change. As always at the Annual Meeting, there were many highlights. One of these was the signing of a Memorandum of Understanding (MoU) by Zhang Xiaoqiang, Vice-Chairman of China’s National Development and Reform Commission and Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. This MoU led to the opening of the Forum’s headquarters for the Community of Global Growth Companies in Beijing in June.

Rahul Bajaj, Chairman, Bajaj Auto Ltd India, with a fellow participant

10 | Shaping the global agenda

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German Chancellor Angela Merkel gave the opening address at the 2006 Annual Meeting in Davos

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As well as having over 240 sessions and workshops in just five days, the Annual Meeting also provided the platform for numerous announcements around initiatives led by the Forum and its members and partners. Not least among these was the launch of the Global Plan to Stop Tuberculosis, by Nigerian President Olusegun Obasanjo, the UK Chancellor of the Exchequer Gordon Brown and Microsoft Chairman and Chief Software Architect Bill Gates. This groundbreaking coalition of over 400 organizations aims to treat 50 million people and prevent 14 million deaths from TB worldwide over the next ten years. The Global Education Initiative, which launches collaborative public-private partnerships to improve education systems, is already enjoying success in Jordan and Rajasthan. During the Annual Meeting, work was initiated in Egypt to replicate that success.

Following the major natural disasters of 2005, including hurricanes in the US and the devastating earthquake in Pakistan, the Forum was asked to serve as a major platform for engaging private sector support for relief efforts. Planning that took place at the Annual Meeting will lead to the expansion of our Disaster Resource Network, which mobilizes the resources of the international business community to rebuild the lives and livelihoods threatened by natural and man-made disasters. Under the leadership of the Forum’s Food and Beverage company members, private and public sector leaders developed a business-led action plan to help reduce hunger in Africa and discussed it with UN Secretary General Kofi Annan. The group has recommended that the Forum serve as a platform for putting this plan into action during 2006. Leaders from several Muslim countries came together in a session on the modernization of Islamic societies, with all agreeing that these communities must be allowed to reform from within. “Take the time to understand the Muslim world, do not try to manipulate us because that will alienate us even more,” said Queen Rania of Jordan. “Modernization is not a bad word, it is in the heart of the Islamic religion,” said Hajim Alhasani, President of the Iraq National Assembly. They and Pakistan’s President Pervez Musharraf and Hamid Karzai, President of Afghanistan, called for a dialogue that would improve the world for everyone.

Professor Klaus Schwab and Wen Jiabao, Premier of the People’s Republic of China

12 | Shaping the global agenda

The Forum’s Council of 100 Leaders: West-Islamic World Dialogue Initiative (C-100) launched a new award at this year's Annual Meeting. The C-100 award will recognize individuals who make especially noted contributions towards promoting dialogue and understanding between the Muslim and Western worlds. This year, the first-ever award from the C-100 was presented to boxing legend Muhammad Ali, who has devoted himself to the ideals of advancing tolerance and cooperation around the world. He recently opened the US$ 82 million Muhammad Ali Center in his home town of Louisville, Kentucky, with the

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“

International business – particularly in the global energy industries – depends on good relationships. I find attending the World Economic Forum’s Annual Meeting a very effective way of making and maintaining key relationships. This is not just a matter of rubbing shoulders with celebrities. Business life is a bit too hectic to devote several days just to that pleasure. But the Davos meeting fully justifies the space in my diary each year. As well as learning a great deal from the exchange of ideas in the plenary sessions, I expect to have around 20 one-to-one meetings with key contacts. And this is not just with business people and politicians, but also often with representatives from NGOs. The atmosphere is generally very constructive and these meetings are very valuable for developing mutual understanding. To sum up, for me, Davos is key for building the right relationships.

“

JEROEN VAN DER VEER CHIEF EXECUTIVE, ROYAL DUTCH SHELL, NETHERLANDS

mission to promote respect, hope and understanding among children and adults.

from civil society. In addition, a large number of people travelled to Davos specifically to participate in the event.

‘The Creative Imperative’ was echoed in innovative use of technology, which played a vital role at this year’s Annual Meeting. A central location offered 25 laptop and desktop-based stations to access the background information specific to sessions. Participants were also offered a portable wireless TabletPC, which allowed them to access essays covering each session. And with more than 70% of session seats being reserved electronically during the week, the Davos community continued to embrace modern technology.

This year’s overall theme was ‘Respecting, Crossing and Shifting Boundaries’. Individual sessions addressed both long-standing general concerns and more focused, topical issues such as human rights. In all cases, the engaged discussions between the public and participants of the Annual Meeting allowed in-depth conversations.

As the Annual Meeting drew to a close, attention was drawn back to the theme of ‘The Creative Imperative’. Panellists in the session agreed that the rise of the developing world is changing the balance of power. This makes it vital that social imbalances are redressed, said James Wolfensohn, former head of the World Bank. “If we don’t do that, we will not have a stable planet… and I think Davos is approaching these questions.”

Panellists of this year’s Open Forum included Peter Brabeck-Letmathe, Chairman and CEO of Nestlé, Kenneth Roth, Executive Director of Human Rights Watch, and Angelina Jolie, the goodwill ambassador of the United Nations High Commissioner for Refugees (UNHCR). www.weforum.org/annualmeeting

The ‘Davos cycle’ begins as soon as one meeting ends. As the 2006 Meeting ended, the Annual Meeting Programme Team began meeting with our core communities and exploring how best to integrate the work of the Forum and its members and partners into the worldclass programme that is the Annual Meeting’s trademark. Open Forum Davos 2006 The Open Forum, organized in cooperation with the Federation of Swiss Protestant Churches, runs simultaneously with the Annual Meeting. It offers a possibility for an open debate on globalization and its consequences. This project demonstrates the Forum’s commitment to engaging the general public in a constructive dialogue. Like previous years, the Open Forum at the Annual Meeting 2006 attracted over 2,400 people – including a wide range of local people from all walks of life and those

Pascal Lamy, Director-General, World Trade Organization, and Robert Portman, US Trade Representative, at ‘A trade compromise, for now?’ session in Davos

Shaping the global agenda | 13

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The Egypt Education Initiative – targeting 650,000 students in

2,000

schools

Egyptian President Hosni Mubarak opened the World Economic Forum on the Middle East in Sharm El Sheikh in May 2006

14 | Shaping the regional agenda

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Shaping the regional agenda During 2005/2006, the World Economic Forum facilitated high-level gatherings in China, Russia, India, Brazil, Egypt, South Africa and Japan. More than ever before, key players from business, government, academia and civil society took part in frank informal dialogue, defining action plans and working out solutions to the most pressing regional and cross-regional issues. We successfully introduced a number of new features to our regional activities, and increased the interaction between different areas of the Forum as a result. We created positive and well-received links between our regional activities and our Industry Partners Programme. By including high-level private meetings focusing on industryspecific issues in a regional context, we set the framework for our Industry Partners to access valuable national and regional insights in their industries, sharing best practices and building relations with their peers.

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At a time of unprecedented African growth, the Africa meeting, our 16th on the continent, provided a platform for leaders to discuss the opportunities and challenges facing the region. It drew leaders from business, government and civil society from across Africa, including President Armando Emilio Guebuza of Mozambique, President Jakaya M. Kikwete of Tanzania, and President Thabo Mbeki of South Africa. While acknowledging that much work remains to be done in Africa, there was a real sense of optimism and an overriding view that the continent has emphatically turned the corner. During the event, sessions on global competitiveness, risk and scenarios – most notably on the rising impact of China and India – focused on the challenges ahead. The emphasis moved from highlighting problems to identifying solutions, and culminated in an emphatic call to learn from, and do more to sustain, African successes.

We also developed a more structured flow between the Annual Meeting outcomes and the agendas for regional meetings. One tangible example of this was the ‘Davos Update’ sessions at the start of each regional meeting, covering topics such as global competitiveness, international risks and country scenarios. This enabled engaged discussions on how these global challenges and opportunities could affect the regions. Africa The sentiments of John Page, Chief Economist for Africa at the World Bank, that “African solutions to African problems have to come from African people and African governments” summed up the buoyant resolve at the World Economic Forum on Africa, held in Cape Town, South Africa, at the end of May.

HM Queen Rania of the Hashemite Kingdom of Jordan, Member of the Foundation Board of the World Economic Forum, with Professor Klaus Schwab

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The meeting generated strong commitments to move forward in specific areas, including optimizing the business contribution to the fight against pandemics, corruption and poverty. There were many highlights, including the launch of the Investment Climate Facility for Africa, with secured seed funding of US$ 100 million and a strong, business-led mandate to improve the continent’s investment climate. A national council was also launched in Kenya, under the auspices of the Forum’s Business Alliance Against Chronic Hunger, with eight multinational and domestic companies providing time and resources. A number of future commitments were also made during the meeting. These included a World Economic Foruminitiated public-private partnership to strengthen healthcare systems in Africa, by addressing epidemic and pandemic diseases in particular. The partnership will be implemented at the Annual Meeting 2007. Middle East A rapidly changing Middle East remained in the headlines and at the centre of the World Economic Forum’s concerns. Nowhere is the Forum’s role in providing a neutral platform for open dialogue and a venue for ‘unconventional conversations’ more important than in a region where such dialogue and common understanding is often frustrated by political sensitivities and traditional rivalries. Our activities in the region help to promote change by supporting those who are advancing reform and building understanding between decision-makers from different parts of the world. The Forum is playing an active role in the changes sweeping this region. The Arab Business Council (ABC), for example, has established itself as a credible and legitimate voice of the Arab business community. The ABC’s mission is to help Arab societies to compete effectively in the global economy and, in the last year, it helped establish national competitiveness councils in Kuwait and Bahrain, while Egypt published its third national competitiveness report. 16 | Shaping the regional agenda

The ABC’s annual meeting in Bahrain included an influential group of ministers holding the crucial economic portfolios and, together, they pushed forward the economic reform agenda in the region. In the coming year, the ABC will work on five pillars of action: education, investment, trade, media and competitiveness. The World Economic Forum on the Middle East took place in the Egyptian resort of Sharm El Sheikh in May 2006. It was held under the theme ‘The Promise of a New Generation’, reflecting both the challenges and the opportunities presented by the young and growing populations in the region. A group of local students, meeting with members of the Forum of Young Global Leaders, made sure that the discussions reflected the real priorities of the region’s youth. The meeting also allowed the integration of other Forum activities into the Middle East arena, such as Industry Partners, Global Growth Companies, Scenarios, the Women Leaders Programme and the Council of 100 Leaders: West-Islamic World Dialogue. In the spirit of ‘The Creative Imperative’ – the theme of the Annual Meeting – the WorkSpace was brought to Egypt for its debut in the Middle East. The WorkSpace, one of the highlights of Davos, creates an environment where participants can break into smaller groups and brainstorm concepts. It provided the engine of productivity of the meeting, hosting workshops that generated new ideas, and initiated a number of projects in the areas of innovation, branding, financial services and infrastructure. Dialogue was a recurring theme of the event, which was characterized by an usually high level of openness and frankness. It brought together the Palestinian President, Mahmoud Abbas, and the Israeli Foreign Minister, Tzipi Livni, for the first high-level meeting of Palestinian and Israeli officials in 11 months, while an important delegation of political and business leaders from Israel met with their Arab counterparts. The Sharm El Sheikh meeting saw the official launch of the Egypt Education Initiative, which is a partnership

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“

The World Economic Forum plays a very important role in providing a platform that brings together an eclectic group of industry and thought leaders. The Annual Meeting has the best collection of ‘business thought capital’ in one location and allows for incisive and stimulating debate on crucial issues. It provides an opportunity to refresh one’s ideas through many thought-provoking sessions – ranging from technology initiatives, the state of the economy, global collaboration and important emerging social issues. It has helped create an understanding of the imperatives of leadership in a global context and the challenges of a culturally diverse work group. Davos was a great experience for me and is a very effective platform to connect with the global business fraternity.

“

AZIM H. PREMJI CHAIRMAN, WIPRO LIMITED, INDIA

between the Government of Egypt and the Forum’s IT members community, based on the proven model of the Jordan Education Initiative. In its first phase, the Egypt Education Initiative will benefit 2,000 schools by providing innovative content for curricula, training for teachers and students, and IT infrastructure. The initiative is a concrete example of how the Forum can bring together governments and the private sector in productive partnerships to benefit the region.

on the continent are beginning to take preventive actions against the impact of the disease. The survey was carried out by the Forum’s Global Health Initiative, in partnership with Harvard University, the American Foundation for AIDS Research and UNAIDS.

Asia In recognition of the increasing importance of Asia in shaping global and industry agendas, the World Economic Forum had a strong presence on the continent this year.

The Forum launched its India Scenario project with the participation of Montek Aluwahlia, Vice-Chairman of the National Planning Commission. This was the Forum’s first regional scenario project. The firstever ‘town hall’ on India’s Global Competitiveness also took place, concluding that improving India’s competitiveness in the global economy will depend on improving basic infrastructure and reducing waste in government spending.

In September 2005, we held the 25th China Business Summit in Beijing. This saw the start of the negotiation process that led to a signed Memorandum of Understanding at the Annual Meeting in Davos and culminated in the opening of our office in Beijing in June 2006. This new office is tasked with developing the Community of Global Growth Companies. The emergence of Chinese companies was a key focus of the summit, and a private working group session convened to look at the how the Chinese stock market could be further developed. This discussion took place as part of an ongoing workstream focusing on ‘Nurturing the Early Stage Investment Climate’, one of the working groups within the Forum’s Financial Services and IT/Telecom Industry Partners programme.

In India, New Delhi played host to the 21st India Economic Summit, where the keynote address was given by Prime Minister Manmohan Singh.

To devise additional recommendations for improving the country’s performance, the Forum and the Confederation of Indian Industry (CII) commissioned a nationwide survey by Indian broadcaster NDTV, which polled 1,076 people across India to gauge their views on what areas of improvement hold the most promise. The India summit also saw new initiatives taking flight. The Forum’s Water Initiative and the CII launched an alliance of Indian and multinational businesses for the purpose of improving the availability and quality of water for local businesses, communities and the environment.

For the IT/Telecoms sector, this session also concluded a programme of private activities between business leaders and subject experts that explored potential scenarios for China’s future over the next 20 years, and in this context, the challenges and opportunities related to senior management talent and intellectual property.

Building on the success of the Jordan Education Initiative, the Forum, the government of Rajasthan, the CII and the Global e-Schools and Communities Initiative (GeSCI) launched a new initiative aimed at improving public education in Rajasthan through an extensive programme of public-private cooperation.

The Summit also saw the first-ever survey of the Asian business response to HIV/AIDS, which showed that firms

At the Annual Meeting, there was a record level of top Asian government participation. This year was the first Shaping the regional agenda | 17

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“

History teaches us that the most intractable problems demand response rooted in collective action. As we face new and more complex challenges associated with deepening global integration, the need to mobilize beyond national borders and across public, private and non-profit sectors has become an inescapable priority. The World Economic Forum is emblematic of this kind of partnershipworking. It brings together the right people, in the right setting, with the right mindset to deliver results. Through a broad base of activities, the Forum responds to the most difficult policy problems with practical, urgent action – in global public health, in education, in economic development, and in security. I am honored to support the Forum as it evolves new strategies for collaborative action.

“

RAJAT K. GUPTA SENIOR PARTNER, MCKINSEY & COMPANY, USA

time a Chinese state leader – Vice-Premier Zeng Peiyan in 2006 and Executive Vice-Premier Huang Ju in 2005 – has come to Davos in consecutive years. It was also the first time four Japanese ministers took part, despite direct conflict with the winter session of the Japanese Diet (the country’s legislature). Other Asian leaders participating included President Hamid Karzai of Afghanistan and President Pervez Musharraf of Pakistan. Three senior Indian ministers and three chief ministers also participated – the largest and most senior delegation ever, with all six taking part in the summit’s India Everywhere campaign. Other participants from the continent included Korean Foreign Minister Ban Ki-Moon, one of the candidates to be the next Secretary General of the UN, and Haruhiko Kuroda, President of the Asian Development Bank.

Chinese growth on the future competitiveness of SouthEast Asia; to increase energy efficiency in major consuming countries and industries; to sustain Japan’s recovery while cutting its fiscal deficit; and to resolve Japan’s historical and territorial disputes with China and Korea.

A busy year was rounded off in June with the World Economic Forum on East Asia in Tokyo – the first time we have ever held a regional meeting in Japan. Organized in partnership with Keizai Doyukai (Japan Association of Corporate Executives) on their 60th anniversary, the event was an outstanding success. The highest-ever ratio of top-level representatives at a regional meeting participated. This included ten cabinet members including the Japanese Prime Minister and the Governor of the Bank of Japan. Prime Minister Junichiro Koizumi hosted the opening reception at his residence.

Europe In October 2005, over 300 participants from 25 countries joined the World Economic Forum in Russia. The sessions covered two main themes, with the first concentrating on the question: ‘How can Russia move from a resourcebased economy to more sector diversification?’ Participants engaged in discussions about the role of IT, the financial sector, the impact of high energy prices and opportunities in fast-growing markets, such as the food industry and retail and consumer markets. Governance and rule of law was the other topic, with participants focusing on what legal and regulatory environment the Russian private sector needs to prosper. After two days of discussion and interaction, participants agreed on a number of key action points, which were presented to the Russian Minister of Economy. These were: to ‘name and shame’ corrupt officials at all levels; to improve Russia’s checks and balances system; to increase the rule of law by recognizing property; to support an independent judiciary and to create a free press; to simplify the visa system; and to identify areas of potential comparative advantages other than natural resources.

Highlights included the signing of five new Japanese member companies. Representatives of the ruling Liberal Democratic Party established a Davos Dietmembers Caucus of over 70 Japanese members of parliament, and 20 participants met privately with the Forum’s Executive Chairman Klaus Schwab to discuss how Japan should raise its international profile, using the Forum as a platform. The theme for the event was ‘Creating a New Agenda for Asian Integration’ and a number of priorities for the region were identified by participants. These were: to create or assign regional institutions to discuss energy, security and environmental issues; to address the impact of Indian and 18 | Shaping the regional agenda

The steps that many companies within Asia are making onto the global stage was reflected by the increase in the Forum’s Asian member companies – rising from 128 to 145. The vast majority of new Asian members are Industry Partner calibre and ranked in the Fortune 500. This year information communications technology company Lenovo became the first Industry Partner from China, while energy company TEPCO became the first from Japan. Indian companies Infosys and Reliance continued in their valuable role as strategic partners.

The Annual Meeting in Davos was the key event for our European constituents, who made up nearly half of the

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participants. The European agenda of the World Economic Forum, as in previous years, was strongly represented at the Meeting, which was opened by the German Chancellor, Angela Merkel. While most discussions involved the European point of view – from innovation and creativity to migration and religion – several sessions focused on intrinsically European questions such as how to revitalize the continent’s identity or how to best leverage the fresh impetus provided by the new member states. Other sessions addressed critical upcoming European issues, including identifying the continent’s prime security concerns and how to revive the European Monetary Union and the EU Growth and Stability Pact. More country-related discussions resulted in clear commitments to bring together our members and partners to exclusive follow-up gatherings with their respective goverrnments in the course of 2006.

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partnerships to invest in much-needed infrastructure in rural areas, underdeveloped regions and urban slums. North America The Annual Meeting continues to play an extremely important role in addressing the North American agenda and serves as a crucial event for US and Canadian members. In 2006, six US cabinet secretaries and scores of prominent CEOs, were among the North American participants. This broad participation contributed to the discussion and dialogue on topics ranging from trade and labour markets to foreign policy. US Secretary of State Condoleezza Rice participated in a teleconference on the US freedom and democracy agenda and former US President Bill Clinton provided a special message in an interactive dialogue with the Forum’s Executive Chairman Professor Klaus Schwab. www.weforum.org/events

Latin America The World Economic Forum on Latin America was held in April 2006 in São Paulo, Brazil, under the general theme of ‘Building a Stronger Latin America in the Global Economy’. Over 300 top-level participants from business, government and civil society – including Brazilian President Luiz Inácio Lula da Silva – explored how the region can achieve and sustain high economic growth with equitable income distribution. Participants in Davos, São Paulo and around the world have worked to develop innovative solutions and approaches and to set priorities for action that would constitute an agenda for Latin America to enhance its global competitiveness. Some of these proposals were included in a list of ten recommendations for social and economic change that were issued in a communiqué at the closing session of the Latin America meeting. After reviewing them, participants voted to focus this year on education – specifically teacher training and improving the quality of schools – and on employing public-private

Brazilian President Luiz Inácio Lula da Silva at the World Economic Forum on Latin America in São Paulo in April 2006

Shaping the regional agenda | 19

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Shaping the industry agenda The World Economic Forum’s business members and partners became more deeply involved in our initiatives and programmes this year. By working closely with these organizations, we learn what issues are important to them – and many of our new projects flourish as a result. Industry Partners Programme This year our affiliate, the World Economic Forum USA, opened the new headquarters for the Centre for Global Industries in New York. Central to the activities of this new office will be to continue the development of our Industry Partners Programme, complementing the already existing industry activities in our Geneva office. Industry Partners are select member companies of the World Economic Forum who strongly support our commitment to improve the state of the world. The unparalleled convening power of the Forum brings these companies together through a series of modules during the year. The Industry Partners Programme will provide participants with privileged access to industry insights, aiding them in their strategic decision-making processes. We launched the Industry Partners Programme in 2005, in the IT and telecommunications, energy and financial services industries. This year saw the expansion of the programme into engineering and construction; food and beverage; and aviation, travel and tourism. Already 100 companies have become Industry Partners and we remain on target for our goal of 300 companies across 12 sectors by the end of 2008. Industry Partners are involved in a broad range of our projects, and this year was an incredibly successful one for the programme.

20 | Shaping the industry agenda

IT and Telecommunications partners launched an in-depth analysis of China through the Forum’s China and the World Scenarios 2025, with a specific focus on the challenges and opportunities related to intellectual property and talent. In addition, two cross-industry projects were launched, focusing on the convergence between media and IT and the role of technology in financial services. Financial Services partners collaborated with the Chinese government with regard to relaxing laws on the establishment of offshore venture capital-backed Chinese enterprises. In the Energy sector, CEOs of Industry Partner companies and energy ministers convened at a first-ever Energy Summit in Davos 2006. This highly successful event focused on investment in energy security and simulated a terrorist attack with its effects on energy markets. Also, CEOs from Energy partners put forward recommendations shaping the form and content of the G8 and G20 climate framework post-2012. Engineering and Construction partners helped collaborate with the World Bank on anti-corruption practices that resulted in including anti-bribery language in bidding documents for infrastructure projects financed by the World Bank. Meanwhile, Food and Beverage partners launched ‘Halving Hunger’, an action-oriented public-private partnership to reduce hunger in Kenya, and ‘Working towards Wellness’ which develops best practices on adult health and physical fitness. In addition, the ‘Industry Partners in Davos’ programme was launched at the Annual Meeting 2006, providing Industry Partners with a series of exclusive meetings to engage with key decision-makers on critical global issues. Technology Pioneers As the world becomes ever more technologically advanced, it is essential that the Forum harnesses

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The World Economic Forum provides a remarkable opportunity for business, political and intellectual leaders to discuss the most important issues facing the global community and to develop solutions for tough economic and geopolitical challenges. One such challenge is corruption in the conduct of international commerce, which robs local populations in under-developed countries of critically needed resources and curbs economic growth. Under the auspices of the Forum, Fluor is actively involved in the Partnering Against Corruption Initiative (PACI). PACI is an extraordinary endeavor, with different business sectors joining forces to make integrity the foundation on which businesses operate. I’m proud that real advances are being made with PACI and at an accelerating pace. This initiative serves as a great model of how, by working together through the World Economic Forum, we can make a difference in our global community.

“

ALAN L. BOECKMANN CHAIRMAN AND CEO, FLUOR CORPORATION, USA

the work of innovative companies and utilizes it in an effective manner. As a result, we support and highlight the work of between 30 and 50 companies as Technology Pioneers every year. Potential Technology Pioneer companies are identified and assessed by an expert selection committee. This year, 36 pioneers were selected. These companies develop and apply the most novel and transformational technologies in the fields of IT, renewable energy and biotechnology/health. The work that they undertake holds the promise of significantly affecting the way business and society operate. Pioneers make an invaluable contribution to the Forum’s initiatives, workstreams, regional activities and to the Annual Meeting, and will continue to constitute an important supportive community for our work. Moving forward, the community will work closely with the Centre for Global Growth Companies. www.weforum.org/aboutus

Partnering against corruption Corporate commitment to action against corruption and bribery is growing. As a result, over 100 CEOs of leading companies have signed the Forum’s Partnering Against Corruption Initiative (PACI) support statement, which calls for a zero-tolerance policy towards bribery and the development of a practical and effective implementation programme. The PACI made significant strides this year. On World Anti-Corruption Day, 9 December 2005, the four major anti-corruption initiatives working with the private sector – PACI, the International Chamber of Commerce, Transparency International and the UN Global Compact 10th Principle – agreed to coordinate their efforts to support the business fight against corruption and bribery. The focus is on sharing best practices among signatory companies, implementation, as well as self-evaluation. At the Annual Meeting 2006, PACI and the multilateral development banks agreed to develop concerted anti-bribery requirements from companies seeking contracts internationally and to work together at regional and country levels in anti-corruption awareness-raising events. www.weforum.org/paci

Larry Page, Sergey Brin (Co-Founders and Presidents, Google Inc.) and Sir Richard Branson (Founder and Chairman, Virgin Group Ltd) at the Google reception in Davos Shaping the industry agenda | 21

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More than

1,000

sessions with experts have been organized this year during various Forum events for our members and partners

Dominic Casserley, McKinsey, United Kingdom, speaking at the joint session of the financial services and IT governors meeting in Davos

22 | Creating knowledge networks

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Creating knowledge networks Businesses and governments face a constantly shifting landscape in the drive to realize political, industrial and societal change. It is, therefore, essential that they have a comprehensive understanding of where they stand in the current economic climate, their strengths and weaknesses, and the risks that exist now and those they may face in the future. The identification and analysis of these factors are the responsibility of the World Economic Forum’s Strategic Insight Teams, launched in 2004. This year, our Strategic Insight Teams – whose main programmes are global competitiveness, global risk and scenario planning – played a pivotal role in the Annual Meeting 2006 by designing the programme. They were also key players in supporting the growth of the Forum’s Industry and Strategic Partners. Global Competitiveness Network This year, the Global Competitiveness Network (GCN) became the new face of the former Global Competitiveness Programme. The small but distinct change recognized the wide-ranging yet cohesive efforts that are required in this field to bring about economic growth. The network creates a platform for discussion and debate for the business community, government, academia, international organizations and civil society by providing invaluable insights into the policies, institutions and factors affecting national competitiveness. One of the GCN’s key tasks is to examine the ability of national economies to achieve sustained economic growth and long-term prosperity and thereby stimulate the necessary strategies to attain these objectives. In September 2005, the 26th edition of its annual flagship publication, The Global Competitiveness Report, was released. This publication remains the top international reference for measures of competitiveness, providing

critical insights to the business community and policymakers on competitiveness issues. This year, the report covered a record 117 economies, up from 104 last year, and presented comprehensive data on over 100 variables on competitiveness. Sources included the latest national and international statistics, as well as the results of the Forum’s annual Executive Opinion Survey, which captures the views of almost 11,000 business leaders on their commercial environments. In March 2006, the GCN launched the fifth annual Global Information Technology Report, which assesses the impact of information and communication technology (ICT). The report’s Networked Readiness Index (NRI) measures a country’s propensity to exploit the opportunities offered by ICT for development and increased competitiveness and provides an important tool in understanding the proliferation of such technology. The GCN also delivered an additional publication this year – the Latin America Competitiveness Review – as the backbone of content for the World Economic Forum on Latin America in April 2006. This is the latest in a series of regional competitiveness reports, and the second study produced on Latin America in the past five years. While these publications provide a solid foundation to the work of the GCN, they are just part of a much bigger picture. In response to an appeal from leading executives and experts of the Forum’s Travel and Tourism industry group, the GCN began work on designing a Travel and Tourism Competitiveness Index to capture the attractiveness of a large number of countries as tourist locations. A Travel and Tourism Competitiveness Report will be launched in early 2007 and will provide a powerful tool for industry members to enter into informed dialogue with policy-makers, to identify areas for potential reform in the sector. The GCN played a major role in a series of private/public sector roundtables. The first such event was held in April Creating knowledge networks | 23

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“

My association with the World Economic Forum began in the year 2000. It was the dawn of a new millennium and both Infosys and India were beginning to reap the benefits of integrating into the global economy. However, it was our firm belief that the 21st century global company should benefit society as well as its shareholders. Working with the Forum on public-private partnerships in addressing today’s social and economic challenges seemed the natural thing to do. I have always been impressed by the diversity of ideas and clarity of thought expressed at the Annual Meeting as well as the regional meetings. My involvement with the International Business Council has given me the opportunity to share action-oriented solutions with visionaries who seek to make a positive difference. I was honoured when the Forum invited me to be a member of their Foundation Board in January 2006 and am keen to continue contributing to the fulfilment of the Forum’s objectives in improving the state of our world.

“

NANDAN M. NILEKANI PRESIDENT, CEO AND MANAGING DIRECTOR, INFOSYS TECHNOLOGIES LTD, INDIA

in Brussels with Viviane Reding, EU Commissioner for Information Society and Media. Another took place at the World Economic Forum on the Middle East in May.

asked to contribute, the Global Risk team were involved in more than 20 events during the year.

In 2005–06, the GCN and the Forum’s Arab Business Council (ABC) continued efforts to become a catalyst of the creation of national competitiveness councils in the Middle East. At a Competitiveness Council Workshop, organized by the Forum’s GCN and Middle East teams in June 2005, Bahrain launched its National Competitiveness Council. Jordan, Syria, Qatar, Tunisia and the United Arab Emirates have expressed interest to follow suit. The ABC and GCN teams are working on developing the next steps.

Meanwhile, the Global Risk Update 2005 was used extensively by Forum members and partners as the basis for exploring the changing risk landscape with their own potential external business partners. It also served as a valuable tool in allowing GRN partners to place their business risks in context and to elaborate risk mitigation ideas, a process that will continue through further collaboration with the Forum. And, via a partnership with the University of Pennsylvania Wharton School, the GRN sharpened its methodologies of analysing global risk.

The GCN collaborates with key Forum members and partners. In 2005/2006, we partnered with FedEx, Gallup International and Microsoft, as well as external organizations, including the InterAmerican Development Bank, Transparency International, USAID and the World Bank.

The GRN’s work will provide a sound knowledge base for regional meetings and Industry Partners, as well as deepening the engagement with the academic side of the network.

www.weforum.org/gcn Global Risk Network In an increasingly complex and interconnected world, risks can no longer be contained within geographical or industrial boundaries. The Global Risk Network (GRN) was founded by the World Economic Forum in 2004 to advance new thinking on global risks; to generate risk mitigation measures; and to integrate knowledge on global risks. This year, the programme moved forward with the particular help of several strategic partners. The GRN’s work this year culminated in the release of the Global Risk Update 2006 at the Annual Meeting 2006. This was, however, one part of a larger programme. Throughout 2005, the expanding GRN held risk-specific workshops in London, Zurich and New York, bringing together academic and business network members to discuss global risks. Including sessions and workshops at the Annual Meeting 2006, regional meetings, and other events to which it was 24 | Creating knowledge networks

www.weforum.org/globalrisks Scenario Planning Since its inception two years ago, the Forum’s Business Insight/Scenario Planning team has, in collaboration with a global network of experts, launched large-scale scenario projects on the future of India, China and Russia within the global context. The projects look at the way each country might develop in the long term and explore possible challenges, along with potential outcomes. While providing valuable insights into the potential growth of the countries under review, the scenarios will also be used to explore future trade and foreign direct investment dynamics in the regional meetings of Africa, India and China. The India scenarios – co-developed with the Confederation of Indian Industry – were launched both in India and at our Annual Meeting 2006. They are currently being used for stakeholder debate within India, thus strengthening the regional agenda.

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The Russia scenarios were at the core of the World Economic Forum in Russia and the Energy Industry Partnership in 2005, while the China scenarios were central to the IT/Telecoms and Energy Industry Partnerships. Both were also launched at the Annual Meeting. The scenarios examine such issues as global integration, geopolitical stability, employment, demographics, infrastructure, leadership, administrative reform, political reform and rural development. They aim to develop a shared understanding from which business leaders, policy-makers and other key decision-makers can implement strategies beneficial to their countries and the world.

Forum Faculties The activities of the Global Competitiveness Network, the Global Risk Network and Business Insight/Strategic Planning benefit greatly from the support of the Forum Faculty. The faculty is one of our richest sources of intellectual capital. Its members include many of the world's most distinguished thinkers, experts, scientists, commentators and cultural leaders. Faculty members contribute to the identification of issues and development of content for regional events and the Annual Meeting; participate in discussions at our events; and assist in workshops, Governors Meetings and Industry Partners activities.

The Scenario Planning team also began far-reaching projects in other areas. These included: an 18-month examination of the future of the Gulf States within the regional and global context; the convergence between the IT, telecoms, and media and entertainment sectors as part of the Industry Partners Programme, and the future of technological innovation in financial services.

Discussion during a WorkSpace session in Sharm El Sheikh, Egypt

Creating knowledge networks | 25

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Disaster Resource Network-India provided technical assistance on the project of constructing 400 shelters in the Poonch District of Jammu and Kashmir (India)

26 | Building public-private partnerships

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Building publicprivate partnerships As one of the leading advocates of the concept of good corporate citizenship, the World Economic Forum has always upheld the conviction that business has a central role to play in society – a conviction that is shared by our members and partners. Today’s complex global challenges cannot be solved by one agency alone. That is why we believe in facilitating public-private partnerships, so that many necessary advances can be achieved – with stakeholders such as governments and NGOs working closely with companies to apply the resources and competencies of business for the benefit of all. The Forum’s Centre for Public-Private Partnership engages Forum members with governments, international bodies and civil society organizations in practical initiatives to drive more effective action or improve public policy on global and regional problems. Such initiatives form an important part of the Forum’s Industry Partners Programme. Ongoing initiatives in health, water, education and climate change see Forum members making important contributions, alongside other companies, governments and NGOs. In 2005/2006, new partnerships were launched to combat hunger in Africa and improve private sector cooperation with United Nations disaster relief efforts. Global Health Initiative The Global Health Initiative (GHI) built momentum during another strong year by further engaging businesses in public-private partnerships to fight HIV/AIDS, TB and malaria, and helping promote important new projects. The launch of a new programme – HIV/AIDS: Going Beyond Big Business – explores how companies, such as our Industry Partners Eskom, Unilever and

Volkswagen, can work with governments, NGOs and international organizations to help their small and medium size suppliers establish HIV/AIDS workplace programmes. The programme has the potential to reach one million employees in small and medium size enterprises. The GHI provided a platform for and led the launch of the Global Plan to Stop TB by 2015 at the Annual Meeting 2006. This new plan aims to treat 50 million people and prevent 14 million tuberculosis deaths worldwide over the next ten years through an alliance of 400 organizations. The first of their kind, the international Malaria Workplace Guidelines were developed and designed by the GHI to help businesses in malaria-endemic countries control the disease in the workplace and the wider community. Water Initiative The Forum’s Water Initiative enabled the public and the private sectors to work more closely this year. One key development was the establishment of an Indian Business Alliance on Water with the United States Agency for International Development, the United Nations Development Programme and the Confederation of Indian Industry. This alliance aims to improve the availability and quality of water in India. It will act as a platform to launch a series of water projects in India. The first project, conceived at the Annual Meeting 2006, is a state-wide public-private-community partnership on water in Rajasthan. Work is also in progress related to waste water reuse, infrastructure development and policy dialogue in both India and Southern Africa. Global Education Initiative Education for the next generation of the world’s growing population is an urgent priority for us all. The World Economic Forum’s Global Education Initiative (GEI) aims to utilize the strengths of the private sector, along with Building public-private partnerships | 27

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government and civil society, to support education reform. Through a sustainable and collaborative approach, new technologies, especially in information and communication technology (ICT), have modernized educational systems, skills development and quality learning. The Jordan Education Initiative, the Forum’s first publicprivate partnership launched in 2003, has helped 82,000 students and trained over 3,500 teachers in the public education system. In Jordan, 100 discovery schools are now fully networked and connected, with access to computer labs. We have applied learnings from Jordan to other new education initiatives. The Rajasthan Education Initiative, for instance, is applying innovative and locally appropriate public-private partnership models to improve educational outcomes, while the Egyptian Government, through the Egyptian Education Initiative, is targeting 650,000 students and 70,000 teachers in 2000 schools. We are now working with our GEI partners to develop a set of activities to impact and catalyse education public-private partnerships on a global level, partnering with key education institutions such as UNESCO. Climate change Building on the successful G8 Climate Change Roundtable process at the Annual Meeting 2005, the World Economic Forum has been invited by the UK Government to contribute to a new project on climate change. The G20 ‘Gleneagles Dialogue’ was launched in September 2005, and will last up to the G8 Summit under Japan’s Presidency in 2008. This dialogue process will involve a series of meetings to shape policy recommendations on climate change for the period 2008–2012 and beyond. The Forum is proud to be part of this important dialogue and to give businesses the opportunity to add their input to the process. Engagement in the Gleneagles Dialogue complements our other areas of climate change work, such as our Global Greenhouse Gas Register, the development of Voluntary 28 | Building public-private partnerships

Carbon Standards, and a global register of offset projects that aim to reduce carbon dioxide emissions. Global Governance Initiative The Global Governance Initiative (GGI) monitors the efforts of governments, the private sector, international organizations and civil society towards achieving the United Nations Millennium Development Goals on international development, security and environmental protection. The GGI released its third annual report in January. For the first time since its inception, the report declared the world had improved its efforts in the areas of peace and security, poverty, hunger, health and education. This suggests that the focus given to poverty, Africa and development issues by a raft of 2005 events – the G8, high-profile campaigns such as Make Poverty History and the Live 8 concerts, and new policies in major developing countries – had a genuine impact. Efforts to improve the environment and human rights, however, slipped backwards in 2005. The findings of the report, based on working groups of internationally renowned experts, were presented to world leaders at briefings in Washington and Davos and widely disseminated through the media. The project has helped chart a course for world leaders to improve progress toward global commitments over the course of three years. Council of 100 Leaders: West-Islamic World Dialogue (C-100) During the year, the Forum’s Council of 100 Leaders: West-Islamic World Dialogue (C-100) – a community that promotes understanding and cooperation between Western countries and countries with predominantly Muslim populations – had a number of successes. The council’s ‘Action Track’ raised US$ 1.2 million funding for four NGO projects through the generosity of HRH Prince Al Waleed of Saudi Arabia and our Industry Partner Xenel/Saudi Cable. The C-100 also coordinated with Islamic Relief to give prominence to the Humanitarian Forum for expanding safe charitable giving.

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“

Through my interactions with the World Economic Forum, I’ve seen the positive impact public-private partnership can have on global issues such as education. My parents, who were both doctors, taught me the importance of a good education, and I truly believe that education and the internet are the two great equalizers in life. Entire countries are using education and information technology to lift themselves out of poverty and compete successfully in the global marketplace. I am extremely proud of Cisco’s involvement in the Forum’s Global Education Initiative and it’s truly an honour to be part of such a groundbreaking educational model. What began in 2003 as an educational pilot in Jordan has today become a model that is being replicated in countries like Egypt and India with the potential to be replicated around the world. This exemplifies what can be achieved when public, private, and NGO organizations join together to give back, make a difference, and improve the state of the world.

“

JOHN T. CHAMBERS PRESIDENT AND CEO, CISCO SYSTEMS, USA

In addition, it played a key role in raising US$ 1.7 million from Forum member IBM for the C-100 endorsed Meadan project, which will build technologies to bridge the divide between the Islamic world and the West. One particular highlight of the year was the inaugural C-100 Award, which was launched at the Annual Meeting 2006. It was presented to boxing legend Muhammad Ali for promoting dialogue and cooperation. Information Technology Access for Everyone On the basis that new models of collaboration were required to close the divide between those who have access to the benefits of technology, and those who do not, the CEOs of many of the world’s leading technology companies mandated the establishment of World Economic Forum’s IT Access for Everyone Initiative (ITAFE). By surveying over 50 ICT projects in developing and emerging countries, ITAFE established that the best solution involved a robust ecosystem of participants, and the right business model for long-term sustainability. This involves the collaboration of multiple partners from the public and private sectors and the local NGO community in tackling specific individual needs: education, employment and health.

Disaster Resource Network The goal when facilitating many of our public-private partnerships is for the programme to ultimately be self-sustaining and successfully run itself. The Disaster Resource Network (DRN) is a perfect example of this. The DRN is helping companies around the world play an increasingly important role in international disaster preparedness and response operations. In 2005, the DRN and corporate partners in engineering, construction, telecommunications and logistics put their resources to work on the ground following the tsunami, the South Asia earthquake and Hurricane Katrina. In the aftermath of the earthquake, 400 families in Gujarat, India moved into newly constructed transitional shelters; more than 3,000 injured people in the Allai Valley received emergency medical care; and thousands of others benefited from an airlift of US$ 3 million of highpriority relief supplies – medicine, hospital equipment, blankets, six-person thermal tents, generators and water sanitation equipment. www.weforum.org/initiatives

Partnering with Brazil’s largest education foundation, Fundação Bradesco, ITAFE piloted a job training and job search service in a local community in São Paulo. Through the use of agents carrying handheld devices, and special centres equipped with computers, individuals were able to learn certain skills and discover what jobs were available. This pilot programme is now permanent, run by Fundação Bradesco.

Building public-private partnerships | 29

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529

Member and Partner companies involved in public-private partnerships organized by the Forum

Peter Brabeck-Letmathe, Chairman and CEO, Nestlé, at the Annual Meeting 2006 in Davos 30 | Working with our members and partners

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“

As CEO of a company with revenues derived primarily from food packaging, I am acutely aware that chronic hunger is a daily problem for over 850 million people a year, shortening lifespans and damaging health, while creating a major barrier to development. I believe that businesses such as ours have a moral obligation to take action to alleviate chronic hunger. However, this complex problem can only be solved through partnership between business, government, NGOs and civil society – making a real, sustainable difference requires a joined-up approach. The World Economic Forum has provided a platform to create and launch the Business Alliance Against Chronic Hunger, a multistakeholder group which will work to solve the root causes of hunger, starting on the ground in Siaya District in Kenya. For me, this initiative clearly demonstrates how the World Economic Forum, and its Industry Partners, can translate intentions at the highest level into on-the-ground action.

“

WILLIAM HICKEY CEO, SEALED AIR, USA

Working with our members and partners The businesses that we work with – across all industry sectors and geographical regions – bring a level of expertise that plays a vital role in our initiatives and programmes. Members Our members represent the world’s foremost 1,000 global companies. Characteristics of members include: • their rank among the top companies within their industry and/or country • the global dimension of their activities • their leading role in shaping the future of their industry and/or region Organizations that apply to become Forum members undergo a rigorous selection process based on strict rules. On average, our membership committee accepts just one out of every five applications. Those that are chosen to become members are leaders in their sector or region and demonstrate creative and innovative solutions to some of the world’s most challenging problems. As core to all our activities, members exhibit their commitment to the mission of the Forum by engaging at the Annual Meeting and in our various regional activities or initiatives and programmes. Be it the sharing of best practices in the management of HIV/AIDS in the workplace, the active contribution on the advisory board of one of our Industry Partners Programmes or the engagement in one of our regional events, the Forum is in a unique position of being able to provide its members with the platform for the voice of global business.

In 2005/2006, 107 new members were selected to join the Forum’s growing community. They were: Abdulhadi A. Al Qahtani Sons Group Adveq AFLAC Inc. Akzo Nobel NV Alghanim Industries Altimo Aluminium Bahrain American Express Company APEX-Brasil (Trade and Investment Promotion Agency) Areva Autodesk Inc. Barrick Gold Corporation Bayer AG Biocon India British Airways Plc British Columbia Hydro and Power Authority Cambridge Energy Research Associates Inc. (CERA) Carlson Wagonlit Travel SAS Central Bank of Nigeria Cerberus Capital Management LP China International Capital Corporation Limited China Mobile Communications Corporation China Petroleum & Chemical Corporation (Sinopec Corp.) Compagnie Financière Tradition Daiichi Pharmaceutical Co. Ltd E*Trade Financial Corp. EFG – Hermes Holding EFG International EgyptAir Electronic Arts Inc. EMC Corporation Emirates Telecommunications Corporation (Etisalat) Energie Baden-Württemberg AG (EnBW) Erste Bank der Oesterreichischen Sparkassen AG Federal-Mogul Corporation Fonterra Co-operative Group Limited Freescale Semiconductor Inc. Gilead Sciences Inc. Government of Rajasthan Grupo Omnilife Gucci Group Gulf Finance House Humana Inc. Huntsman Corporation Hyundai Motor Company IDB Holding Corporation Ltd Italcementi SpA JFE Holdings Inc. KarstadtQuelle AG Kuwait Petroleum Corporation Lagardère SCA LANXESS AG Lenovo Group Limited Linklaters Marinopoulos Brothers Merck KGaA Molson Coors Brewing Company MTV Networks Mubadala Development Company Munich Re (Münchener Rück) Nakheel National Health Service (NHS) Nigerian National Petroleum Corporation (NNPC) Nile Clothing Company Norsk Hydro Asa OJSC Telecominvest Omnicom Group Inc. Oriental Weavers Group PADICO Pakistan International Airlines PIA Pantech Group Petrol Ofisi AS PGSI Limited Phoenix Satellite Television Co. Ltd Playtex Products Inc. Polska Grupa Farmaceutyczna SA Pomona Capital Port of Rotterdam PT Bank Mandiri (Persero) PWC Logistics Qatar Financial Centre Quadrangle Group LLC Reliance Energy Ltd Royal & SunAlliance Insurance Group Plc Russian Aluminium (RusAl) JSC Sace SpA Satyam Computer Services Ltd SBS Seoul Broadcasting System (SBSi) Schering-Plough Corporation Serco Group Plc Shinsei Bank SVB Capital Symantec Corporation Telenor ASA The Exxel Group The Nigerian Stock Exchange The St Paul Travelers Companies Inc. TMK Tupperware Brands Corporation UBA Group Union Bank of Nigeria Plc US Trust Corporation Visteon Corporation Warburg Pincus LLC Warner Music Group (WMG) Washington Mutual Inc. (WaMu) WI Harper Group Inc.

www.weforum.org/partners

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Strategic Partners The Strategic Partners of the World Economic Forum are one of the driving forces behind our activities and communities and are actively involved in our endeavours at the global, regional and industry levels. Drawn from the leading corporate global citizens, they provide essential leadership in support of the Forum’s mission to improve the state of the world.

The newly formed Partners Advisory Group met twice to provide input into the global agenda. As a group, they are the best representatives of global, multi-sectoral business perspectives and their input generated over 30 sessions. Their perspectives on the programme helped ensure that more sessions at the Annual Meeting had practical business value to participants. As at 30 June 2006, our Strategic Partners are:

Our Strategic Partners help shape our initiatives, projects and task forces and provide intellectual guidance through the participation of their most senior executives in steering boards and advisory groups as well as through seconding dedicated staff to the Forum’s operations. Without their considerable financial support and in-kind services, the Forum would not be able to deliver its programmes and advance worldwide economic and social progress. During the last year, the number of companies involved with the World Economic Forum at this level increased from 49 to 60 companies, from virtually every industry sector. In addition, their individual support and engagement in our activities, public-private partnerships and communities increased significantly. As part of their strategic partnership, companies support the Forum’s industry partnerships and regional summits. Strategic Partners played an active role in the Forum’s industry workstreams, meetings and projects. The new communities of the Forum, such as the Forum for Young Global Leaders and the Global Growth Companies programme, each had between two and five Strategic Partners involved at their early stage of development to help shape their programmes and activities.

32 | Working with our members and partners

ABB Accel Partners Accenture AMD Apax Partners Audi Avaya Bain & Company Barclays Bombardier Booz Allen Hamilton British Telecom CA Cisco Systems Citigroup Credit Suisse Deloitte Deutsche Bank Deutsche Post World Net Deutsche Telekom Dubai Holding E*Trade Financial Corp. Economic Development Board of Bahrain Ernst & Young Fluor Corporation Goldman Sachs Google HP HSBC Infosys Technologies Intel Corporation Investcorp JPMorgan Chase KPMG Kudelski Group Lehman Brothers Manpower Marsh & McLennan Companies McKinsey & Company Merck & Co Merrill Lynch Microsoft Corporation Nakheel NASDAQ Nestlé New York Stock Exchange Nike PepsiCo Pfizer PricewaterhouseCoopers Qatar Airways Reliance Industries Saudi Basic Industries Corporation Siemens Swiss Re The Coca-Cola Company UBS Volkswagen WPP Zurich Financial Services.

www.weforum.org/strategicpartners

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“

The World Economic Forum is a great example of how the public and private sectors can join together to foster creative and innovative ideas that address some of society's most difficult challenges. Microsoft is committed to improving affordability and technology access for underserved populations and helping to create opportunity through economic development. As a result, we will continue to partner with a wide range of organizations, including the World Economic Forum. I strongly believe that these partnerships are essential if we are going to achieve the high ambitions that the World Economic Forum has set for addressing critical issues around the world.

“

BILL GATES CO-FOUNDER, BILL AND MELINDA GATES FOUNDATION; CHAIRMAN AND CHIEF SOFTWARE ARCHITECT, MICROSOFT CORPORATION, USA

Engaging our communities and constituencies A key driver behind the World Economic Forum’s activities are the communities of member and partner companies. We have developed specific capabilities to foster these communities and encourage them to interact. The Forum of Young Global Leaders In its first full year, the Forum of Young Global Leaders made an immediate impact on a number of our programmes as well as expanding its community of dynamic and inspiring individuals all aged under 40. In January, our selection committee, composed of media leaders and chaired by Queen Rania of Jordan, announced the new class of 180 individuals. The community now has 415 members from 90 different countries representing all regions and stakeholder groups. Since their inaugural summit in June 2005, the Young Global Leaders have created several task forces in the areas they consider will be priority concerns for the world in 2020. One such project is Reinventing Aid, which studies how international aid needs to be rethought in order for the world to meet the Millennium Development Goals. Other areas of focus include health, education, global governance and security, and the environment. In addition, in response to an appeal from Young Global Leaders in Pakistan after the October 2005 earthquake, a delegation visited the affected areas and set up a task force to contribute to the reinvigoration of the tourism infrastructure that is critical to economic recovery. At their second Annual Summit, held in Vancouver, Canada, in June 2006, Young Global Leaders

brainstormed on the theme ‘Innovations 4 the future’, and continued the work on their task forces to shape the world in 2020. Significant progress was achieved on several fronts: for example, to address global climate change, a group of YGLs decided to launch a series of actions to raise awareness among leaders and the public, engage the private sector in focusing on business opportunities and spread best practices to change consumer behaviour. The voice of the younger generation of leaders was integrated throughout the year’s activities, both at the Annual Meeting in Davos – where 150 Young Global Leaders participated actively across all sessions – and at our regional events. The Schwab Foundation for Social Entrepreneurship The World Economic Forum works closely with the Schwab Foundation for Social Entrepreneurship to support profitable businesses with a public purpose. Together, the two organizations aim to open up networking opportunities to visionaries who have a driving passion to improve society. The support of the foundation has allowed high-impact social entrepreneurs to mobilize millions of dollars of investment and to serve as inspirational role models in their countries and around the world. In 2005, the foundation spearheaded an effort with media partners in 24 countries worldwide to search and select the ‘Social Entrepreneur of the Year’ in each of those nations. The foundation screened over 2,000 candidates, with finalists and winners being selected by national selection committees of business and thought leaders in each participating country. All the winners have since become members of the foundation. The community today is made up of 100 leading innovative entrepreneurs, whose initiatives have the capability to be replicated to resolve similar challenges elsewhere.

Engaging our communities and constituencies | 33

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“

For almost two decades, PricewaterhouseCoopers has been a dedicated supporter of the World Economic Forum. I have personally been involved with the Forum for many years and have observed the important difference it makes – in both significant and subtle ways. On a global scale, the Forum brings together thought leaders to expand the dialogue on, and seek solutions to, key issues of the day – from global economic growth to critical social problems. My involvement with the Forum’s International Business Council gives me a deeper understanding of critical issues facing the leaders of today’s businesses, such as global risks and trade. Then there are the successful regional, industry and partner events where I, along with others, have the opportunity to engage in dialogue with political and business leaders and establish valuable relationships. It is my fervent hope that the Forum will continue to create foundations of understanding and pathways to future solutions. I value and appreciate the Forum’s ongoing commitment to improving the state of the world through thoughtful and intelligent dialogue with world leaders.

“

SAMUEL A. DIPIAZZA, JR GLOBAL CEO, PRICEWATERHOUSECOOPERS, USA

The International Business Council The International Business Council (IBC) is a community of 100 highly respected and influential chief executives from all industries. As in previous years, the IBC gathered twice during the last 12 months for peer exchanges on global risks which were the cornerstone of the IBC Summer Meeting. Also, just two weeks before her party won the German election, the IBC met with Angela Merkel – now German Chancellor – to discuss her vision for her country in the context of Europe. At the IBC’s Winter Meeting, which took place at the Annual Meeting 2006 in Davos, the council exchanged views with Zeng Peiyan, Vice-Premier of the State Council of China, about the country’s new five-year plan. They continued their trade dialogue during a joint, private IBC session with some of the key trade dealmakers, including: Peter Mandelson, Trade Commissioner at the European Commission; Celso Amorim, Minister of Foreign Relations for Brazil; Pascal Lamy, Director-General of the World Trade Organization; Robert Portman, US Trade Representative; and Mark Vaile, Deputy Prime Minister and Minister for Trade, Australia. In addition, the IBC members had an opportunity to meet in private with Chinese Premier Wen Jiabao in Beijing on 13 June prior to the official launch of the Community of Global Growth Companies and the opening of the Forum’s new office in the city. Women Leaders Programme Through our Women Leaders Programme, the Forum is committed to promoting women’s leadership and the issues affecting women’s lives globally. The proportion of women participating in the Annual Meeting 2006 increased to 16%. In 2005, the programme launched its first Gender Gap study, a new benchmarking tool ranking countries according to the size of the gulf between the sexes in critical areas such as political empowerment, health, educational attainment and economic opportunity. Based 34 | Engaging our communities and constituencies

on the reception this study received, we are currently working on the second in the series. Through the creation of a new Gender Gap Network, the Women Leaders Programme reaches out to appropriate policy-makers to ensure effective dissemination of, and action around, the information revealed by the study rankings. Civil society organizations Civil society organizations continue to occupy a central position within the Forum’s multistakeholder platform. Their unique expertise and far-reaching influence in a variety of fields make them valuable collaborators in a number of our initiatives and programmes. At both the Annual Meeting 2006 and the regional events, civil society organizations, including nongovernmental organizations (NGOs) and labour leaders, played significant roles in defining the global and regional agendas. NGOs also continue to provide substantive input and guidance to a number of Forum workstreams and activities. As the new Centre for Public-Private Partnership evolves and deepens its activities, it is expected that NGOs will form an integral part of its framework, helping to shape specific initiatives in important ways. www.weforum.org/aboutus

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The work of social entrepreneurs of the World Economic Forum has improved the lives of over

650

million people

Yoel Sharon, Israel’s Social Entrepreneur of the Year, co-founded Etgarim to help thousands of people with disabilities and special needs to participate in adventure sports

Engaging our communities and constituencies | 35

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1

3

2

Our organization 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. In 2005/2006, the Managing Board consisted of: Klaus Schwab, Executive Chairman (1) Ged Davis (5) Michael Obermayer (6) Jean-Pierre Rosso (7) Rick Samans (3) André Schneider (4) Peter Torreele (2) For more information about the Managing Board, visit www.weforum.org/leadershipteam The Foundation Board The Foundation Board is responsible for inspiring business and public confidence by ensuring an exemplary standard of governance. Board members are individuals with unique leadership experience from business, politics, academia and civil society. They do not represent any personal or professional interests, solely those of the Foundation. The Board’s role includes: managing the statutes of the World Economic Forum; appointing new members; approving and monitoring the execution of Forum strategies; defining the roles of the Managing Board and committees; approving the annual accounts; and acting as the Board of Trustees and the guardian of the Foundation’s mission, values and brand. Board membership criteria include: integrity, global vision, leadership experience and engagement in world affairs.

36 | Our organization

In November, the Foundation Board discussed and approved the Roadmap 2008, which had been prepared by the Managing Board, outlining the Forum’s strategy for the next three years. The Foundation Board also approved the opening of the Centre for Global Industries in New York. In its January 2006 meeting, Carlos Ghosn, President and CEO of Renault and of Nissan Motor Company, and Nandan Nilekani, President, CEO and Managing Director of Infosys Technologies, were unanimously elected new members of the board. During the same board meetings, William Turner, who has served as member and Vice-Chairman for many years, stepped down, having reached the Forum’s retirement age, and Caio Koch-Weser resigned from the Board, after having left the German Government. The Board expressed its great appreciation for their engagement and friendship. On 30 June 2006, the Foundation Board consisted of: • Klaus Schwab, Executive Chairman • Josef Ackermann, Vice-Chairman • Henry A. McKinnell, Vice-Chairman • Kurt Alig, Secretary • Peter Brabeck-Letmathe • Lord Carey of Clifton • Victor L. L. Chu • Flavio Cotti • Michael S. Dell • Niall FitzGerald • Orit Gadiesh • Carlos Ghosn • Rajat Gupta • Nobuyuki Idei • Maurice Lévy • Nandan Nilekani • Heinrich von Pierer • HM Queen Rania of Jordan • Peter Sutherland • Ernesto Zedillo

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4

5

6

7

The Committees of the Foundation Board The Foundation Board appoints four committees from among its members: • The Executive Committee exercises the overall strategic management of the Foundation 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, evaluates their performance and determines their remuneration. • The Mission Compliance Committee reviews Forum policies, strategies and activities in light of its mission. For more information about the Foundation Board, visit www.weforum.org/foundationboard Structure The Forum’s structure consists of six core departments: the Centre for Global Industries, Regional Agenda teams, the Centre for Public-Private Partnership, the Strategic Insight teams, Communications, and Events and Resources Management. Centre for Global Industries – The Centre for Global Industries (Geneva) houses our Swiss-based industry teams. Together with their counterpart teams from our affiliate, the World Economic Forum USA (see page 41 for detail about its organization), these teams are responsible for managing relations with global communities of business leaders drawn from over 15 industry sectors. They are committed to fostering engagement between Forum members through the Industry Partners Programme. This year’s priorities include continuing to expand the Industry Partners Programme to include at least eight active industry sectors.

regional and global trends to understand how they affect an increasingly interconnected world. The Centre for Public-Private Partnership – The Centre for Public-Private Partnership was created by the World Economic Forum to broaden the application of public-private partnerships to some of the world’s most pressing problems. The Centre consolidates all our task forces and initiatives and is a comprehensive resource for companies seeking to engage with the public sector to tackle global issues. The Strategic Insight teams – The Strategic Insight teams work with the Forum’s network of communities, such as business leaders, NGOs and policy-makers, to create relevant strategic insight. The Centre has four core teams focusing on scenarios, the global agenda, economics and competitiveness, and global challenges. Communications – The Communications department consists of three teams, focusing on the Forum’s website, publications and media relations. The three teams work together to publicize the Forum’s work and to explain to both members and non-members how we deliver on our mission. Events and Resources Management – Each year the World Economic Forum brings together thousands of decision-makers in meetings and regional events to address the most crucial issues facing mankind. To maintain quality and effectiveness our participants have come to expect, our experts in event management, IT, human resources, accounting, controlling, security, operations and general services work closely throughout the year. Their unique knowledge and experience result in the delivery of these high-calibre events.

Regional Agenda teams – The Regional Agenda teams deliver value to actual and potential members via a series of regional and national meetings. The department has six regional teams who focus on the most important Our organization | 37

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The World Economic Forum employs

231

people from 43 nations

The World Economic Forum staff in front of the Cologny/Geneva headquarters

38 | The Forum community

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The Forum community Our people The skills, knowledge and dedication of our people at the Forum are essential to fulfilling our mission. This year, we recruited a number of new people, thus expanding and reinforcing our skills base to better support our members. Notable among these recruits were the 47 Global Leadership Fellows who contributed to a very successful first year for our Global Leadership Programme. Our total headcount is now 231, compared to 192 the previous year. Reflecting our diverse, multistakeholder focus, our people are drawn from 43 countries, and two-thirds are women. Forum employees remain highly skilled, with 83% being graduates and 7% holding a PhD. Their learning and experience are complemented by their youth, with the median age being 35 years old. The Forum was delighted to be one of the first three bodies ever to receive a ‘Label for Corporate Social Responsibility’, from the Swiss social responsibility group ‘Stiftung sozialverantwortliche Wirtschaft’ (SWW: Foundation for a Socially Responsible Economy). The prize is awarded to organizations that take their responsibility towards employees, customers and the community seriously. Qualifying criteria include equal opportunities and family-friendly policies, motivation and participation, health and accident prevention, and training and further education.

Nationality American Argentinian Australian Belgian Bolivian Brazilian British Canadian Chilean Chinese Danish Dutch Egyptian Ethiopian Finnish French German Guatemalan Hungarian Indian Irish Italian

28 1 5 3 1 2 18 7 1 4 2 8 1 1 1 21 15 1 1 5 2 14

Nationality Japanese Kenyan Latvian Lebanese Mexican Moroccan New Zealander Nigerian Pakistani Polish Romanian Russian Singaporean Slovak South African Spanish Sri Lankan Swedish Swiss Thai Tunisian Grand Total

2 1 1 3 2 3 1 1 2 3 2 3 1 1 4 4 1 5 51 1 1 231

The Forum community | 39

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Chairman’s Office Klaus Schwab, Executive Chairman. Claudia Gonzalez, Fiona Paua, Stéphanie Nassenstein, Regula Waltenspuel, Maryse Zwick Centre for Global Industries Jean-Pierre Rosso, Chairman. Stefano Ammirati, Delphine Angelloz-Nicoud, Roy Antink, Sandra Bétemps, Théa Chiesa, Séverine Currit, Louise Dearnley, Sean Doherty, Melanie Duval, Cristiana Falcone, Christoph Frei, Nadia Guillot Socquet, Helena Leurent, Coretta Magongoa, Yasmina Makar, Marcello Mastioni, Heidi Morgan, Simon Mulcahy, Arseni Panov, Wouter Savrij Droste, Preeti Sinha, Martha Stack, Max von Bismarck, Silvia von Gunten, Alex Wong Partnership David Aikman, Director, Head of Partnership. Valérie Aillaud, Mireille Bertolini Cabezas, Chris Cooper, Susanne Helmsley, Anna Janczak, Jonathan Quigley, Elena Smirnova, Jessica Thyssen Regional Agenda teams Peter Torreele, Managing Director. Haiko Alfeld, Mercedes Aubert, Yemi Babington-Ashaye, Thomas Berglund, Helen Besson, Søren Bested, Shruti Bhatia, Els Boekhoudt, Nadia Boulifa, Fabienne Chanavat, Daniel Davies, Yvonne Diallo, Sherif El Diwany, Diana El-Azar, Anne Catherine Gay Des Combes, Serge Guex, Felix Howald, Lee Howell, Julianne Jammers, 40 | The Forum community

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Jeremy Jurgens, Béatrice Laenzlinger, Kate Lau, Yu Liu, Giuseppe Lorio, Macha Levinson, Emilio Lozoya, Dezhi Ma, Colette Mathur, Amal Mbarki, Grant McKibbin, Kazumi Okura, Satya Rajan, Sushant Rao, Lucien Rieben, Melanie Rogers, Karim Sehnaoui, Benita Sirone, Logan Stanton, Uschi Trouilhet, Akira Tsuchiya, Marika Volosin, Carolina Windmeijer, Li Zhang Governments and Stakeholders, Initiatives Rick Samans, Managing Director. Saman Ahsan, Sandra Costa-Marini, Lauren Johnston,Carina Larsfälten, Samuel Mbugua, Christophe Weber, Saadia Zahidi Centre for Public-Private Partnership Rick Samans, Managing Director. Pratik Bhatnagar, Francesca Boldrini, François Bonnici, Elizabeth Dreier, Brindusa Fidanza, Emma Jupp, David Kim, Randall Krantz, Jason Liu, Shruti Mehrotra, Tanya Mounier, Alex Mung, Pan Pan, Hala Shash, Paul Smyke, Clementina Todor, Chris Trimble, Dominic Waughray, Valerie Weinzierl Strategic Insight teams Ged Davis, Managing Director. Laura Altinger, Sven Behrendt, Jennifer Blanke, Nathalie Cerutti, Margareta Drzeniek, Charles Emmerson, Julio Estrada, Jesse Fahnestock, Ilaria Frau, Thierry Geiger, Paola Hjelt, Stéphanie Janet, Alia

Karaouni, Dimitry Leger, Emma Loades, Augusto Lopez-Claros, Thierry Malleret, Vladimir Merkushev, Irene Mia, Kathi Milligan, Sandrine Perrollaz, Michele Petochi, Marie-France Roger, Sarah Saffar, Jonathan Schmidt, Vidhi Tambiah, Sheana Tambourgi, Alexander van de Putte, Kristel van der Elst, Deming Zhu Leadership Micky Obermayer, Managing Director & Dean, Global Leadership Fellow Programme. David Heng, Juraj Ondrejkovic Chief Operating Officer’s Office, Events and Resources Management André Schneider, Managing Director & Chief Operating Officer. Chantal Adamson, Georges Aeschlimann, Anna Andersson Plusa, Helena Baars, Guy-Serge Baer, Virginie Bays, Grégory Bernarda, Kuki Bindanda, Monika Boerlin, Nadine Bonard, Doris Borchardt, Denise Burnet, Sebastian Bustos, Nancy Chazal, Raymonde Christmann, Antonio Corrales Rodriguez, Steve Crettenand, Romain Crevoisier, Irène CroisierRapin, Oliver Cusworth, Stéphanie Danhier, Laura de Wolf, Jean-Loup Denereaz, Laurent Desnoux, Samantha Dimeck, Maggie Fliege, Susi Franceschi, Floriane Freymond, Yannick Fuentes, Agnès Gabirout, Malte Godbersen, Karine Guitton, Elly Hammar, Janet Hill, Nour-Eddine Iguimdrane, George Jacovides,

Mirjam Kleinheerenbrink, Carine Kulloian, George Kumpera, Dan Lambert, Luis Landrove, Fabien Limousy, Sophie Lux, Samira Mandil, Martine Michaud, Annabell Molnar, Anouk Pache, Vimesh Patel, Annemarie Peter, Eddie Quintanella, Sarah-Jane Rossoni, Petra Ruiz, Mehr Ruiz-Faizi, Vincent Schertenleib, Angela Scioscia, Christel Sutherland, Paula Verholen Communications & Media Relations Mark Adams, Director, Head of Communications. Nina Joyce, Kamal Kimaoui, Matthias Lüfkens, Fon Mathuros, Désirée Mohindra, Tillia Peitrequin, Laurent Sfumat, Fabienne Stassen, Samantha Tonkin, Isabelle Tornare, Nancy Tranchet, Yann Zopf Schwab Foundation Pamela Hartigan, Managing Director. Maria Hermoso, Sandor Nagy, Mirjam Schoening Young Global Leaders Nicole Schwab Sanchez, Director, Head of Young Global Leaders. Martina Gmür, Francesca Martonffy, Rosanna Mastrogiacomo, Magdalena Thurig

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World Economic Forum USA In late 2005, the World Economic Forum formally expanded into North America with the creation of its first overseas affiliate, the World Economic Forum USA Inc. In April 2006, the Forum USA opened its New York office to house the new Centre for Global Industries and act as the global headquarters for industry-based activities of the Forum and the Forum USA. By July 2006, five industry sectors of the Centre for Global Industries have moved from Geneva to New York: banking, insurance, investors, diversified financials and healthcare.

As from 1 July 2006, the officers and employees of the World Economic Forum USA Inc. included: Jean-Pierre Rosso, Chairman. Kevin Steinberg, Chief Operating Officer; Alain Baumann; Josh Bell; Giancarlo Bruno; Julian Jaeger; Kerry Jaggi; Jane Lence; Viraj Mehta; Michael Seo.

With operations spanning New York and Geneva, the Centre for Global Industries will focus on developing the Industry Partners programme, which is aimed at engaging global companies in activities at the industry level. By the close of the 2005/2006 fiscal year, over 100 companies had formally joined the programme, including more than 50 from North America. The Forum USA ia a non-profit corporation formed under US (Delaware) law, with a separate board of directors and officers, which is intended to be exempt from US income tax as a business league under section 501(c)(6) of the Internal Revenue Code. The Forum USA and the World Economic Forum are linked by a formal affiliation agreement and a shared mission to engage leaders in improving the state of the world. The Board of the World Economic Forum USA Inc. comprises: • Jean-Pierre Rosso (Chairman) • Alfred Berkeley • Bill George • Rajat Gupta • Joe Schoendorf • Kevin Steinberg (Secretary)

The World Economic Forum USA celebrated its official opening by ringing the Nasdaq closing bell

World Economic Forum USA | 41

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Our financial results Our financial results In 2005/2006, we achieved strong financial results as income from all our initiatives and activities continued to grow. We did not touch our reserve funds during the year, despite investing a significant sum into the launch of our Industry Partner Programme and the Global Leadership Fellows. Among the most notable revenue drivers was the growing number of Forum members choosing to become partners and participating in our activities. In total, this trend added Sfr. 2,030,965 to our reserves. This figure was also due to cost efficiencies we achieved during the year. In finance, as throughout our organization, we aim for excellence. During the year, we took steps to make our approach compliant with US GAAP, pursued best practice across our processes and improved our internal reporting methods. Financial policy The World Economic Forum’s financial policy states that membership fees in principle should cover operational costs, that events are funded through cost contributions and that projects are supported by income from partnership contracts. The 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’. The World Economic Forum makes no payments to political personalities, parties or other organizations and avoids involvement in national politics.

42 | Our financial results

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 by law acts as the supervisory body for the Foundation.

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Year

2001/2002

2002/2003

2003/2004

2004/2005

2005/2006

Total income* out of which members’ fees participation fees partnership

72,195,453

66,454,727

74,058,911

83,336,839

104,766,543

24,965,367 26,972,981 18,946,940

25,530,325 21,465,398 17,390,452

25,137,257 20,543,108 24,552,385

26,546,382 20,824,213 31,035,927

26,410,294 27,063,138 44,668,943

69,077,008

66,454,522

72,307,790

82,083,503

102,735,578

27,097,659 10,642,445 31,336,904

26,584,768 8,360,352 31,509,401

29,620,236 9,044,738 33,642,815

35,723,308 9,253,213 37,106,982

40,035,452 12,537,175 42,732,347

3,118,445

205

1,751,121

1,253,336

2,030,965

12,114,753

12,114,958

13,866,079

15,119,415

17,150,380

139

130

134

162

204

4 28

4 28

5 28

5 31

7 25

Total expenditure out of which personnel costs office costs activity-related costs Surplus to be added to the Foundation capital Foundation capital Total staff Full time out of which seconded by Forum members Part time * all key figures in Swiss francs

Our financial results | 43

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Our mission and values The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. Incorporated by Professor Klaus Schwab as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. Our culture combines the best elements of entrepreneurship with those of public service. Thus, our motto is ‘entrepreneurship in the global public interest’. We cultivate public trust by never compromising our institutional integrity. We constantly strive to win the respect of our members and constituents by ensuring everything we undertake is ‘first in class’. We can serve our communities best by making ourselves a role model for a highly interactive, open and fast learning community.

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 The World Economic Forum enjoys unique global positioning by recognizing and responding to two 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). For more information see www.weforum.org

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. In addition to convening world leaders, the Forum aims to involve 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.

44 | Our mission and values

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Matthieu Ricard (Co-Director, Shechen Monastery, Nepal) being embraced by Awraham Soetendorp (Rabbi, Jewish Institute for Human Values, Netherlands), Hany el Banna (President, Islamic Relief, United Kingdom) and Madhi Bray (Executive Director, Muslim American Society (MAS) Freedom Foundation, USA)

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World Economic Forum 91- 93 route de la Capite CH – 1223 Cologny/Geneva Switzerland Tel +41 (0) 22 869 1212 Fax +41 (0) 22 786 2744 E-mail [email protected] www.weforum.org The annual report is available electronically at www.weforum.org/annualreport – also in Arabic, Chinese, French, German and Japanese versions.

Designed and edited by Wardour Publishing & Design Photos: R Kalvar (Magnum); Swiss Image

Annual Report 2005/06