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Christine Lagarde’s anticipated transition to lead the World Economic Forum is not anymore an “inevitable outcome”, as stated by individuals privy to the leadership transition arrangements at Davos.
Lagarde, who is anticipated to resign prematurely as European Central Bank president prior to the French polls, was generally favored to assume the role as the subsequent enduring head of the WEF, whose founder Klaus Schwab suddenly stepped down last year. She presently sits on its administrative council.
However, Lagarde has progressively been regarded among the Swiss entity’s council as a “Klaus’s candidate” — an apprehended association that could now disadvantage her, as per four individuals acquainted with the deliberations.
The leadership transition discourse is linked with a wider contention regarding the Davos forum’s prospective course, encompassing the degree of its inclination towards the United States.
Larry Fink, the BlackRock CEO who assumed the provisional co-chair position next to Roche vice-chair André Hoffmann last August, concluded January’s yearly gathering — the first without Schwab — with increased sway, multiple sources indicated.
Both Hoffmann and Fink will shortly remove the provisional designation from their positions, one source further stated.
The Davos assembly this year was considered an internal triumph, with US President Donald Trump’s presence highlighting the WEF’s sustained ability to bring together key figures.
However, Lagarde garnered notice when she departed during a discourse by US commerce secretary Howard Lutnick prior to its completion. Her exit was construed by certain participants as inconvenient, considering the prominent American delegation.
Disclosures regarding connections between WEF president Børge Brende and Jeffrey Epstein have also interrupted leadership transition arrangements, three individuals stated, instigating talks concerning a broader revitalization of governance. The forum declared an inquiry into Brende this month.
Throughout several decades, the WEF was regarded as a steady, founder-guided organization, but lately, it has faced a series of leadership disputes that have disrupted its closely integrated framework.
The schedule for any handover for the chair role has remained undefined for a considerable time. While Lagarde is intending to relinquish her position from the ECB prior to the conclusion of her octennial mandate, which extends until October 2027, it is imprecise precisely when that might occur.
Lagarde, via an ECB representative, refused to elaborate on the WEF. However, a person acquainted with her intentions indicated this week her desire to depart from the central bank prior to the French head of state ballot in April next year.
The ECB said she was “completely dedicated to her assignment and has made no determination concerning the conclusion of her tenure”. The WEF refused to provide a statement.
The FT has earlier documented that Lagarde convened with Schwab in Frankfurt in April last year and deliberated curtailing her ECB mandate to enable a transition to the WEF.
A few days following the Frankfurt meeting, Schwab was compelled to resign subsequent to a confidential disclosure to the governing board claiming grave impropriety.
A probe finished in August and uncovered no significant misconduct on the part of the Davos originator.
However, the incident initiated a broader reorganization and profoundly changed the leadership transition assessment, individuals acquainted with the circumstances stated. Following Schwab’s departure, some within and around the organization have become hesitant to seem excessively linked to the former administration.
Considering the wish to indicate a distinct separation, promoting an individual so intimately connected with Schwab might turn out challenging, one source revealed. “There is an aim to demonstrate the council is proceeding appropriately with recruitment specialists, instead of advancing an individual’s choice without a suitable procedure,” the source continued.
“Christine should not be regarded as an inevitability,” a second individual remarked, even though another portrayed her as an “excellent contender” who still retained a significant possibility.
Two high-ranking WEF officials privy to the governance deliberations said the US political and commercial delegation in Davos this year had communicated that Lagarde was not the favored American selection.
Fink’s progressively apparent interaction with American governmental personalities this year — including at Davos — led some to conclude he aimed to impact the ultimate choice as a method of altering the perspective of the organization.
He has also confidentially conversed about relocating the principal conference from its mountainous setting in Davos.
The inquiry into Brende’s connections with Epstein has contributed to apprehension within the entity, three individuals reported, strengthening an opinion among certain board members that additional disruption ought to be averted.
Records disclosed by the American Justice Department this year uncovered that the previous Norwegian minister of foreign affairs held multiple professional meals with Epstein in addition to a sequence of digital messages.
“While the Brende inquiry ought to span merely a few weeks, an impression exists that designating new leaders this year is not prudent,” one individual acquainted with the council’s perspective stated.
Further contributions by Eric Platt and Arash Massoudi