We’ve all read a great deal about DAVOS World Economic Forum (WEF) over the last few days discussing what the leaders of the planet will need to achieve. While the environment, and responses to crisis like Haiti will be sure to be a feature, the world in general will be looking for Davos to achieve is some progress on reforming the global financial system.
Considering the G20 and G7 and others have had a shot at this there is some indication that at DAVOS this year reform of the global financial system will continue to be the hot topic. The focus will likely be on the role of regulators, the flow of capital, interconnectedness of global capital markets and trade, and the way banks should work responsibly to free up capital and encourage liquidity. The forum is unlikely to get into specific discussions on the creation or structuring of financial instruments or speculative trading practices, rather sticking to the core principles of how the financial system can be better managed to prevent future problems.
The World Economic Forum is by invitation only and those that are invited are the undisputed world leaders in their fields. Typical participants include government representatives of the world’s top economies and fastest-growing small countries, heads of state like Vladimir Putin and Wen Jia Bao, government ministers for finance/economics, leaders from international NGOs, cultural and sports leaders such as U2’s Bono, and thought leaders like Bill Gates and Al Gore. The most influential voices and minds in the world today.
- DAVOS-KLOSTERS/SWITZERLAND, 28JAN09 – Wen Jiabao (L) , Premier of the People’s Republic of China and Klaus Schwab, Founder and Executive Chairman, World Economic Forum, captured during the session ‘Special Session with Wen Jiabao, Premier of the People’s Republic of China’ at the Annual Meeting 2009 of the World Economic Forum in Davos, Switzerland, January 28, 2009. Copyright by World Economic Forum swiss-image.ch/Photo by Monika Flueckiger
Looking through the World Economic Forum Programme for this coming weekend there are some incredible speakers and topics. James Cameron will be there to talk about directing Avatar. Reid Hoffman (Linkedin), Evan Williams (Twitter) and Owen Van Natta (MySpace) will be there to discuss the growing influence of social networks. Tim Brown (IDEO) and Gary Hamel (Author, MLab) will be there to discuss management innovation. Brian Moynihan, CEO of Bank of America, and others will be there to discuss redesigning capital markets. Bill and Melinda Gates will be there to discuss their foundation, and Melinda Gates will be discussing education for girls and how it effects economics in the developing world. This is just a small snapshot of the amazing depth to the forum, but something is missing.
The issue of customer advocacy and how input from customers is integrated into the strategy of an organization is completely absent from the forum. While management innovation, risk mitigation and big picture regulation and reform are being discussed, the voice of the customer is likely not to be heard this year at Davos. Why is that significant? When it comes to the financial crisis perhaps the most significant voices namely, the consumers who have been affected by the global financial crisis with job losses, foreclosures or mortgage repossessions and general economic challenges, are silent due to their absence. Interestingly while seeking to ‘fix the system’ the forum doesn’t actually appear to have any mechanism or sessions dedicated to these issues which are the primary outcome of the financial crisis.
While I agree that the system is broken, new thinking is required on how to ensure that the changes protect customers and not just reduce institutional risk and government exposure. There is no apparent discussion on innovation and compensation for financial institutions so that the massive profits that have been yielded, despite the financial crisis, can be injected back into the system in a more constructive way than through the bonus checks of bank senior executives. We should be seeing sessions that tie the financial system to economic improvement through corporate social responsibility and better initiatives for the disadvantaged, and sessions that motivate global financial brands to do more to support microfinance and give the unbanked more accessibility to finance in the developing world. These are all problems of which there are reasonably simple solutions if there is the will.