In 2008, WEF commissioned a survey of 130,000 respondents on values and ethics. One of the conclusions of the study was that, “in the wake of the economic crisis, this survey revealed a perceived deficit of values in the economy and a need to fundamentally rethink the development of the morals and ethical norms that underpin our global economic systems.” 1 The WEF’s Youth Global Leaders task force expressed a similar view: “The global financial crisis of 2008 and the ensuing economic recession has called into question the character and trustworthiness of business managers around the world.” 2 The joint US-EU intelligence report echoed a parallel message, “Today the legitimacy and credibility of the US and the EU as political leaders is openly questioned by other rising power centers and large swathes of the international community.” 3
For the WEF, these observations are danger signs that need priority attention. Placing legitimacy as one of two criteria for the GRI project may well be one way that WEF can try to make sure the exposure and the challenge to legitimacy of the 2007/2008 crisis is not widened further in the next financial crisis.
WEF is concerned that such widespread public skepticism can lead to widespread doubt about the underlying principles of the global system. They recognize that when corporate leaders are seen as lacking morals, it does not take much for the institutions of globalization to be seen as immoral. In this situation, it would become harder and harder for the G20, for the IMF, or for individual corporate spokespersons to command respect and effective leadership on global matters of concern to the Davos community. They know that it would be increasingly problematic if important messages from the world's elite leaders were ignored by large communities of people around the world.
The loss of legitimacy, like the loss of trust in a bank, is very difficult to recover. When people lose trust in a bank, they are likely to want to pull their money out which can have a cascading effect on related banks. Were such a process to happen with the global finance sector, WEF realizes that it too could easily produce a very serious systemic shock to globalization itself.
Consequently, the GRI project focused its attention on ways to recover from the loss of legitimacy in the redesign of the institutions of global governance.
The Readers' Guide welcomes comments with alternative examples or counter examples and commentary – critical or otherwise – of the above interpretation of GRI’s perspective.