KORN/FERRY INTERNATIONAL ANNUAL REPORT 2008 KORN/FERRY at a glance #1 in MARKET SHARE (global and U.S. leader) $790.6 MILLION global fee revenue in fi scal 2008 21% INCREASE in global fee revenue from fi scal 2007 12% INCREASE in earnings per share from fi scal 2007* 89 OFFICES worldwide 2,584 EMPLOYEES 15,000 CLIENT ENGAGEMENTS in fi scal 2008 All fi gures above include Futurestep * Adjusted for one-time charges/gains in fi scal 2007 REVENUE by region Global fee revenue in fiscal 2008 REVENUE by industry Global fee revenue in fiscal 2008 ENGAGEMENTS by function Global assignments in fiscal 2008 4 3 2 1 4 7 6 5 3 1 2 65 4 3 2 1 1. North America 2. EMEA 3. Asia Pacifi c 4. Latin America* 51% 28% 15% 6% * Includes unconsolidated Mexican subsidiaries Industrial 1. 2. Financial Services 3. Consumer 4. Technology 5. Life Sciences 6. Education/Nonprofi t 7. Healthcare Provider Excludes Futurestep 26% 22% 17% 16% 9% 5% 5% 1. C-level/Senior Management/Board 2. Marketing 3. Finance 4. Human Resources 5. Manufacturing/ Research & Development/ Technology Information Systems 6. 61% 14% 8% 8% 7% 2% Excludes Futurestep We help you find great leaders. We also help you keep them. With experience from nearly four decades in executive recruitment, Korn/Ferry understands that attracting top talent to an organization is only the first step to long-term success. That’s why Korn/Ferry has developed a host of solutions that go far beyond executive recruitment and are designed to help clients deploy, develop, retain and reward talent. From succession planning to organizational alignment, performance management to onboarding, Korn/Ferry has the tools to unlock an organization’s full talent potential. Whether it is the identification of new talent or the development of current managers, leading organizations worldwide turn to Korn/Ferry for their talent needs. CHAIRMAN’S LETTER Korn/Ferry is uniquely positioned to assist organizations with the attraction, development and retention of the world’s most precious natural resource — people. Dear Shareholder, Fiscal 2008 proved to be another year of exciting progress for Korn/Ferry International. Not only did we yet again set new records for both revenues ($791 million, up 21% over fiscal 2007) and profits ($1.46 EPS, up 12% over fiscal 2007), but we made significant headway in our transformation as a talent management organization. All three of our business lines (Executive Recruitment, Futurestep and Leadership Development Solutions) are profitable and Futurestep broke through the $100 million mark this year. As the global business community continues to grapple with the challenge of a dearth of qualified talent, Korn/Ferry is uniquely posi- tioned to assist organizations with the attraction, development and retention of the world’s most precious natural resource — people. Over the past 12 months, Gary Burnison and I have completed the transition of separating the roles of Chairman and Chief Executive Officer. This process has been very well received and has gone accord- ing to plan. Our strategy to shift slowly and continue to work closely together has paved the way for a 2 Korn/Ferry 2008 sound and transparent passing of the baton, resulting in clear communication and acceptance by our employees and other various stakeholders. As we move forward, we will adhere to the K/F One Company strategy that we designed more than three years ago. Our goal is to maintain our number one market share in executive recruitment with an ongoing commitment to client excellence and differentiation through the use of unique, science-based tools and resources. We will unlock further scale and growth in our Futurestep and Leadership Development Solutions efforts and in doing so, deepen and strengthen our relation- ships with clients as we evolve as a solutions provider. Finally, we will maintain and develop the best team in the industry and provide our consultants with the resources they need to meet and exceed client expectations. To see the K/F One Company strategy continue to gain acceptance in the marketplace and to witness the steady transformation of Korn/Ferry as a true talent management provider has been an extremely rewarding experience. As we continue to build our business for the long term, I am quite certain that by maintaining our focus, staying close to clients and attracting and developing the best people in the industry, we are on the right path for success. Paul C. Reilly Chairman CHIEF EXECUTIVE’S REVIEW Dear Shareholder, I would like to thank our clients, shareholders and colleagues for making fiscal 2008 a record year for our Firm. Today’s Korn/Ferry is comprised of three growing and profitable businesses. We are the largest provider of retained executive recruitment worldwide; Futurestep, our mid-level and outsourced recruiting concern, has reached a revenue run rate of $125 million; and revenues from our Leadership Development Solutions business are up 60 percent over last year. The progress we are making in our evolution as a talent management organization has been encouraging. In fact, on a fourth quarter run-rate basis, the Firm is generating $855 million in fee revenues (including Mexico) with almost $200 million, or 23%, coming from our Futurestep and Leadership Development Solutions businesses. We remain committed to improving the quality of talent for our clients and transforming the lives of the professionals we serve. Further, we are taking greater market share in the C-suite and at the board level. As a result, our average fees have outpaced the industry. Last year, our average fee rose to $90,000, up 12 percent over fiscal 2007. The true measure of our success is reflected in our clients’ ability to attract, retain and develop world-class talent. In an effort to further institutionalize our go-to-market strategy and differentiate our executive recruiting offering, as well as further integrate our leadership development services into our recruitment business, during the year we launched the Korn/Ferry Advantage. The Korn/Ferry Advan- tage is a framework supported by a set of proprietary tools to help our clients maximize cultural fit. The Korn/Ferry Advantage will enable us to further leverage, differentiate and scale our flagship business and provide consistent standards to train our colleagues around the world. This year also saw the release of a completely new brand identity for Korn/Ferry — The Art & Science of Talent. This campaign provides a fresh and sophisticated approach to our business and embodies both the essence of the art involved in consulting as well as the unique suite of research-based tools used throughout our engagements. The Art & Science of Talent marks a milestone in our transformation — Korn/Ferry has evolved from a great executive recruitment firm into a true diversified talent management provider. 3 Korn/Ferry 2008 CHIEF EXECUTIVE’S REVIEW continued The Art & Science of Talent marks a milestone in our transformation . . . into a true diversified talent management provider. By all measures, fiscal 2008 was a banner year for Korn/Ferry. As we now embark upon fiscal 2009, we approach the year with the same vigor and focus that has driven our success over the past four decades. Being mindful of the operating environment, we do believe that volatility can create opportunity and irrespective of the macroeconomic climate, we will continue to transform the industry. Over these next 12 months, we will continue evolving Korn/Ferry as the top-of-mind brand in human capital, known for unsurpassed quality where the most talented professionals in the industry can enjoy a lifetime of unique career opportunities. innovative and impactful talent solutions that provide our clients with a competitive edge. By leveraging the strength of our brand, the quality of our solutions and the caliber of our colleagues, we will not only transform Korn/Ferry, but most importantly, continue to improve the strength and depth of talent within our clients around the globe. Korn/Ferry — The Art & Science of Talent. Gary D. Burnison Chief Executive Officer We will continue evolving Korn/Ferry as the top-of-mind brand in human capital, known for unsurpassed quality. The true measure of our success is reflected in our clients’ ability to attract, retain and develop world- class talent. As a result, we are relentlessly focused on delivering FINANCIAL HIGHLIGHTS This past year we remained relentlessly focused on advancing our differentiated strategy. As a result, fiscal 2008 produced the most revenue and earnings in Korn/Ferry’s 39-year history. 6 . 0 9 7 $ 4 . 3 5 6 $ 9 . 2 2 5 $ 6 4 . 1 $ 0 3 . 1 $ 9 0 . 1 $ ‘06 ‘07 ‘08 ‘06 ‘07 ‘08 TOTAL FEE REVENUE In millions, fiscal year EARNINGS PER SHARE* In dollars, fiscal year * Adjusted fiscal 2007 results exclude the effect of a $3.3 million after tax charge for an employment contract change offset by a $0.4 million after tax reversal of a previously established lease restructuring reserve. Adjusted fiscal 2006 results exclude the effect of a $4.5 million after tax loss recovery on an investment previously written off that was sold in fiscal 2006 and $6.5 million of one-time tax benefits. These are non-GAAP measures that the Company believes provide useful information regarding the ongoing results of operations because they have been prepared on a basis comparable year-over-year. These measures are not intended to replace EPS measured in accordance with U.S. Generally Accepted Accounting Principles. ART & SCIENCE We combine the art of a time-tested approach and a deep understanding of the intangibles of leadership with the science of research- based, statistically validated tools and resources. This art-and-science collaboration makes us ideally positioned to meet our clients’ talent management needs. 6 Korn/Ferry 2008 Executive Recruitment We have conducted more successful executive searches globally than any other fi rm in history. Korn/Ferry’s 500 global consultants possess extensive backgrounds and specifi c expertise in the broadest range of industries, sectors and functional areas, gained fi rst-hand from more than 125,000 engagements. We also boast a highly specialized team that focuses exclu- sively on placing CEOs and board directors in organizations around the world. Additionally, our unique executive recruitment methodology includes: their emotional profi le is likely to be and what motivates them to succeed • Using a competency-based framework • Comparing candidates’ assessment that provides a clear and common language to help clients identify desired skills and behaviors • Administering our behavioral mapping tool — Search AssessmentSM — to prospective candidates, providing clients with insights into how they will lead, how they will approach and solve complex problems, what results against our statistically validated indicators of success, which are customized to refl ect the specifi c requirements of a client’s organiza- tional culture or position, and illustrate how closely each candidate fi ts the critical parameters of the position Leadership Development Solutions Korn/Ferry’s Leadership Development Solutions can help design and imple- ment an organization’s people strategy with a mix of offerings that are aligned to strategy, scalable and customized to the organization: Align & Measure We align and measure culture, critical behaviors, skills and values with a client’s strategy and organizational requirements to ensure that the measurement of skills and competencies is consistent with the requirements for success. Assess & Select We assess talent in terms of required competencies and skills to identify and select the best talent, whether for merger integration, succession planning or to understand the development opportunities of senior managers and leadership teams. Develop & Coach We enhance the effectiveness of existing or newly hired talent through developmental coach- ing, onboarding, residence-based leadership programs, senior team effectiveness programs and scalable developmental tools. Motivate & Retain We defi ne what drives optimum performance and employee engagement by ensuring that management and executive pay programs and incentives align with shareholder value, company strategy and sound governance practices while effectively motivating participants. Scale & Sustain We coordinate and scale key aspects of the talent manage- ment process through our proprietary web-based technology platform, Executive Center,SM and by certifying our clients on our assessment process and other components of our intellec- tual property. Each of these solutions is delivered by an experienced team of consultants supported by the intellectual property of Lominger and Decision Dynamics, internationally recognized providers of research-based, experience-tested leadership assessment and develop- mental tools. Futurestep Futurestep provides strategic talent acquisition solutions to meet critical workforce needs, including: Strategic Recruitment Process Outsourcing (RPO) Strategic RPO integrates talent acquisition strategy, global recruiting resources, competency- based methodologies, and a fl exible service delivery model to help compa- nies turn talent acquisition into a performance advantage. Project-based Recruitment Project- based recruitment is a proven, outsourced solution for augmenting and optimizing a company’s talent acquisition organization to secure multiple hires on a tight timeline. Mid-level Recruitment With offi ces around the world, a proprietary global candidate database, and expertise across all major industries, we provide the most comprehensive mid-level recruitment service in the market. 7 Korn/Ferry 2008 Interim Professionals We help clients manage gaps and maintain continuity with highly qualifi ed interim professionals from the largest pool of pre-screened candidates in the business. Consulting Services Through The Newman Group, a Futurestep company, we help companies optimize key talent processes; evaluate and select service and technology vendors; establish objectives and metrics for success; and implement and support talent programs and systems. BOARD OF DIRECTORS Back left to right: Ihno Schneevoigt, Patti S. Hart, James E. Barlett, Paul C. Reilly, Gary D. Burnison, Frank V. Cahouet, Ken Whipple Front left to right: Gerhard Schulmeyer, Debra J. Perry, Harry L. You, Edward D. Miller Paul C. Reilly Chairman and President, EMEA (interim) James E. Barlett* (1+ effective Sept. 23, 2008, 3) Vice Chairman, TeleTech Holdings, Inc. Gary D. Burnison Chief Executive Offi cer, Korn/Ferry International Frank V. Cahouet* (1+ until Sept. 23, 2008, 2) Retired Chairman, President and Chief Executive Offi cer, The Bank of New York Mellon Corporation Patti S. Hart* (3+, 4) Former Chairman and Chief Executive Offi cer, Pinnacle Systems, Inc. Edward D. Miller* (2) Former President and Chief Executive Offi cer, AXA Financial, Inc. Debra J. Perry* (1) Managing Member, Perry Consulting LLC Gerhard Schulmeyer* (2,3) Managing Director, Gerhard, LLC Ken Whipple* (1, 2+) Chairman, CMS Energy Corporation Harry L. You* Executive Vice President, Offi ce of the Chairman, EMC Corporation Ihno Schneevoigt* (2) Former Management Board Member and Human Resources Director, Allianz Versicherungs AG and Allianz Lebensversicherung AG (1) Member, Audit Committee (2) Member, Compensation & Personnel Committee (3) Member, Nominating & Corporate Governance Committee (4) Lead Director * Independent Director + Denotes Committee Chair 8 Korn/Ferry 2008 REDEFINING AN INDUSTRY By all relevant revenue measures, we are the largest, most diversifi ed fi rm in our industry. This is a position and a responsibility that we do not take lightly. We will use our success to further our market leadership by continually looking for ways to add value for our clients. In today’s complex world, clients are seeking ongoing methods and systems to attract, deploy, develop, retain and reward their workforces in order to remain competitive. Leading organizations understand that to succeed, they need a comprehensive talent management strategy. Companies will turn to partners they can trust, who are credible and can help their businesses thrive. And who is better qualifi ed to provide this than Korn/Ferry? At Korn/Ferry, innovation is a constant. We are continually redefi ning our role and, in turn, our industry. CORPORATE INFORMATION Stock Listing Korn/Ferry International Class A common shares are traded on the New York Stock Exchange under the symbol KFY. Registrar and Transfer Agent For address changes, account consolidation, registration changes, stock holdings and lost stock certifi cates, please contact: Annual Meeting The annual meeting of shareholders will be held at 10:00 a.m. PDT, September 23, 2008, at: InterContinental Los Angeles 2151 Avenue of the Stars Los Angeles, California 90067 Mellon Investor Services Shareholder Services P.O. Box 3315 South Hackensack, New Jersey 07606 Domestic: +1 877 889 7584 International: +1 201 329 8660 www.melloninvestor.com Investor Contact Gregg Kvochak +1 310 556 8550 Media Contact Stephanie Mitchell +1 650 508 7465 OUR OFFICES WORLDWIDE 1900 Avenue of the Stars, Suite 2600 Los Angeles, California 90067 Tel: +1 310 552 1834 Fax: +1 310 553 6452 www.kornferry.com THE AMERICAS ASIA PACIFIC EUROPE, MIDDLE EAST & AFRICA Amsterdam Athens Barcelona Brussels Bucharest Budapest Copenhagen Dubai Frankfurt Geneva Helsinki Istanbul Johannesburg London Luxembourg Lyon Madrid Milan Moscow Oslo Paris Prague Rome Stavanger Stockholm Vienna Warsaw Zurich Auckland Bangalore Bangkok Beijing Brisbane Guangzhou Hong Kong Jakarta Kuala Lumpur Melbourne Mumbai New Delhi Seoul Shanghai Singapore Sydney Tokyo Wellington Atlanta Bogotá Boston Buenos Aires Calgary Caracas Chicago Dallas Detroit Houston Irvine Lima Los Angeles Mexico City Miami Minneapolis Monterrey Montréal Naples New York Northern Virginia Philadelphia Princeton Quito Rio de Janeiro San Francisco Santiago São Paulo Scottsdale Seattle Silicon Valley Stamford Toronto Vancouver Washington DC