After receiving a Doctorate of Law from the Université catholique de Louvain, Davignon joined the Belgian Foreign Ministry, in 1959, and within two years had become an attaché under Paul-Henri Spaak, then Minister of Foreign Affairs. He remained in Belgian government until 1965. In 1970, he chaired the committee of experts which produced the Davignon report on foreign policy for Europe.
Davignon later became the first head of the International Energy Agency, from 1974 to 1977, before becoming a member of the European Commission, of which he was vice-president from 1981 till 1985. From 1989 to 2001, he was chairman of the Belgian bank Société Générale de Belgique, which is now part of the French supplier Suez and was not an arm of the French bank Société Générale, but a Belgian institution. He is now Vice Chairman of Suez subsidiary, Suez-Tractebel.
As chairman of Société Générale de Belgique, he was a member of the European Round Table of Industrialists. He is the current co-chairman of the EU-Japan Business Dialogue Round Table, chairman of the Paul-Henri Spaak Foundation, president of the Royal Institute for International Relations, chairman of [CSR Europe], chairman of the European Academy of Business in Society and current chairman of the annual Bilderberg conference.
He also is a crucial member of the Strategic Advisory Panel of The European Business Awards. He is a member of the Cercle Gaulois and a member of the Advisory Board of the Itinera Institute think-tank. He is also President of the Brussels-based think-tank Friends of Europe.