CBI: Business group giant faces crunch vote to survive

Rain Newton-Smith has taken over as director general of the CBI

The CBI business lobby group is holding a pivotal vote later about its survival following a series of scandals.

The group has been rocked by a number of claims, including serious sexual assault, prompting firms such as John Lewis and ITV to leave.

Members are being asked whether the CBI's proposed reforms give them confidence to continue supporting the organisation.

Some firms are publicly backing the CBI but others say they will not vote.

Siemens and Microsoft - whose UK chief, Clare Barclay, is a member of the CBI board - have signed a letter along with other companies in support of the group.

But BT, which has suspended its membership of the CBI, will not vote on Tuesday. It is understood that Rolls-Royce, which also suspended its membership, will not take part in the ballot either.

The government has suspended its engagement with the lobby group weeks ago.

The CBI's director general, Rain Newton-Smith, told the BBC she would "challenge" the government to engage with the lobby group, if a majority back its reforms.

"What I would say to government is: 'If we can show that we have the support of our members... why won't you speak to us?'" she told Radio 4's Today programme.

The CBI is one of the UK's biggest business groups, representing about 190,000 companies who employ millions of people, but it has been unable to fulfil its role as a lobby group since allegations of sexual misconduct came to light.

What does the CBI actually do?

The UK is home to millions of businesses. They need the government to listen to them when they want help on a range of issues such as employment and taxes so they can grow their companies and, by extension, fuel the UK economy.

Instead of lots and lots of disparate businesses asking the government for things, a group like the CBI finds out what the most pressing issues are for firms and it speaks on their behalf.

The CBI can affect day-to-day life for everyone. In the early days of the Covid pandemic, it helped with the rapid rollout of the government's furlough scheme that kept many people and businesses afloat.

What has happened at the CBI?

In early April, the Guardian newspaper published a number of allegations in which more than a dozen women claimed they had been victims of varying degrees of sexual misconduct by people at the CBI.

This included an allegation of rape at a CBI summer party in 2019.

Following the report, the government "paused" its engagement with the lobby group.

The newspaper published a further rape allegation later that month, involving a woman who worked in one of the CBI's overseas offices who claimed she was assaulted by two colleagues.

The City of London Police is investigating both claims.

Even before these reports, the CBI's director general, Tony Danker, had stepped aside in March following separate complaints about his conduct at work. He was subsequently sacked and is now considering legal action.

He was replaced by Ms Newton-Smith, the CBI's former chief economist.

Fox Williams, a law firm, was asked by the CBI to examine whether the group's management was aware of the claims made in the Guardian and if so, what action was taken.

When the second rape allegation emerged, several big name companies cancelled or suspended their membership of the CBI.

Among those who quit were John Lewis, insurance giant Aviva, and banking group NatWest.

What happens next?

Put simply, Tuesday is make-or-break day for the CBI, which has been operating for nearly six decades.

The lobby group will ask members and trade associations to vote on this key question: "Do the changes we have made − and the commitments we have set out − to reform our governance, culture, and purpose give you the confidence you need to support the CBI?"

The CBI refused to say exactly how many members it has. While many are not commenting ahead of the vote, some such as SSE, the energy company, have broken cover to say the lobby group has their backing to continue.

Meanwhile, accountancy firm KPMG has not renewed its membership of the CBI which lapsed on 1 June.

The result of the vote is expected at around 16:00.

The CBI says it has taken steps to improve its culture as well as the structure of dealing with complaints. It has created the role of chief people officer to sit on its board, whereas before there had been no representation from human resources at that senior level.

It also put in place a confidential whistleblowing channel outside the CBI and asked an external human resources consultancy to examine any further complaints of misconduct while its own internal processes are being reformed.

It is also working with Principia, a group that advises on "building ethical organisations". So far, it has found "the CBI does not have a toxic culture" but there are areas that need improvement.

But the exodus of fee-paying members is already being felt by the CBI.

The group, which employs more than 250 people in the UK and has additional staff overseas, is planning job cuts.

And it has also, according to Sky News, sought legal advice on filing for insolvency should Tuesday's vote not go its way.