CBI wins vote of confidence after claims of misconduct

The CBI business lobby group on Tuesday won a crunch vote of confidence following allegations of wrongdoing, but it failed to secure a firm pledge from ministers to immediately re-engage with the organisation.

The CBI, which has been frozen out by the government following allegations of sexual and other serious misconduct at the group, said the vote had passed by a margin of 93 per cent to 7 per cent.

But the CBI refused to disclose what proportion of its member companies and trade bodies had backed the organisation in the confidence vote at an extraordinary general meeting in the City of London.

CBI members had been asked to vote on whether the group’s proposed overhaul of its leadership, governance and culture gave them confidence in the organisation.

The vote followed 12 weeks of crisis at the CBI after claims of misconduct at the organisation were published in The Guardian, including two rape allegations that are now under police investigation.

Leaders at the CBI are hoping that the vote will pave the way for ministers to restart relations with the organisation and for members that have suspended their ties or quit to resume their involvement with the group.

Rain Newton-Smith, CBI director-general, said she was grateful for members’ support. “We’ve made real progress in implementing the top-to-bottom programme of change promised by the [CBI] board and, while there remains work to do, today’s result represents an important milestone on that journey,” she added.

The CBI said there were 371 votes cast in total, with 23 recording abstentions on their ballot.

However, it did not disclose how many members had been eligible to participate in the ballot in total, leaving the level of turnout unclear. Companies that quit following the recent allegations, such as Aviva and John Lewis, were not eligible to vote.

The CBI’s website refers to regular meetings with 700 members but it said on Monday that this number “doesn’t represent our total membership”.

This suggests that fewer than half of the organisation’s members supported it in the confidence vote, or that the total has fallen sharply during the crisis.

“That 371 organisations have voted to support the CBI is clearly a positive outcome,” said Leo Martin, managing director at business ethics consultancy GoodCorporation.

“However, given the organisation claims to have over 700 members, there is still a long way to go to get all members on board with the reforms proposed. This is obviously crucial in order to build momentum and get the CBI back on its feet.”

An executive at one company that has left the CBI was more critical, saying the group “have got a nerve” to claim that the result constituted a vote of confidence.

The future of the CBI now rests largely on whether the vote is enough to convince ministers to re-engage, so that the group can seek to influence government policy. 

Rishi Sunak, speaking ahead of a visit to Washington, declined to say whether the government would re-engage with the CBI following Tuesday’s vote.

“Matters at the CBI are for the CBI and for its members to work through,” he said. “I saw the vote so I haven’t seen any further details. Beyond that, I’m sure they will work through that with their members and what it means for all parties.

“We continue to engage with businesses, individually and business groups. We will continue to do that. The issue of the CBI is for them to work through.”

Government officials do not expect to restart communication with the CBI immediately. “That’s something they will be thinking about inside [the Department for Business and Trade] over the next few days,” said one official.

The CBI will also need to persuade companies and trade bodies to renew their memberships as they fall due, with many businesses’ current subscriptions set to expire at the start of 2024. 

The group’s finances have already been hit hard by members quitting, and staff are braced for redundancies as the CBI aims to slash its wage bill by one-third. 

FTSE 100 groups Shell and SSE, which had paused their memberships following the misconduct allegations, said they had backed the CBI in the confidence vote.

Shell said it would “review progress” before deciding whether to renew its membership later in the year.

Imperial Brands said it had abstained in the confidence vote but was “encouraged” by the CBI’s proposed changes and that the group must now convince members by delivering on its promises. 

Anglo American, Rolls-Royce, BT, Flutter and PwC also abstained, said people with knowledge of the matter. 

However, more major CBI members have quit the CBI in recent weeks. BP and Tesco, which had previously suspended their memberships, have now departed.

In a joint statement, a group of trade bodies including the British Retail Consortium and National Farmers Union welcomed “the CBI’s recognition that it must change” and that they were “prepared to support” the changes proposed by the lobby group.

David Wells, chief executive of trade body Logistics UK, said that while there was clearly an important role for an organisation to represent all business at a national level, it remained to be seen “whether or not that is CBI”.

Logistics UK and the Recruitment & Employment Confederation both backed the CBI in the confidence vote but their memberships remain suspended. 

The threats to the CBI include a new business council formed this week by the British Chambers of Commerce for companies seeking “a different kind of representation”. BP and Heathrow were among the council’s four founding members. 

Additional reporting by Oliver Barnes, Anna Gross, Leslie Hook, Hannah Kuchler, Laura Onita, Rachel Millard, Sylvia Pfeifer, Madeleine Speed, Daniel Thomas and Tom Wilson