Critics underwhelmed by CBI’s ‘programme of change’

The flight of high-profile companies from the CBI in April over allegations of serious misconduct left the UK business lobby group at risk of extinction.

After a shutdown of almost all activity since last month, CBI leaders were not naive enough to expect the unveiling of a “programme of change” on Wednesday would trigger a stampede of businesses seeking to return.

But if they had hoped the publication of their “prospectus” would spark a public show of solidarity from businesses or a hint that doors in Whitehall may soon reopen, they are likely to have been disappointed.

The prospectus set out plans to overhaul the CBI’s leadership, fix its culture and governance and pare back its lobbying activities after more than 65 businesses, including many FTSE 100 companies, suspended or cancelled their membership over allegations including sexual harassment, bullying and drug-taking.

The Guardian newspaper reported two allegations of rape, which prompted police investigations.

One Whitehall official said the government stance of not engaging with the CBI remained unchanged. But without any softening of position among ministers, businesses that have suspended or cancelled their associations with the body have little reason to return to the fold and pay membership fees.

The CBI must regain access to government, “otherwise they don’t serve a purpose”, said a person at a large company that quit the lobby group last month. This was particularly the case for small and medium-sized enterprises that are not big enough to have direct relationships with ministers, the person added.

At an extraordinary general meeting on Tuesday, members will be asked to vote on whether the changes and commitments published on Wednesday give them confidence to support the CBI.

Director-general Rain Newton-Smith sought to place the organisation on the front foot, saying it was “well on the road to recovery” through its plans to adopt recommendations from reviews by ethics consultancy Principia Advisory and law firm Fox Williams.

Principia found that blanket terms such as “toxic” or “misogynistic” were not an “accurate or useful” description of CBI culture.

But it found that “attitudes towards culture are inconsistent, with a lack of awareness of different experiences and limited self-reflection”. This had led to “unclear expectations for behaviours and ways of holding people to account”.

CBI president Brian McBride told members the body was “chastened by the events of the past 12 weeks”.

But an executive at one former member said there was nothing in the plan to prompt it to change its position. “They’re acting like the CBI has a divine right to exist,” the person said. “The CBI hasn’t functioned for months and no one has noticed any difference. That’s the danger for them. People don’t miss the CBI.”

A person at another large business that has suspended its membership said the company would monitor progress but was unlikely to resume membership unless significant change was proposed, such as joining forces with another lobby group. A Labour party aide said it would wait until after the EGM to react fully.

Newton-Smith took over as director-general last month after the sacking of previous boss Tony Danker, who has said he was thrown “under the bus” for the wider problems at the CBI. She said the group was showing “accountability”.

But it declined to say how many people had been fired following the allegations. It has also not given details of its financial position.

The CBI told members this month that “several” people had been dismissed for failing to meet its “high standards of conduct”, according to a member update seen by the Financial Times.

A former CBI employee said: “It is still not clear what actually went on. So far we have only seen the reports in The Guardian. What did they get to the bottom of? Does anyone know?”

Questions have also been raised about the CBI’s proposed governance overhaul.

The board will be refreshed, with four non-executive directors — Anna Marks, Deloitte’s new global chair; former McKinsey partner Dame Vivian Hunt; former CBI president Lord Karan Bilimoria; and Microsoft UK chief executive Clare Barclay — all earmarked to leave.

The newest non-executives, Jill Ader and Mark Logan, will stay on “for continuity”. An interim chief people officer will report to a new “people and culture” board subcommittee, while an expert culture advisory committee will also be formed.

While the immediate changes will be overseen by McBride, the organisation will immediately start to recruit his successor.

Leo Martin, managing director at business ethics consultancy GoodCorporation, said the prospectus was “sensible” but warned: “No matter what change you propose, because they haven’t been transparent about what has happened it might all be too late.”

He also questioned whether there should be changes to the senior managers reporting to Newton-Smith, in addition to the planned board overhaul and improved mechanisms for speaking up.

“Staff need humans who people can turn to that are trusted by employees and can guarantee non-retaliation and support for those affected. A new bit of software isn’t going to do it.”

The CBI signalled that its external mission, to provide a unified voice for businesses of all sizes in all sectors, would not change significantly, despite its acceptance that it will “need to be smaller and refocused” after the loss of fees from members who have quit.

It plans to concentrate more on issues affecting SMEs and businesses in the UK’s nations and regions. The CBI also said it would reduce duplication of work done by trade associations and would prioritise “whole economy” issues.

A person with knowledge of the CBI’s plans said the group hoped some businesses would come out in support in the coming days. Another added it wanted to emerge from the EGM with a “clear majority” of members supporting its “programme of change” as a way of showing government that the body was the “legitimate voice of business”.

Even if it succeeds in regaining access to ministers, the CBI has admitted that its “size, structure and form” would depend on the level of support it receives at next week’s EGM. Employees would also be consulted on any restructuring, it said, a process that is generally required for significant redundancy programmes.