CBI must win over politicians and big hitters if it is to survive

Having emerged from a make-or-break confidence vote with a thumping mandate, the CBI’s new director general Rain Newton-Smith wants to put the organisation back on the front foot.

Claims of misconduct, general toxicity, sexual harassment and two allegations of rape left the lobby group, used to looking ministers in the eye, staring into the abyss.

Had this vote been lost it is hard to see how the CBI would have survived.

Having secured a 93% vote in favour of reform, Ms Newton-Smith sees no reason why doors should not once more open in Whitehall.

“I think a majority of 93% is one that any politician would respect, and what we’ve shown today is that we’ve got the support of our members, we’re their voice across regions and nations and sectors,” she said.

“Now we want to sit down with policy makers, look at the economic evidence, look at the insights we’re getting from businesses and talk to them about the critical challenges our economy faces.”

If that sounds bullish for an organisation that was consulting lawyers about winding up procedures a week ago, the mandate from members is undeniable, though it comes with caveats.

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The leadership won 93% of the 371 votes cast but, by definition, that did not include the scores of member companies who voted with their feet and walked away when the allegations first surfaced.

NatWest, BT, John Lewis, BP, Shell and Tesco all walked away and while the vote of confidence was one-member-one-vote, some carry more weight than others.

The CBI’s clout in Whitehall derived from the fact it represented the biggest hitters, a legacy of the 1970s and 1980s when it was the “boss class” counterweight to the power of the unions.

The revelation that some of its own working culture might also date from the 1970s has undermined that strength, and the CBI will surely hope to tempt back some of the biggest employers.

The departure of so many big hitters has left the organisation with a cash crisis as well as a credibility challenge.

Membership dues, scaled to a company’s size, are the CBI’s largest single source of income, which means Ms Newton-Smith’s first job will be to oversee a redundancy program to match the revenue that remains.

She will also face competition for the ear of ministers. The CBI’s travails have seen other business lobby groups seek to fill the void, with the British Chambers of Commerce making an unashamed pitch this week, establishing a business council including former CBI members.

Infighting among business lobbyists is not box office stuff but it does matter to companies and in Whitehall, particularly in an economic slowdown with an election looming.

Ministers ideally need to know that what they have planned will work and companies need a conduit for their concerns, a role the CBI filled with conspicuous success during the pandemic.

Readmittance to the sphere of influence is in the gift of the Prime Minister, and Newton-Smith will hope Rishi Sunak remembers collaboration during the pandemic, when her predecessor stood alongside the then chancellor and her counterpart at the TUC to announce the furlough scheme, rather than the CBI’s long-standing opposition to Brexit.

It could also face challenges from the former director-general Tony Danker, who is considering his legal position having been dismissed for misconduct claims he says he was cleared of by an earlier investigation.

The exact nature of that complaint, like so much in this scandal, remains unclear. The CBI’s crisis is curious for having threatened its existence, and raised significant questions about workplace culture on the basis of very little established fact.

The Guardian stands by its reporting of the allegations that triggered the mayhem, but the claims remain anonymous and untested, with a police investigation ongoing amid reports neither rape complainant has come forward.

That is not unusual given the pitiful conviction rates for sexual crimes, and establishing culture and processes in which victims feel can come forward in confidence is fundamental to safe working environments.

The CBI aspires to again lead British business. For now it remains an example of the damage that can be done to staff, reputations and brand when things go wrong.

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