CBI faces crucial vote on reform package amid misconduct scandal

Rain Newton-Smith, director general of the Confederation of British Industry (CBI), is urging members to approve a series of reforms in a critical vote that could determine the future of the embattled business lobby group. The CBI, a 59-year-old organization that has traditionally represented big business, is facing a potentially existential referendum at an extraordinary general meeting in London. Members will be asked to vote in favour of changes to the group’s structure, governance, and culture, which were prompted by media reports of misconduct, including allegations of rape and a toxic environment.

The crisis led to the dismissal of Tony Danker, Newton-Smith’s predecessor, and sparked an ongoing investigation by the City of London Police. The government and opposition suspended engagement with the CBI, while several leading companies withdrew their membership. At the extraordinary general meeting, Newton-Smith will ask members to support the proposed changes, stating, “I’m confident and determined this will be a turning point for us. The start of a new chapter, for a renewed CBI.”

Members will vote on whether the changes and commitments made to reform the organization’s governance, culture, and purpose give them enough confidence to continue supporting the CBI. A simple majority is required for the motion to pass, with the result expected to be announced after 4pm.

If the motion is successful, Newton-Smith will have the mandate to implement changes to the board and establish a people and culture sub-committee. This would enable the CBI to begin restoring its credibility among former members and rebuilding relationships in Westminster. However, if the motion fails, the future of the CBI will be uncertain.

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Income has already been affected by a decline in membership payments, and a redundancy program was announced to staff last week. The directors have sought advice on winding up procedures if the organization is no longer viable. Sources involved in discussions with the CBI over the past month indicate that the vote’s outcome is difficult to predict, despite widespread agreement that the business sector needs a strong, multi-sector representative voice.

In response to the CBI’s crisis, other business groups have attempted to fill the void and gain influence. The British Chambers of Commerce announced a new Business Council on the eve of the vote, which the CBI dismissed as “opportunist.” Supporters of the CBI’s reform program argue that the organization possesses economy-wide expertise and experience unmatched by other groups, making it worth preserving if concerns about its culture can be addressed.

However, major companies that withdrew their membership earlier this year are not rushing to rejoin. Some firms are “keeping an open mind” but feel well-served by their industry-specific trade bodies, while others have the advantage of dealing directly with the government and ministers due to their size. Aviva and NatWest, whose resignations sparked a wave of departures, are not planning to change their positions.

Firms that suspended their engagement following the most serious allegations are reviewing the proposed changes and awaiting the vote’s outcome. PwC is expected to abstain from voting despite remaining a member. Some companies may be waiting to see if the reforms are sufficient to persuade the government to resume engagement, a decision that is likely to be made by Downing Street. This gives the Prime Minister significant leverage over an organization that has been a source of tension for successive administrations since it opposed Brexit.

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Jamie Cartwright

Jamie is a keen traveler, writer, and (English) teacher. A few years after finishing school in the East Mids, UK, he went traveling around South America and Asia. Several teaching and writing jobs, he found himself at The Thaiger where he mostly covers international news and events.

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