The CBI’s website is groaning with “thought leadership” articles about corporate culture, inclusion and transparency. Would you like to create a “culture of belonging” at your business, perhaps? Or “improve workforce wellbeing”? Maybe go “further, faster” on the “moral question” of diversity and inclusion?
Well, the CBI has your back. Which is more than its staff have been able to say in recent years.
The business lobby group’s board announcement on Tuesday amounted to an unmitigated failure to live up to its own words and principles. It sacked Tony Danker as director-general, announced three further suspensions related to a separate investigation into allegations of sexual assault, rape and harassment, launched an overhaul of its culture and processes, and encouraged people to come forward with other concerns given its serious “organisational failure”.
This is an existential challenge for the UK’s pre-eminent business group. Its easy access to senior government figures, so envied by other lobbyists, has dried up. Its membership, whose fees accounted for nearly 90 per cent of its £25mn income in 2021, is jittery. Its commercial income from events and leadership programmes will evaporate for the time being.
And this feels like the beginning, not the end, of its reckoning. Danker’s dismissal — before, he says, he was allowed to give his account of misconduct allegations, including sexual harassment, made against him — will not draw a line under it. The most damaging allegations, such as the rape reported to have taken place at a boat party in 2019, predate his time there.
There had been talk of a change to the CBI’s blokey, boozy culture under Danker’s predecessor Carolyn Fairbairn. But while the latest allegations are mostly new to its upper echelons, the group did know that there was a serious problem at that party: one individual was fired at the time following harassment allegations, according to people familiar with the matter. It does not sound like that incident was investigated more broadly — or at least others did not feel able to come forward with complaints.
New boss Rain Newton-Smith, who only left as chief economist to join Barclays this year, is well liked and widely respected. But she will need to convince the CBI’s 300 staff and its members that she can lead the type of detoxification required, given that she was on the executive committee in her previous role, which she held for nine years.
She will need to do so while battling questions over why the CBI exists at all. The group has annoyed virtually everyone of late, struggling to hold together its coalition of disparate business interests, infuriating the government over Brexit and then toadying up to whichever Brexiter was in Downing Street in an attempt to make amends. It claims to speak for 190,000 businesses — a figure that annoys the sector associations whose members count towards it and fails to dispatch suspicions that big, listed businesses call the shots.
The group’s cultural reckoning should be followed by a strategic one. It remains unjustifiably coy about how many direct members it has and how it assimilates its disparate stakeholders’ views. It allowed itself to be overused as a flak jacket in the Brexit process by big businesses too timid to voice their own concerns. Achieving the perfect balance as a critical friend to the government is tricky but the recent public extremes of hostile antagonist and compliant sycophant have not served the organisation well.
Industries keen to dismiss the CBI as unnecessary tend to be those enjoying the warmth of government favour themselves. But the group’s influence should not come through sidelining of specialist member bodies, especially where a government happy just to tick the box on business engagement might prefer a clubby, familiar approach. The so-called Big Five that leads conversations — the CBI, British Chambers of Commerce, Federation of Small Businesses, Institute of Directors, and Make UK — looks narrow and outdated.
Ultimately, however, the group, or something like it, is needed. Sector bodies such as UK Hospitality and Make UK shone during the pandemic, battling effectively on behalf of troubled companies. But getting focus on bigger-picture policy issues would be impossible with dozens of sector-obsessed representatives around a table. And the CBI has had its share of genuine successes of late, like the push for full expensing of capital expenditure or its hand in the furlough scheme.
There will be, if anything, more need for decent business input on cross-economy questions — not least under a possible future government that is keener on industrial strategy, more interventionist on decarbonisation and more radical in its thinking on labour, skills or infrastructure.
The organisation that offers others “practical guidance to . . . empower your business through periods of change” has its work cut out to show it is up to that task.