CBI members vote in favour of reform but its future remains unclear

Members of the Confederation of British Industry (CBI) have overwhelmingly voted in favour of approving a package of reforms to the scandal-hit lobbying group today. The vote carried with 93% of those voting in favour in what was widely seen as a confidence vote in the future of the organisation.

While the vote marks an important step in the CBI restarting its work, its relationships with the government and Labour Party remain frozen and a police investigation into the allegations of sexual misconduct at CBI events is ongoing.

With the British Chamber of Commerce (BCC) launching its own national business group, the CBI faces a future of being a quieter voice in a more crowded room.

The scandal at the CBI

In March, the Guardian reported on several allegations of misconduct including allegations of rape and sexual assault made by current and former members of staff. Separate allegations resulted in the dismissal of the former CBI director general, Tony Danker.

The CBI appointed a new director general, Rain Newton-Smith, and launched independent reviews of its organisation and culture. In its prospectus, the CBI claims to have already implemented the bulk of the recommendations made by one of the external advisors, the law firm Fox Williams.

What were members voting on?

The package of reforms was summarised in a prospectus, A Renewed CBI. The changes included:

• Changes to membership of the CBI’s Board and an increase in the frequency of its meetings. The Board membership will also be subject to annual elections.
• An enhanced committee structure, including a new People and Culture Committee. This will be supplemented by the creation of a new external Culture Advisory Committee that will ‘steer and challenge cultural renewal’.
• The installation of a new director general next year.

The prospectus sought not only to address failings in the CBI’s processes and culture, but also to justify its ongoing relevance. In publishing the prospectus, the organisation stated that “70% of respondents in our Purpose and Culture survey cited the CBI’s ability to "speak for all business, across the whole economy on the issues of national importance" as "absolutely critical".”[1]

While the prospectus is bullish about the CBI’s future, media reports had suggested that the vote was one on whether the organisation should continue to function. Sky News reported that the CBI had taken legal advice on possible insolvency in the event of members rejecting the package.

Businesses are looking beyond the CBI

The CBI still finds itself locked out of Whitehall and the potential next government ahead of a likely general election next year. The ongoing scandal has seen the BCC launch its own lobbying group with members including Heathrow Airport, BP and Drax. The BCC has said that it’s not looking to replace the CBI and wants to continue working with the organisation going forward.

While today’s vote was a milestone in its internal reform process, a return to full activity still appears to be some time away and will be influenced by the outcome of the police investigation.

The CBI has already indicated that it is likely to trim the size of its organisation and redundancies are expected. The slimmed down organisation will need to work alongside the new Business Council and focus its resources on a smaller number of campaigns if it is to maintain restore its reputation.

The likely outcome is that a greater plurality of business groups and associations will lobby the government outside of the CBI’s confines. Several big-name members including John Lewis Partnership, NatWest Group and Virgin Media have all exited and remain outside of the organisation. 

The emergence of The Business Council and the outcome of today’s vote are likely to be viewed positively in Downing Street, a credible and trusted voices for business is much needed as the Prime Minister seeks to restore his own Party’s credibility. The CBI’s return to the top of the table however remains some time away.

[1] https://www.cbi.org.uk/articles/building-on-our-strengths/ (31 May 2023)