CBI secures hope as members approve conduct scandal reform package

The scandal-hit CBI has secured support in its battle for survival by winning a crunch membership vote on plans aimed at restoring trust in the business lobby group.

The UK’s largest employers’ organisation needed a simple majority to win the vote at an extraordinary general meeting in London and won 93% in favour of its plans.

The CBI had appealed for a mandate to secure its survival after a stampede for the exit among high profile corporate members in April when a newspaper published an allegation of rape by a second female member of staff.

It built on a series of misconduct claims already levelled at the CBI, which has remained sidelined as the self-styled voice of business by government and opposition parties since the crisis first surfaced.

The organisation has admitted a string of failings in its culture, governance and handling of complaints, especially over sexual harassment.

A number of staff were dismissed as it moved to restore trust in its operations through a shake-up of its HR and leadership functions.

Defeat in the membership vote could have proved fatal though a number of jobs are still expected to be lost imminently.

Sky News revealed a week ago that the CBI’s board had taken advice on a potential insolvency filing in the event the ballot was lost.

Director general Rain Newton-Smith said: ”After an incredibly tough period, I’m deeply grateful for the faith shown in us by our members.

“We’ve made real progress in implementing the top-to-bottom programme of change promised by the board and, while there remains work to do, today’s result represents an important milestone on that journey. 

“Even an organisation as established as the CBI is only as strong as its members. That support is something we have never taken for granted. We will work tirelessly to repay the faith shown in us and are committed to living the values and changes we have proposed.

“Let me be clear, we have listened, we have acted, and we will leave no stone unturned to be the best voice for business inside and out. 

“We also heard another important message from members. That they want us to bring our breadth and depth of expertise, as well as our unique convening power, to bear on the economic challenges of the day.”

She had argued in advance of the vote that UK firms needed a strong voice and only the CBI had the breadth of expertise to make that heard at the heart of government.

While politicians are continuing to give the CBI the cold shoulder, its survival remains threatened.

A potentially lengthy investigation is being carried out by City of London police and a wealth of major members have refused to reengage with the group.

Aviva, the John Lewis Partnership, Kingfisher and NatWest Group are among the names to have severed all ties.

Others including AstraZeneca, BP, Marks & Spencer, Rolls-Royce Holdings and PricewaterhouseCoopers, which suspended their memberships, were allowed to cast a ballot.

Danni Hewson, AJ Bell’s head of financial analysis, said of the state of play: “This was a must win vote for the CBI but make no mistake, the business lobby group faces a long and tortuous slog back from the brink.

“It’s haemorrhaged fee-paying members forcing it to slash its wage bill and has lost ground to rival bodies like the British Chambers of Commerce.

“There’s also the question of exactly how many of the members and ex-members who were allowed to vote actually did so, with some companies still sitting on the fence, waiting to see if all the good words can be turned into good actions.”

She added: “The question many businesses will still be asking is whether this tainted brand can still carry the same weight when it walks into a room.

“It’s got a new face at the top, but Rain Newton-Smith was also part of the old guard and there will be some who would have preferred a new broom to clean the muck out of the organisation.”