CBI suspends all key activity after membership exodus during day of chaos
Corporate names from across business and industry quit or suspended collaboration with the employers’ group after a fresh allegation of sexual misconduct.
James Sillars
Business reporter @SkyNewsBiz
Friday 21 April 2023 21:01, UK
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A Confederation of British Industry logo at its annual conference in London, Britain November 9, 2015. REUTERS/Toby Melville/File Photo
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The CBI is suspending all policy and membership activity until an Extraordinary General Meeting in June
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The CBI has suspended all activity until June after major companies terminated their membership or suspended collaboration due to the scandal engulfing the business lobby group.
The rush for the exit door came after the Guardian newspaper reported that a second woman had made a rape allegation – against two male CBI co-workers – building on the series of historic serious misconduct claims to have engulfed the body in recent weeks.
Meta, John Lewis, NatWest, BT, BMW, ITV and Unilever were among the big names to take action.
Which businesses have quit or suspended membership of the CBI?
After a day of chaos, the CBI announced late on Friday that it would suspend all policy and membership activity until an extraordinary general meeting in June when they would put forward proposals to restructure the organisation.
“The CBI shares the shock and revulsion at the events that have taken place in our organisation, and at past failures that allowed these events to happen,” the group said in a statement.
“We are deeply sorry and express our profound regret to the women who have endured these horrific experiences,” they added.
Membership exodus
It came at the end of a bruising day which saw dozens of firms from across all sectors of business and industry pull their support from the group.
Banking giant NatWest Group said: “Following careful consideration, and having previously paused all activity, NatWest Group has today withdrawn its membership of the CBI with immediate effect.”
A spokesperson for Facebook owner Meta also confirmed that they had paused engagement with the CBI while the investigation is ongoing.
BT Group said: “In light of the appalling allegations made, BT Group has decided to suspend its membership of the CBI with immediate effect.”
CBI STATEMENT IN FULL
The CBI shares the shock and revulsion at the events that have taken place in our organisation, and at past failures that allowed these events to happen. We are deeply sorry and express our profound regret to the women who have endured these horrific experiences.
We have listened carefully to what our colleagues, members and stakeholders have said over recent days and weeks. We have heard loud and clear a demand for far reaching change.
We want to properly understand from our colleagues, members, experts and stakeholders how they envisage our future role and purpose. As a result, we have taken the difficult but necessary decision to suspend all policy and membership activity until an Extraordinary General Meeting (EGM) in June.
At the EGM we will put forward proposals for a refocused CBI to our membership for them to decide on the future role and purpose of the organisation. This work and the cultural reform will be the entire and urgent focus of the organisation over the coming weeks.
Our members have told us in recent days and weeks that they believe in the importance of a collective voice to inform national policy and the unique role that an organisation like the CBI can play in public life. But much needs to change if we are to win back their trust so we may continue to represent business at this critical time for the country.
We are taking steps to address our failings but recognise these are not yet sufficient to sustain the confidence of our colleagues, members and of the broader business community. We know it will take time to rebuild trust in our purpose and culture. And to give our team and former colleagues the space to heal.
Carmaker BMW joined the exodus late on Friday, saying they were “concerned by the allegations relating to the CBI. The Group has therefore decided to terminate its membership with immediate effect”.
They were joined by Rolls-Royce, who said: “In light of the recent allegations, which are deeply concerning, we are suspending all interaction with the CBI with immediate effect.”
A spokesperson for ITV told Sky News that the broadcaster “will pause engagement with the CBI with immediate effect and will not renew our contract with them”.
Unilever also confirmed that they were severing ties, saying: “Due to the very serious and ongoing allegations, we can confirm that we have suspended our membership of the CBI.”
The John Lewis Partnership had earlier cited “further very serious and ongoing allegations” as the reason for quitting the organisation.
IT’S NOT EXAGGERATING TO CALL THIS AN EXISTENTIAL CRISIS FOR THE CBI
Sky News Author Ian King Business Presenter
Ian King
Business presenter
@iankingsky
If one were to compile a list of some of the most prestigious blue-chip UK employers, it would probably include NatWest, BP, Shell, Aviva, the John Lewis Partnership, Virgin Media O2, WPP, Phoenix Group, BT, PwC, EY, Schroders and AstraZeneca.
Were that list to be enhanced with prestigious foreign-owned businesses that are major employers in the UK, and which enjoy a meaningful UK presence, it would probably extend to take in names such as BMW, Mastercard, Ford, Fidelity, Jaguar Land Rover and JP Morgan.
That underlines the crisis now engulfing the CBI. All of those companies have either paused their engagement with the employers organisation or cancelled their membership altogether in the wake of the latest allegations consuming the CBI.
It was bad enough that the CBI felt obliged to dismiss its former director-general, Tony Danker, amid allegations of workplace misconduct.
What made it worse was a report in The Guardian, the newspaper that first published details of the allegations against Mr Danker, that a former CBI employee had filed a complaint that she was raped at a party hosted by the organisation back in 2019.
That has now been made worse still by a second woman coming forward to say she had been raped by colleagues while working for the CBI.
It is not now over-exaggerating to say that this has become an existential crisis for the CBI.
Read the full analysis here
Insurers start the flight
Insurer Aviva was first to reveal its hand on Friday, just moments after Sky News reported that abrdn, the FTSE 100 fund manager, was also considering its position with the organisation.
Fellow insurers Phoenix Group and Zurich swelled the exodus alongside the industry body the ABI while Virgin Media O2 also confirmed it had terminated its membership.
Asda, accountancy giant PwC and National Grid later confirmed they had suspended all activity with the business lobby group while Lloyds Banking Group was also understood to have done the same.
An AstraZeneca spokesperson said: “Following these grave allegations, we have decided to pause our engagements with the CBI while these are investigated.”
“In light of the very serious allegations made, and the CBI’s handling of the process and response, we believe the CBI is no longer able to fulfil its core function – to be a representative voice of business in the UK,” Aviva said.
“We have therefore regrettably terminated our membership with immediate effect.”
CBI president Brian McBride had previously admitted that a “handful” of its 190,000 members had departed since the crisis began.
Brian McBride
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Brian McBride was elected president of the CBI in June last year
They are known to have included, before Friday, the British Insurance Brokers’ Association.
Shell is understood to have suspended dealings with the CBI last week.
The potential departure of abrdn would be acutely embarrassing for Mr McBride personally as he currently serves as a non-executive director at the firm.
Sky’s City editor Mark Kleinman reported that the board had been debating whether to terminate its status as a CBI member once a CBI-commissioned review of sexual abuse allegations against staff members had been completed.
A source said that alternatively it could decide not to renew its membership when it expires at the end of this year.
A string of blue-chip companies, including Rolls-Royce and Marks & Spencer, have raised public concerns about the crisis.
Last week, the CBI sacked Tony Danker, its director general, after saying it had lost confidence in his ability to lead the organisation amid claims about his personal conduct.
Tony Danker, director-general of the Confederation of British Industry (CBI), speaks during the CBI conference in Birmingham, Britain November 21, 2022. REUTERS/Phil Noble
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Play Video – CBI boss Tony Danker sacked
Tony Danker was sacked on 11 April
Mr Danker told the BBC this week he had been “thrown under the bus” and said the allegations against him did not merit his dismissal.
He also apologised for making a number of CBI employees “uncomfortable”.
Business leaders have lined up in recent weeks to denounce its handling of the crisis, saying it had been too slow to apologise and had erred by appointing an insider, Rain Newton-Smith, as Mr Danker’s successor.
Three employees have been suspended, while a police investigation is under way.
The CBI said this week that the second phase of an inquiry by the law firm Fox Williams would conclude imminently.
“The board will be communicating its response to this and other steps we are taking to bring about the wider change that is needed early next week,” the group said on Thursday.
