Fewer than one-third of CBI members backed overhaul

Fewer than one-third of the CBI’s remaining members voted to back the business lobby group’s plan to overhaul its governance and culture after a misconduct scandal, according to figures disclosed to MPs on Tuesday. 

Defending the role of the CBI, director-general Rain Newton-Smith told the House of Commons business and trade committee that the group now had about 1,200 members following a crisis caused by claims of serious misconduct, including rape, at the organisation.

The figure means that less than 30 per cent of members cast a ballot in a vote of confidence held last week. 

The CBI, which paused most of its activities in April until last week’s vote of confidence on its “programme of change”, won by a margin of 93 per cent to 7 per cent based on a turnout of 371 members. 

The group’s viability has been cast into doubt by an exodus of members and the government’s decision to pause engagement with it.

However, Newton-Smith on Tuesday told MPs that the CBI remained a representative voice for businesses of all sizes across the UK economy.

“We are very confident that we can recover from the crisis that our organisation has gone through,” she said, outlining changes the CBI was making to its governance and culture.

Until Tuesday, the CBI had refused to disclose its total membership, referring only to the 190,000 businesses it claimed to represent.

Most of those businesses were not CBI members but were included in the total figure because they belonged to trade associations that were themselves direct members of the group. 

Newton-Smith said the “vast majority” of direct members, which now includes “over 120” trade associations, had not left in recent weeks. But she came under pressure from MPs for refusing to disclose how many companies and trade associations had resigned their membership. 

Insurer Aviva, NatWest bank and supermarket Tesco — all FTSE 100 companies — were among those to quit the CBI in recent weeks, joined by the likes of accounting firms Deloitte and KPMG and retailer John Lewis.

The departures dented the lobby group’s finances, forcing it to plan redundancies, while dozens more companies, such as J Sainsbury, publicly paused their ties with the group. 

Asked how politicians could rely on CBI data on food prices “if the largest supermarkets have stepped back from even using you as a representative body”, Newton-Smith said the British Retail Consortium remained a member and that the CBI would consider making its membership more transparent.

However, she said any such move would require consultation with members.

Newton-Smith also said the CBI had “no information” about some of the claims of misconduct, including two allegations of rape. 

“We have no information that has been shared with us . . . so we haven’t been able to investigate those allegations,” she said.

“What we did look into was this issue about whether women always felt supported in raising their concerns,” she added, pointing to efforts to improve internal CBI processes.

She also softened her previous stance on whether the CBI would rename itself after the scandal. “Personally, over time, I’m sure we’re going to see a new name for the CBI,” she told the Financial Times in May. 

Asked on Tuesday whether the body would be renamed, she said: “What we are called at the end of the day, I don’t think is the most important issue . . . As with anything, changing the name would be something we consult with our members on.”