The future of Britain’s most prominent business lobby group, the Confederation of British Industry, is on a knife-edge as it relies on the backing of trade bodies in a crunch vote.
The CBI has been canvassing support from its members ahead of an extraordinary general meeting on Tuesday that will decide on its fate after sexual misconduct allegations revealed by the Guardian.
Voting ends on Tuesday, with the result expected between 4pm and 5pm. Members can attend in person or virtually and all votes will be submitted electronically. The meeting in London will be held from 12pm with 90 minutes for presentations and a Q&A session. It is closed to journalists.
Winning the backing of trade bodies, which span from farming to haulage, is seen as key to rebuilding ties with the government and the Labour party, according to CBI insiders. These bodies – rather than individual member companies – make up the vast bulk of the 190,000 firms that the business lobby group has claimed to represent.
Trade associations regarded as critical to the CBI’s survival include the National Farmers’ Union, which has about 50,000 members, and hauliers’ body Logistics UK, which has 20,000. Each trade association has one vote.
The CBI president, Brian McBride, said in an article in the Financial Times that the vote’s outcome was “not a given”.
The new director general, Rain Newton-Smith, will call the meeting the “start of a new chapter”.
“I’m confident and determined this will be a turning point for us,” she will say.
“It’s so important to me, and for those who raised their voices, to put our people, our culture and our values front and centre.
“This is a difficult but important journey. We’ve made great strides forward, but it will take real dedication. I am resolutely committed to leading that change and restoring the CBI to health.”
The CBI has already suffered an exodus of big businesses including John Lewis and NatWest, which quit in April after new allegations of rape and sexual harassment at the lobbying organisation. The CBI was forced to suspend operations and embark on a cultural overhaul.
A greater focus on trade associations, away from individual companies, would mirror some international examples of business lobby groups, such as Germany’s influential Federation of German Industries, the BDI, which has a membership of 39 sectoral groups.
But while winning trade groups’ support might help the CBI in its bid to re-engage with the government, it will not resolve some of its financial challenges. Corporate memberships are a crucial part of its income. Its total income was £25m in 2021, of which £22m was from membership fees.
Members have had since 11am on Wednesday to vote after being presented with a new prospectus, aimed at showing the CBI’s future ambitions as a slimmed down body.
Several of trade associations and companies said they were unsure of how the vote would be handled. They did not know whether it would be presented as a majority of members, or as enough support for the CBI to claim to represent business as a going concern.
The CBI did not offer any clarification on the process or how it would be publicly presented.
Members have been asked to vote on the following resolution: “Do the changes we have made − and the commitments we have set out − to reform our governance, culture, and purpose give you the confidence you need to support the CBI?”
One senior figure at a business association who intends to vote in favour of the CBI said that it still needed to hear more about how women who had raised complaints and concerns were being supported. “This wasn’t really in the prospectus,” they added.
Others said the existential crisis facing the organisation had forced them to reconsider its value, and were unsure about how they would vote. The allegations about sexual misconduct were “horrendous” but they had also triggered questions over whether the body was “as useful as it once was”, according to one leader at a big trade association.
A Logistics UK spokesperson said: “We are reviewing our membership. We have received the prospectus and representatives will be going to the meeting to listen to what is said, before taking a position on how we will vote.”
Several others, including the Federation of Master Builders, the NFU and the British Retail Consortium, declined to comment ahead of the meeting.
The CBI’s workforce of about 300 staff has been told that, whatever the outcome, the body expects to have to cut around a third of its wage bill.
