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The Guardian - UK
The Guardian - UK
Business
Rob Davies

CBI seeks £3m from members within days to avoid financial oblivion

CBI logo.
The CBI lost members after the Guardian reported on sexual misconduct at the group. Photograph: Jonathan Brady/PA

The Confederation of British Industry (CBI) risks financial oblivion unless it can convince its remaining members to stump up £3m within the next few days, according to reports.

The scandal-hit business lobby group is in a race against time to stave off collapse, even as rival organisations jockey for position to replace it as the voice of British business.

It follows an exodus of the CBI’s members triggered by revelations in the Guardian about sexual misconduct – including two alleged rapes – which have shaken the organisation to its core.

Despite a clear-out of management, an internal investigation and a pledge to overhaul its culture, the reputational crisis has snowballed into a financial one as the CBI struggles to woo the companies whose membership fees provide most of its income.

The Confederation of British Industry (CBI) is the UK’s most prominent business lobbying organisation. It is a not-for-profit organisation founded by royal charter in 1965, after a merger of older employer bodies.  

It claims “unrivalled” access to government. It also claims to have the biggest number of policy specialists outside of Whitehall, the seat of the British government, in order to support its 190,000 business members, which are the chief source of its income. Its total income was £25m in 2021, of which £22m was from membership fees.

Its membership is composed of direct members and members of other trade bodies.

Its 1,500 direct members are businesses that actively hold membership. Fees vary significantly: top-tier businesses can pay £90,000 annually, some mid-sized companies pay half this price and smaller companies pay far less.

The bulk of its membership comes via trade bodies, and it counts these memberships within its own 190,000 total.

The lobby group has access to the prime minister and cabinet, and campaigns on issues ranging from funding for childcare to tax and skills. Its relationship with the UK government was stretched severely by Brexit, with its access to No 10 much curtailed. A remark attributed to the former prime minister Boris Johnson – “fuck business” – was considered to be aimed at efforts by the CBI and others to try to influence the post-Brexit UK-EU trade agreement.

The organisation sought to rebuild ties with the government during the early stages of the coronavirus pandemic, including working alongside trade unions and No 10 on developing the furlough scheme. 

The CBI is governed by a president and an executive committee, which, in normal times, is chaired by the director general. It also has a board of non-executive directors, which the director general sits on.

Anna Isaac   

The CBI has reportedly asked the companies that remain members to help patch up its balance sheet while it continues discussions about a potential merger with MakeUK, the manufacturers’ trade body.

Those talks have been complicated by questions over whether the CBI can find a buyer to take on its pension scheme, which would have to be hived off for the union to proceed.

Just days before its annual meeting, the CBI has asked its members for £3m to tide it over while it tries to secure its future, the Sunday Times reported.

The CBI’s accounts are usually presented at its annual meeting, scheduled for Wednesday, putting the organisation under pressure to come up with a plan to show that it can continue operating.

In a message to members before the meeting, the group promised to build a “renewed” CBI under the leadership of Rain Newton-Smith, who took over after former director-general Tony Danker was dismissed after separate allegations were made about his behaviour.

A spokesperson for the lobby group said: “As has been widely reported, the CBI has experienced some short-term cashflow challenges following an incredibly difficult year for the organisation.

“A number of options are being explored to resolve this issue and secure the footing of an organisation that remains in a strong medium- to long-term position.”

The bank HSBC is trying to convince other CBI members to back the £3m cash call, the Sunday Times reported. The Guardian has approached HSBC for comment.

The board of the CBI, led by its president, Brian McBride, has been meeting regularly to assess its financial situation amid mounting speculation that the group could run out of cash imminently.

As the CBI fights for survival, a potential successor as the voice of British business is waiting in the wings.

The business council of the British Chambers of Commerce (BCC) was launched in June – with its stated aim being to “design and drive the future of the British economy” – just weeks after the CBI was plunged into crisis.

It held its first meeting at the House of Lords last week, chaired by the BCC’s president, Martha Lane Fox.

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