The new president of the Confederation of British Industry has admitted that the Guardian’s revelations about sexual misconduct at the lobbying group were “an appalling shock” that tipped it into a “near-death experience”.
Rupert Soames said the scandal had triggered an existential crisis, from which he is trying to rescue the organisation.
The group has lost almost a third of its staff after an exodus of fee-paying members last April left it desperately short of funds. Companies including BMW, Jaguar Land Rover, Tesco Sainsbury’s and Aviva quit or suspended their membership in the wake of allegations that spanned harassment, drug taking, and assault and rape of CBI staff by their own colleagues.
“It has had an appalling shock, a near-death experience,” Soames said. “This has been a disaster for individuals. It has caused a lot of pain. It has seriously harmed what is an important institution in the UK.”
Soames, who revived the outsourcing company Serco after its own near-death experience, was unable to rule out further redundancies at the CBI’s central London head office. “I am diligently working really hard to persuade people to come back and come back fast because if they come back fast we can be bigger, stronger and wiser. If they come back slowly we’re going to have to make sure that our income and our expenditure meet each other.”
He said he was convinced there was still a place for the CBI and that “Britain needs it”, citing the recent return of the big four accountancy firm PwC as a member.
“There are some people who are really putting their shoulder to the wheel and saying we need this organisation. It’s the only one that can speak. Nobody else has stepped into the role and we’re in a bloody general election year,” he said.
Soames, a grandson of Sir Winston Churchill, said he was persuaded to take on the unpaid role to help revive the UK’s flagging economy.
“There’s got to be a national effort to focus on getting the UK economy into a state where it can compete and grow and help productivity, prosperity. I would love to have a walk-on part in that,” he said.
He admitted there were uncertainties surrounding the CBI’s finances. “Your job is secure so long as we can get the revenue to pay for it. Full stop. If not, we will have to cut our cloth,” he said. “There ain’t no particular secret about it.”
The CBI is surviving thanks in part to additional funding from a small clutch of members, including banks. Exploratory talks about a merger with the manufacturing body MakeUK collapsed amid a dispute over pension liabilities.
After the Guardian’s investigation revealed the scale and breadth of concerns among present and former staff, the CBI hired the law firm Fox Williams to carry out an investigation. It found evidence of a toxic culture, for which its then president, Brian McBride, publicly apologised.
Its director general Tony Danker had already been dismissed by the board after the Guardian revealed unrelated complaints about his conduct in March. The CBI settled with Danker for an undisclosed sum this week and reiterated that his departure was unrelated to the other allegations.
Soames said businesses that thought that they no longer needed the CBI would find that the next government would “campaign in poetry and govern in prose”, with detailed policy proposals likely to be unveiled only after the election.
He said bosses may find their access to politicians such as Rachel Reeves, currently the shadow chancellor, limited if and when they enter government, making a unifying voice such as the CBI’s all the more important. “I would say to those CEOs: ‘I wouldn’t be surprised, were she to be in government, you’ll find her somewhat less available.”
Still, he said, the CBI must avoid the “complacency” of its past, when it was “not very good at communicating what it did”. “There is an opportunity here to rethink: what is the point?” he said.
Members and returning members could also take comfort in the knowledge that managers were now better trained and highly committed at the body, he said, as part of its wider effort to reform in the wake of the misconduct scandal.
“Britain needs a CBI and that’s one of the reasons I came here, because we need a voice that speaks across business that I don’t think anybody else can completely do.”
Soames claimed that the CBI could make a difference by ensuring that the UK reclaimed a leading role in global business regulation and by modernising red tape. This effort could help Britain manage what Soames said was a “great disruption” after Brexit and Covid.
He said that since 2000 the UK’s growth had been “relatively poor compared to nearly all of our competitors ... Life for most businesses has been hellish since 2016.”
“My personal belief is that the next five years are going to be really determinative about how the UK does probably for the next generation,” he said. “We’re not going to be able to outspend our competitors and peers, but we may be able to outsmart them. Smart means a closer coordination between business and government.”
