She’s the woman with the unenviable task of assuming the leadership of Britain’s largest business group after a misconduct scandal.
Rain Newton-Smith has been appointed director general of the Confederation of British Industry (CBI). Her predecessor, Tony Danker, was sacked after an independent investigation into his workplace conduct.
Newton-Smith will be familiar to the CBI’s employees, and to the 190,000 British businesses it claims to represent. The 47-year-old was the group’s long-serving chief economist, from August 2014 until March this year, when she left to join the lender Barclays as a managing director, responsible for strategy and policy, sustainability and environment, social and governance (ESG).
Just a month ago, Newton-Smith expressed her excitement at her new role on the professional networking site LinkedIn, thanking Barclays for the “opportunity to combine personal and professional passions at a great institution”. This appeared a good fit for someone whose Twitter profile says she is “passionate about things climate and biodiversity”.
However, in a what is likely to be a blow for her new employer, itself a CBI member, Newton-Smith is heading straight back out of the door after being asked to lead the business group at a critical time.
The CBI’s decision to task someone with such a longstanding connection to the organisation with revamping its culture may raise eyebrows.
The Guardian understands that she has been appointed to the top job without a formal recruitment process, and will face a daunting in-tray once she returns to the organisation.
The independent inquiry into allegations of sexual misconduct by senior figures at the CBI, first reported by the Guardian, has not ended with Danker’s departure, and other employees remain suspended while other allegations are investigated.
Newton-Smith will have to decide how to reform the organisation and try to rehabilitate its reputation once the inquiry has concluded.
A vocal commentator on the struggles faced by businesses after the pandemic, she will also have to choose the CBI’s stance in the run-up to the next general election, at a time when the group’s members are being squeezed by rising costs and concerned about the economic outlook.
Like a raft of former prime ministers, high-profile economists and other members of Britain’s elite, Newton-Smith gained a degree in philosophy, politics and economics (PPE) at Oxford University, before completing a master’s at the London School of Economics.
She may describe herself on Twitter as a “reformed chief economist” – and a “mother of four inquiring minds” – but Newton-Smith had a notable career in economics, including her first job at the Bank of England, where she was a economist and research adviser to the Bank’s rate-setting monetary policy committee (MPC) unit.
Stints followed advising the UK executive director at the International Monetary Fund, and more than five years as the head of emerging markets at the forecaster Oxford Economics.
Indeed, she was previously named as a possible candidate for the role of an external member of the MPC at the Bank when the job became available in 2021, and at a time when the organisation was coming in for criticism over a lack of diversity and failure to appoint more women.
While she was not ultimately appointed to the job making decisions on UK interest rates, Newton-Smith clearly enjoys the respect of several City grandees.
Her appointment as director general was welcomed by Mike Rake, a former CBI president and former chair of FTSE 100 companies including BT and easyJet.
Rake described Newton-Smith on Twitter as “an excellent and important choice for the CBI and the importance of the role it fulfils”. Paul Dreschler, another erstwhile CBI president and former FTSE chairman, called her an “excellent appointment” during “tough times” for the CBI.
When she returns to the CBI’s City headquarters, Newton-Smith will have to persuade the group’s membership that an old face can bring fresh leadership. She will probably also have her work cut out convincing British businesses to stick with the organisation as it attempts to recover from a scandal which has damaged its reputation among businesses and politicians alike.
