Can Britain’s business lobby rediscover its mission after misconduct scandal?

For the victims of the rape, sexual harassment and bullying allegations that have rocked the UK’s biggest business lobby group, it has been a frustrating four days of silence. But, on Friday, the CBI’s president Brian McBride finally offered them a personal apology.

“The first message is that Brian McBride, personally, and this organisation are deeply sorry for what happened,” said the Scottish businessman, who is noted in his CBI profile for his “Glaswegian candour” and being a “calm, steady hand in a crisis”.

The past week has required all McBride’s steadying powers as the UK’s premier business lobby shop has struggled to contain the fallout from allegations that have led it to being frozen out of government by Downing Street and its raison d’être questioned by business leaders.

“Sorry seems to be the hardest word” taunted a headline in The Times as McBride hunkered down in the organisation’s City offices, reassuring CBI employees and making private calls with the group’s members in a bid to convince them that the organisation can win back public trust.

An apology to the victims was issued in a press release on Tuesday morning, leading some CBI insiders to say the failure to apologise in person had left victims feeling ignored.

One former female staffer said the organisation had “forgotten how to be human”, handling the issue with legalistic denials rather than heartfelt apologies.

“Those women, including a woman who was allegedly raped and had her concerns dismissed, are sitting there, watching this. But the CBI failed not just as business, but as moral leaders and there is nothing stopping them remembering that tomorrow,” she added.

McBride defended his handling of the crisis, arguing that the CBI board had moved with remarkable speed, sacking director-general Tony Danker and appointing his replacement, the organisation’s former chief economist Rain Newton-Smith, in the space of a week.

Danker’s dismissal on Tuesday came less than a month after he stepped down from his role, following a unanimous meeting of the CBI board over the Easter weekend.

“Were we acting hastily? Yes, we did act pretty hastily, but we also acted on very firm ground,” said McBride. “We had pretty good legal advice all the way through this process. So we dismissed Tony on Tuesday morning.”

The full contents of the independent report by law firm Fox Williams that led to Danker’s sacking remain known only to the board. McBride confirmed that Danker had not seen the report, but said the former director-general had met with investigators and issued a statement to them. Danker declined to comment.

But McBride accepts that Danker’s firing alone cannot draw a line under the CBI’s travails after a dozen women came went to The Guardian newspaper, making a fresh set of allegations, including of an alleged rape at a staff party in 2019. Three more CBI staffers have been suspended pending the outcome of a second Fox Williams report which is expected “imminently”. 

The CBI has promised a “root and branch” review of its office culture, which McBride said would look at the “layers of management” that meant that complaints did not reach the upper echelons, with complainants preferring instead to go to the press. “Our people felt that they couldn’t push it. That seems to me, is a culture that needs to be looked at,” he said.

The toxic workplace culture runs deep, according to several former CBI members of staff spoken to by the Financial Times, some of whom made allegations of bullying by senior managers. “You would have glass-doored offices and people being dragged into rooms to be shouted at. People would be shouted at in meetings which felt like group humiliation. That would happen reasonably regularly,” recalled one former member of staff.

McBride is adamant that Newton-Smith, a longtime CBI insider who was at the organisation for more than eight years until moving to Barclays in March, is the right person to bring change. “Rain has been in the organisation. She knows what’s good about it, she knows what’s bad about it, and . . . has been standing up for the advancement of females in this organisation for a while,” he said.

Several insiders who worked with Newton-Smith at the CBI agreed. Helen Brocklebank, the chief executive of Walpole, the luxury goods trade association and CBI member, said: “She’s an insider so wherever there are problems, she will know how to resolve them.” The CEO of a hospitality company and CBI member estimated that members were “70-30 in favour of Rain”.

But detoxifying the CBI is only one half of the challenge that awaits Newton-Smith, who is expected to take the reins before the end of May. The other is to save the group as a growing number of business leaders question its future, with leading members including Rolls-Royce saying they are reviewing their membership.

Two FTSE 100 company chairs who spoke to the FT were privately unenthusiastic about the organisation.

“In terms of getting the government to pay attention to the needs of British industry, it seems they have failed. The organisation needs a complete reinvention,” said one.

McBride, who took T-Mobile into CBI membership and paved the way for Amazon to do the same, believes passionately that the CBI has a role to play, while acknowledging that it needs to find a “sharper” focus, that will be part of the “stock-take” that has been forced on the organisation by the current crisis.

“This country, this economy, this society, parts of it are on its knees today, and needs a lot of rework, and a lot of investment,” he said. Only the CBI has “the reach” to be the voice between business and government needed to generate the wealth that underpins the tax base on which public services rely, he added.

But before group can take back that role, McBride and Newton-Smith will need to convince the government and the thousands of members whose fees underwrite the bulk of the organisation’s £25mn turnover, that it can restore both its commercial credibility and moral authority.

Several members have said their subscriptions are under review. Andy Wood, chief executive of Suffolk-based brewer Adnams, which pays several tens of thousands of pounds to the CBI each year, said he was exploring with his legal team whether the lobbying organisation had fallen foul of its contract.

McBride said that a handful of members had already cancelled their memberships but added that the vast majority were waiting until publication of the next Fox Williams report.

Until then, McBride admitted, the CBI is effectively “on pause” until it can clearly demonstrate that it has made a fresh start. “Today, I’ve got broad support [of members],” he said, “but they do want to see us following through on the actions.”

Additional reporting by Ian Smith, Josephine Cumbo and Bethan Staton

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