The Confederation of British Industry (CBI) has been struggling with serious misconduct allegations, including rape cases, which have led to an exodus of members and a suspension of government involvement with the group. The body’s CEO, Rain Newton-Smith, reported that fewer than a third of its remaining members have voted in favour of a plan to make changes in governance and culture. Following a subsequent confidence vote, the CBI suspended most activities but won by a 93% to 7% margin based on the turnout of 371 members. Over 30 companies, including NatWest, Aviva, Tesco, and Deloitte, have resigned from the group, which the government has also suspended involvement with.
The CBI is undergoing major changes, including the restructuring of governance and culture, to recover from the crisis caused by allegations of serious misconduct. The group has experienced a fall in membership numbers, which has led to the organisation being questioned about its future viability. Newton-Smith stated that the CBI remained the representative voice for UK businesses, regardless of size, in the British economy. The group remains reluctant to disclose its entire membership, citing a total of 190,000 businesses represented, most of which belong to trade associations that are direct members of the group.
The CBI CEO suggested that the bigger picture was more pertinent than worried about the name the group may change to and focused on its importance to businesses. Furthermore, Newton-Smith confirmed that the CBI had no intelligence on some of the misconduct allegations it faced and had not received reports on two rape allegations. The CEO highlighted that the group’s investigations focused on whether women felt supported verbally once they had raised their concerns, and cited efforts to improve CBI’s internal processes.
Summary
Fewer than 30% of the remaining Confederation of British Industry (CBI) members have voted in favour of implementing changes to the body’s governance and culture, following serious allegations of misconduct, including rape, in an exodus of members and the suspension of government involvement in the group. CBI has experienced tremendous backlash in recent times, leading to a drastic loss in membership numbers. Institutional members of CBI have refused to disclose their entire membership, acknowledging that most of the 190,000 businesses represented belong to trade associations that are direct members of the group. Over 30 firms, including Deloitte, Tesco, Aviva and NatWest, have resigned from CBI, which the government has also suspended its involvement with. While the CBI CEO confirmed that it had no intelligence about some of the misconduct allegations that it faced, the group’s focus is mainly on making changes to governance and culture that would allow it to recover from the crisis.
Additional piece
The CBI becomes the latest in a long line of global institutions to be hit with controversy, putting a dent in its once-solid reputation. The revelations reveal a shift in attitudes towards professional misconduct in which global businesses are placing scrutiny on behaviour. The increasing coverage of misconduct cases is believed to be part of a larger movement addressing the corporate world’s perceived culture of bad behaviour, which extends beyond the financial sector.
In terms of a way forward, one way that organisations like the CBI can prevent such unpleasant issues is to work rigorously on their internal culture, developing a prevailing two-way, confidential reporting channel for employees who want to report incidents of harassment, malpractice, or impropriety in the workplace. Additionally, a working system must include addressing the alleged incidents immediately and according to laws and best practice.
The attacks on the CBI indicate that modern businesses must prioritize maintaining the integrity of corporate governance by implementing adequate policies and frameworks to promote ethical conduct. It is crucial for companies in today’s world to continuously review and update their ethical procedures to ensure that the workplace is harassment-free. Until businesses start to hold themselves accountable, and adopt a stance of zero tolerance to unethical behaviour, the world’s image would remain tainted.
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Less than a third of the remaining CBI members voted in favor of the business lobby group’s plan to overhaul its governance and culture after a misconduct scandal, according to data released to lawmakers on Tuesday.
Defend the role of CBI extensionChief Executive Rain Newton-Smith told the House of Commons Business and Commerce Committee the group now had around 1,200 members following a crisis caused by allegations of serious misconduct, including rape, within the ‘organization.
The figure means that less than 30 percent of members voted in a confidence vote held last week.
The CBI, which suspended most of its activities in April until last week’s confidence vote on its “program for change,” won by a 93% to 7% margin based on a turnout of 371 members .
The viability of the group has been questioned by an exodus of members and the government’s decision to suspend involvement with it.
However, Newton-Smith told MPs on Tuesday that the CBI remained a representative voice for businesses of all sizes in the UK economy.
“We are very confident that we can recover from the crisis our organization has been through,” he said, outlining the changes the CBI was making to its governance and culture.
As of Tuesday, the CBI had refused to disclose its full membership, referring only to the 190,000 businesses it claims to represent.
Most of these companies were not members of the CBI, but were included in the total figure as they belonged to trade associations which were in turn direct members of the group.
Newton-Smith said the “vast majority” of direct members, now comprising “over 120” trade associations, had not left in recent weeks. But she has come under pressure from MPs for refusing to disclose how many companies and trade associations had resigned.
Insurer Aviva, NatWest bank and Tesco supermarket – all FTSE 100 companies – have been among those to leave the CBI in recent weeks, along with accountancy firms such as Deloitte and KPMG and retailer John Lewis.
The departures have dented the pressure group’s finances, forcing him to plan layoffswhile dozens of other companies, such as J Sainsbury’s, have publicly severed their ties with the group.
Asked how politicians could rely on CBI data on food prices “if the biggest supermarkets have withdrawn from even using you as a representative body,” Newton-Smith said the British Retail Consortium remained a member and that the CBI would consider making its broader membership transparent.
However, he said any such move would require consultation with members.
Newton-Smith also said the CBI had “no intelligence” on some of the misconduct allegations, including two rape allegations.
“We have no information that has been shared with us. . . so we have not been able to investigate those allegations,” she said.
“What we looked at was whether women always felt supported in raising their concerns,” she added, pointing to efforts to improve CBI’s internal processes.
He also softened his earlier stance that the CBI would rebrand after the scandal. “Personally, over time, I’m sure we’ll see a new name for the CBI,” she said he told the Financial Times in May.
Asked Tuesday whether the body would be renamed, he said: “What we’re called at the end of the day, I don’t think is the more important issue. . . As with anything, changing the name would be something we consult with our members about.
https://www.ft.com/content/ffee1fac-a3fd-4c84-a205-a95e401c8a99
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