The future of the Confederation of British Industry is in doubt after a spate of the UK’s biggest companies, including John Lewis and NatWest, canceled their memberships following The Guardian’s publication of new allegations of rape and sexual harassment. in the business lobby group.
The CBI, which claims to represent 190,000 members who employ almost 7 million people, will count the cost of the loss of lucrative annual membership fees from a number of organisations, at a time when the government has suspended all activity with the group waiting for the result. of an investigation
The first of nearly 50 major companies to announce on Friday that they would break or pause their relationship with the CBI was insurance company Aviva, which notified the CBI of the decision in the morning, saying the lobby was no longer in a position to speak. on behalf of the British business community.
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The Confederation of British Industry (CBI) is the UK’s leading business lobby organisation. It is a non-profit organization founded by royal charter in 1965, following a merger of older employer bodies.
It claims “unmatched” access to the government. It also claims to have the largest number of policy specialists outside Whitehall, the seat of the British government, to support its 190,000 business members, who are its main source of income. Its total revenue was £25 million in 2021, £22 million of which came from membership fees.
Its membership is made up of direct members and members of other union organizations.
Its 1,500 direct members are companies that have active membership. Fees vary significantly – top tier companies can pay £90,000 a year, some mid-sized companies pay half this price, and smaller companies pay much less.
Most of his membership comes from trade bodies, and he counts these memberships toward his own total of 190,000.
The lobby group has access to the prime minister and cabinet, and campaigns on issues ranging from childcare funding to taxes and skills. His relationship with the UK government was severely strained by Brexit, with his access to No 10 severely restricted. A comment attributed to former Prime Minister Boris Johnson, “fuck business”, was seen as targeting efforts by the CBI and others to try to influence the post-Brexit UK-EU trade deal.
The organization sought to rebuild ties with the government during the early stages of the coronavirus pandemic, including working alongside unions and the No 10 in developing the furlough plan.
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, of which the CEO is a part.
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An Aviva spokesperson said: “In light of the very serious allegations made and CBI’s handling of the process and response, we believe that CBI can no longer fulfill its primary role: to be a representative voice for business in the United Kingdom. Therefore, we have regrettably terminated our membership with immediate effect.”
The decision is understood to have been made before The Guardian published the latest allegations on Friday, in which a woman said she was raped by two male colleagues while working there. The sources also said another woman working in the organization’s London office was harassed by a male colleague in 2018.
The scandal-ridden group had already hired law firm Fox Williams to conduct an independent investigation into a separate series of allegations reported to The Guardian by more than a dozen former employees, including a woman’s claim that she was raped by a manager during a 2019 summer boat party on the river Thames.
A spokesman for the John Lewis Partnership, which owns the Waitrose supermarket and department store chain, said: “Due to the most serious and continuing allegations relating to the CBI, we have decided to end our membership with immediate effect.”
Banking group NatWest, which had previously halted activity with the CBI, said on Friday it had “withdrawn” its membership after “careful consideration”, adding that it had lost confidence in the organization’s ability to meet its business representation function.
As the announcements gained traction on Friday afternoon, other companies that confirmed they would cancel their CBI memberships included automakers BMW and JLR; telecommunications companies Virgin Media O2; and EY, one of the UK’s Big Four accountancy firms.
A wave of other companies said they were suspending ties with the CBI while allegations of sexual misconduct and harassment were investigated. These included the supermarket chains Tesco, Sainsbury’s, Asda and Lidl; the Rolls-Royce engineering and aerospace company; accounting firm PWC; the power company SSE; and Unilever, the consumer goods company that owns brands like Marmite and Dove.
PwC said in a statement that any organization representing UK business “must be a trusted voice.” A spokesperson added: “With multiple horrific allegations hanging over its head, the CBI is currently unable to do its job.”
The Guardian understands that the oil companies BP and Shell have also halted all activities with the organization, along with National Grid.
Other trade bodies were also among those to have their CBI membership suspended, including Energy UK, which represents more than 100 of the UK’s largest energy companies, and the Association of British Insurers, which said it was “untenable” to keep its membership in light of the latest allegations.
Last week, the CBI fired its director general, Tony Danker, whose conduct was part of a separate Fox Williams investigation, which related to entirely separate allegations about his conduct.
Dame Helena Morrissey, a former city fund manager and founder of the 30% Club, which campaigns for more women in boardrooms, said she believed member departures would “accelerate what would have been an inevitable decline.”
Morrissey, who previously urged CBI members to vote with their feet and leave the organisation, criticized the way the CBI had handled the allegations, saying it had “complicated the problem”. She said there had been a “lack of process” for handling complaints.
“We can’t make young women look and think ‘I’m not going to join the industry, I’m not going to go into business’ because it’s a terrible culture and terrible things can happen. Obviously, it ruins it for a lot of men, too,” she said.
Morrissey asked how the organization could survive without membership fees, estimated at £90,000 a year for large companies, from several high-profile companies.
However, an industry source said some CBI members had been reluctant to cancel their memberships in case an exodus caused the business group to collapse. “They are too important as an institution not to exist,” the source said.
Another senior business figure, who asked not to be named, told The Guardian that the CBI could be forced to close before a cash flow crisis later this year.
The source said many CBI members pay annual membership fees in January, meaning those who have ended their relationships would be looking closely at their contracts to see if they can recoup some of the cost.
In the past, the CBI was one of the “big five” trade associations, along with the Federation of Small Businesses, Make UK, the Institute of Directors and the British Chambers of Commerce, all of which have “a very close relationship with the government,” according to the source
“I already heard that the government started referring to them as the ‘big four,’” they added.
