Scandal-Hit CBI Locks Horns With Rival Before Crucial Vote

Sabah Meddings and Irina Anghel
·3 min read

(Bloomberg) -- The Confederation of British Industry faces a crunch vote over its future on Tuesday amid a war of words with one of the business lobby group’s biggest rivals.

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The CBI, which risks collapse triggered by a sexual assault scandal, has asked its members to support a reform program aimed at winning back trust. Dozens of the UK’s largest companies have suspended engagement with the group following a series of allegations from CBI staff, including two who said they were raped by colleagues.

At the start of the most critical week in its history, the CBI was threatened by an initiative by another business group. The British Chambers of Commerce announced plans to form a “business council” including founder members such as BP Plc and London Heathrow Airport.

Shevaun Haviland, director general of the BCC, said that companies were looking for a change and “now is the right time to speak up.”

Tables Turned

CBI Director General Rain Newton-Smith said Tuesday morning that the timing of the BCC’s move “has actually raised a few eyebrows.” She told the BBC’s Today program that the rival business group lacks the CBI’s “depth of experience” with economic surveys and policy analysis.

Karan Bilimoria, the Cobra Beer entrepreneur and former president of the CBI and who remains on the board, said he was confident of a “clear sign of confidence and support” from members. However, he added that “had the tables been turned, I would be doing my best to support my fellow business organizations, not trying to take advantage of any difficulties that they are going through.”

During a phone interview, Bilimoria said: “So I was very disappointed to hear and read what I read.”

Richard Burge, chief executive officer of the London Chamber of Commerce and Industry, said in a statement Monday that “for too long, businesses have been constrained by a form of policy monoculture, where one overarching organization has monopolized engagement with government.” He said he welcomed the BCC’s initiative.

Government

The government suspended all engagement with the CBI in April, depriving the group of one of its core strengths — a history of meeting ministers and civil servants to present its analysis of key policy areas.

“Why won’t you speak to us?” Newton-Smith asked during Tuesday’s interview with the BBC. “We need to have a moment when we can move forward.” She said the government and opposition parties had seen the CBI work effectively in the recent past, citing the furlough scheme developed during the pandemic.

Some of Britain’s biggest and best-known businesses have quit the CBI, including John Lewis Partnership Plc and NatWest Group Plc.

All of the so-called Big Four audit firms have turned their backs on the group. A spokesperson for KPMG said its membership had elapsed on June 1 and that it wouldn’t attend the vote. EY terminated its membership in April and Deloitte withdrew from the group last month. PwC suspended engagement with the CBI and is not taking part in the vote.

Read More: Big Business Shuns CBI Group’s Crucial Vote on Its Future

The CBI needs more than 50% of votes to support its program, with members receiving one vote each.

At its extraordinary general meeting, Newton-Smith will directly address members. “I’ve seen what we can achieve, and how powerful we can be in driving change,” she is expected to say according to released extracts. “Even our competitor groups have admitted they can’t match all that.”

CBI members will be asked to vote on whether the changes give them the confidence they need to support the CBI. The result is expected between 4 p.m. and 5 p.m.

(Updates with comments from CBI boss and other details from fourth paragraph.)

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