2023-04-24 19:29:50
The president of the crisis-stricken CBI said on Monday he was not sure it was possible for the UK business lobby group to recover following weeks of damaging allegations regarding its toxic workplace culture.
In an open letter to CBI member companies, Brian McBride issued a MEA culpa following a report by the law firm Fox Williams into sexual harassment allegations at the organisation.
McBride acknowledged the CBI made a “grievous error” in trying to resolve sexual harassment cases internally instead of sacking offenders.
He said he was outlining “the steps we are taking to give you reason to consider trusting us once more”, but added: “Whether that is possible, I simply don’t know.”
He also said he did not know if the organisation might “effectively serve” its members once more “as a changed and much improved CBI”.
McBride’s plea came following more than 50 of the biggest names in business announced they were either cutting or suspending ties with the CBI following a second allegation of rape was published last Friday by The Guardian.
A four-page summary of the Fox Williams report commissioned by the CBI set out a long list of measures to improve the organisation’s workplace culture, including compulsory training on harassment and bullying.
McBride, a former boss of Amazon UK, said the senior CBI leadership team had believed that the group’s corporate culture was “strong” but was left with a “sense of shame . . . accompanied by one of bewilderment” when the allegations emerged.
These include accounts from more than a dozen women who have been victims of rape, sexual harassment or bullying at the CBI, according to reports in the Guardian.
The two allegations of rape are now being investigated by City of London Police: one at a 2019 staff party and another in an international office for which the date has not been disclosed.
The CBI announced this month that three staff members had been suspended since the allegations came to light.
In his letter, McBride said that in future the CBI would operate a “zero-tolerance approach to sexual harassment and bullying behaviour” and that “a number of people have been dismissed for failure to meet those standards”.
He also apologised for the CBI communicating “poorly and ineffectively” with the members whose subscriptions form the bulk of its £25mn annual revenues that are vital to meeting the estimated £1.25mn monthly wage bill for its 300 staff.
McBride said the communications failures had led the organisation to appear “cold-hearted and toxic”: a sentiment echoed by several affected women who spoke to the Financial Times.
However, a former female CBI staffer, who had previously raised a complaint over an inappropriate comment regarding her appearance made by a senior figure at the organisation, welcomed McBride’s letter.
She said: “The CBI can’t turn back time or undo the harms women experienced. But it can make decisive changes to ensure such awful acts never happen once more. This is clearly a strong commitment to make those changes.”
A second female former CBI staffer also welcomed McBride’s frank acknowledgment of the organisation’s failings, adding that changes should provide confidence that it might still become a “supportive and safe space where great people do great work”.
However, management experts questioned whether the CBI might really be reformed by an insider following the group appointed its former chief economist Rain Newton-Smith as its new director-general this month.
“Without reshuffling the top radically you might only have some ceremonial change and a blame game that keeps the same malpractices anchored in the organisation,” said Thomas Roulet, an associate professor in organisation theory at the University of Cambridge
The fallout from the allegations has left the CBI battling to survive. Last Friday it suspended all external activities and membership events ahead of an extraordinary general meeting in early June when it has invited members to decide on the future of the organisation.
Both the government and the Labour party have frozen out the CBI since the allegations emerged.
Chancellor Jeremy Hunt offered little solace when asked regarding the organisation at a government event with 250 business leaders on Monday.
He said the government “would not wait” for the CBI to work through its problems as ministers sought to rebuild relations with corporate bosses at the event.
Hunt added there was no point in engaging with the CBI since its members had “deserted them in droves”, but said he hoped there would be an independent business group to represent wider industry in the future.
Several businesses that were part of the exodus of companies on Friday said McBride’s plea for a second hearing for the CBI had probably come too late.
“He’s right when he says he’s not sure whether it’s possible for the CBI to recover,” said an executive at a company that recently terminated its CBI membership. “I can help him there — it can’t.”
The boss of a trade association that has suspended its CBI membership said the group’s situation remained “very serious”.
They added: “The allegations have been really shocking and their response quite clumsy, despite their best efforts. We need to see what their next steps are now, but it’s really not clear there’s a way back for them now.”
The CBI has continued to lose members. Prudential, the UK’s largest insurer by market value, terminated its membership over the weekend, according to one person briefed on the situation.
Simon Walker, the former director-general of Institute of Directors, another business lobby group, said that even if McBride was correct that it was impossible to restore trust in the CBI, it was important to preserve its core functions from the wreckage.
These included representing the UK on the world stage at the B7 and B20 business meetings, and providing an institutional framework which feeds into economic decision-making, including the Bank of England’s Monetary Policy Committee. “If the CBI doesn’t survive — and I hope it does — it’s important what it does have is not lost,” said Walker.
Additional reporting Ian Smith in London
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