2023-06-05 18:21:07
The CBI was struggling on Monday to win public backing from leading UK companies on the eve of a crucial vote of confidence in the business lobby group, which has been pushed to the brink of collapse by allegations of sexual and other serious misconduct.
At an extraordinary general meeting on Tuesday, companies that are members of the CBI will be asked to vote on whether proposed changes to the organisation’s leadership, governance, culture and lobbying activities give them confidence to support it.
It follows the suspension of almost all CBI activities following the Guardian newspaper published allegations of serious misconduct at the group, including two claims of rape that are being investigated by police.
Companies that have quit the CBI following the allegations will not get a vote in Tuesday’s poll while others that paused engagement with the group are holding off on deciding whether to back the organisation.
Each CBI member will have one vote irrespective of size. In theory a simple majority would be enough to carry the confidence vote for the CBI but a larger majority will be needed if the organisation is to build momentum towards restoring its credibility.
Lord Karan Bilimoria, vice-president of the CBI, told the Financial Times: “It has to be just over 50 per cent to carry but I’m confident it will be much higher than that.”
CBI members that include trade bodies warned winning the vote would not necessarily be enough to secure the future of the group, whose bosses are hoping a victory will convince ministers to end their embargo on engaging with it.
“Tomorrow is regarding opening up a path back rather than switching on a light switch,” said Neil Carberry, chief executive of the Recruitment & Employment Confederation, a trade association that is a CBI member.
The head of another trade body that is also a CBI member added: “If we vote in favour it’s more a case of this being a permission to continue reform and rehabilitation rather than formal approval.”
The government’s decision on whether to start working once more with the CBI rests with Prime Minister Rishi Sunak, according to Conservative party insiders.
“The bar for re-engagement is one for Number 10,” said one Tory official. “They are waiting to see the reforms and what CBI members decide.”
Writing in the Financial Times in a final appeal to members ahead of the vote, CBI president Brian McBride said “the outcome of Tuesday’s vote isn’t a given”.
“We don’t take the result for granted and we need you to support our plan,” he added.
The UK operations of Siemens and Microsoft led an effort over the weekend to secure signatures for a letter of support for the CBI ahead of Tuesday’s vote but gathered only 13 signatures.
None of the CBI member companies contacted by the FT on Monday was willing to say publicly they would vote to back the organisation, but one person close to the group said: “We’re pleased to see some of our members coming out in support and we’re encouraged by some of the conversations we’ve had in recent days.”
KPMG, which employs regarding 17,000 people in the UK, was the latest big business to quit the CBI, saying it allowed its membership to expire on Thursday.
The accounting firm was closely tied to the CBI for several years, providing staff on secondment as advisers.
Of the companies that have paused engagement with the CBI, both PwC and Flutter, owner of Paddy Power Betfair, do not plan to vote on Tuesday. Diageo has yet to decide how it would vote, said a person familiar with the matter.
The CBI is expected to publish the percentage breakdown of votes in favour of its proposed motion of confidence, but it is unclear whether the level of turnout will be disclosed. Media will be excluded from the extraordinary general meeting.
The CBI faces a financial crunch following dozens of members cancelled or paused their subscriptions in April. It has told staff it must slash its wage bill by one-third.
Meanwhile, the launch of a separate business council on Monday by the British Chambers of Commerce provoked a backlash from other corporate lobby groups.
The council appeared to be a move to become the voice of the UK’s leading companies, but a person at one trade body called it an “unpalatable” solution to the CBI crisis.
Additional reporting by Peter Campbell, Laura Onita, Anjli Raval, Joshua Oliver, Madeleine Speed and Siddharth Venkataramakrishnan
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