Crisis-hit business lobby CBI faces survival vote

BRITAIN'S scandal-hit business lobby group, the CBI, faces a vote crucial to its survival on Tuesday (6), with members urged to back reform under new leadership after allegations of sexual harassment by staff.

The Confederation of British Industry risks folding after claims that more than a dozen women were sexually harassed at the organisation and two others had been raped.

Police have launched an investigation following the allegations reported this year by The Guardian newspaper, triggering a shake-up at the organisation and an extraordinary vote on its future.

The allegations, described as "absolutely devastating" by new CBI director general Rain Newton-Smith, caused an exodus of member companies - and the launch on Monday (5) of a rival body by the British Chambers of Commerce (BCC).

Newton-Smith, who has described the situation as a "really deep and painful crisis" for the CBI, will tell delegates she is "confident and determined this will be a turning point for us, the start of a new chapter, for a renewed CBI".

"We're ready to deliver a better CBI. We just need one thing now – your vote," she will say, according to extracts of her speech released in advance.

The resolution at the extraordinary general meeting, which begins at 12 noon local time, calls on remaining member companies to put their confidence in CBI proposals to reform its "governance, culture, and purpose".

The result of the vote is expected later on Tuesday (7).

The organisation has proposed the creation of a People & Culture Committee plus an external expert-led Culture Advisory Committee.

And it has created the role of chief people officer.

At the same time it is cutting jobs as the reduction in members slashes revenue.

'Different representation'

Newton-Smith will say it is important for the CBI "to put our people, our culture and our values front and centre".

The scandal comes as UK business looks for leadership during a cost-of-living crisis, with the country's elevated inflation cooling more slowly than expected.

In a move seen as taking advantage of the crisis, the BCC has launched the rival Business Council.

"We have been talking to the nation's largest corporates and it has become clear to us that they are looking for a different kind of representation," said BCC director general Shevaun Haviland.

Founding partners include British energy group BP and Heathrow airport.

But Newton-Smith will say a revamped CBI can still be a powerful driving force. "Even our competitor groups have admitted they can't match that," she will assert.

About one dozen firms, including engineering giant Siemens, Microsoft and oil firm Esso, have signed a joint letter published in The Times newspaper backing the CBI reforms.

The signatories said that while the "CBI has recognised its failings", they "will hold it to account on putting its plan into action".

The letter added that "as the UK faces strong economic headwinds and anaemic growth and with a general election expected before the end of next year, it is vital that there is a credible voice representing all sectors and sizes of UK business.

"The CBI can do this."

It comes after major companies including Unilever, UK bank NatWest and BMW Group cancelled their membership.

Others have suspended their involvement - and cannot vote on Tuesday - while the UK government has distanced itself from the CBI.

Newton-Smith took over from Tony Danker, who recently departed over a separate misconduct allegation.

(AFP)