ALEX BRUMMER: Existential threat to the CBI

The Confederation of British Industry’s (CBI) slavish adherence to the cause of ‘Remain’, long after most of the country adjusted to the realities of Brexit, did it no good.

It meant it was out of touch with the views of more than half the country, including many smaller companies, but it also reduced its position in Westminster and Whitehall.

There was little doubt who Boris Johnson was referring to when he uttered “f**k business” in 2018.

When Tony Danker took office as director general of the 190,000-member organization in 2020, he promised a new approach.

His CBI would be less political and focused on making the most of Britain’s technology and new opportunities for investment and export. Covid may have jumped at the odds, but the McKinsey emigrant, with a Northern Irish background, looked like he would pull through.

How quickly things have changed.

Danker was caught up in allegations of sexual indiscretions and resigned.

And due to allegations of sexual harassment from a dozen women, including an alleged rape of a woman at a boat party – separate from the Danker allegations – the organization is in disarray.

The CBI, which has played a central role in our national affairs for nearly six decades, could be entering an existential crisis.

What makes the allegations so shocking is that they come from an organization that has made a strong voice for equal pay for women (an ambition still largely unfulfilled) and leaned toward political correctness. The self-awareness in the CBI hierarchy made it clear that things could not continue as before.

Canceling the annual black-tie dinner at which Bank of England Governor Andrew Bailey was due to speak in May was a good idea.

The loss of revenue from what has been a networking and fundraising event will be a blow. Equally serious will be the impact on its annual autumn conference, which has given the floor to leaders of the major parties in recent years.

It was in 2021 that then Prime Minister Boris Johnson was mocked (wrongly, in my opinion) for praising Peppa Pig as a great example of Britain’s creative outreach.

It’s not very helpful if the CBI, which considers itself the voice of business, is blacklisted by the Treasury Department and the Department of Commerce.

Whitehall does not directly pay the wages of the approximately 350 CBI colleagues. But the group almost certainly benefits from some government initiatives on skills and training.

MUCH more important to its future is maintaining the support of the big trading beasts who help fund it through membership fees.

The UK’s leading engineering group Rolls-Royce describes the allegations as deeply concerning. Audit and consultancy firm EY expressed similar concerns.

Marks & Spencer, whose chairman Archie Norman is in charge of modern governance for publicly traded companies, has notified the CBI.

It awaits the outcome of the misogyny inquiry before deciding whether to retain its membership.

The value of the CBI is its claim to the best access of UK business organizations to Whitehall, ministers and opposition parties. But there’s no shortage of rivals, each with their own merits and reach.

The British Chambers of Commerce have offices in every region and locality and ably represent the interests of small and medium-sized businesses.

And the right-leaning Institute of Directors is a critical voice that this week released a well-timed policy brief on exports in a post-Brexit world.

Then there are all sorts of effective voices for every sector of the economy, ranging from the manufacturers that make up Make UK, to UK Finance and the Creative Industries Council.

If the CBI didn’t exist, would it be missed? Gone are the days of sitting around the table with government and trade unions to dole out the spoils in wage negotiations.

The case for a large corporate group, which cannot possibly know the needs of its huge members, is marginal. The role it plays could just as well be filled by more focused, smaller trading groups.

The current allegations are shocking and appalling. But they present an opportunity for a thorough rethinking of who is the real voice of enterprise and ambition.