CBI scandal: an overview

What happened at the CBI? 

The Confederation of British Industry (CBI) has been embroiled in a sexual misconduct scandal, with allegations of rape, sexual harassment and discrimination being reported this week in an exposé by The Guardian

What does the CBI do?

The CBI is a not-for-profit industrial body or lobbyist group which represents 190,000 UK businesses. Until news of the sexual misconduct scandal broke, the body’s members included the likes of John Lewis, BMW, Virgin Media O2, Aviva, Zurich, Phoenix Group, Natwest, Mastercard, ITV, Lloyds of London, Schroders and EY – all of whom have cancelled their membership this week. The City of London Corporation, the governing body of the Square Mile, also announced it was leaving the group on Tuesday (25th April.) 

The CBI has been operating since 1965, when it was founded by Royal Charter. The industrial body has a close relationship with the government, promoting the interests of its member businesses during the process of public policy creation. That relationship was “paused” in early April when accusations of misconduct first became public. The Department for Business and Trade said: “We are postponing ministerial engagement with the CBI until the legal investigation has concluded.”

The CBI is to hold an extraordinary general meeting in June to discuss the allegations until which it will suspend all policy work. There have been calls by several industry figures for the confederation to disband.  

Who was accused of sexual misconduct and rape at the CBI? 

More than a dozen women – both current and former employees at the CBI – came forward with claims of sexual misconduct and two cases of alleged rape. 

The allegations made against the CBI, according to The Guardian, include: 

  • Attempted sexual assault by a manager at a staff party in 2019.
  • Explicit images sent by a senior manager to junior female staff over several years.
  • Senior managers behaving unprofessionally and inappropriately including allegations of a former board member touching a female employee’s bottom and making a sexualised remark to another woman about her appearance.
  • A manager propositioning women after they felt he pushed them to drink more alcohol, while they were already drunk.
  • Widespread use of cocaine at official CBI events.
  • Stalking allegations. 
  • Two alleged cases of rape – one at the same staff party in 2019 mentioned above and another taking place while the alleged victim was employed by an overseas office of the CBI. 

Sources claim there was a toxic environment at the CBI which allowed such misconduct to take place without fear of consequences. 

Tony Danker, director-general of the CBI stood down from his post this week after accusations that he behaved inappropriately towards a female member of staff. He has not been linked to the rape allegations. 

HR failures

One of the women who spoke to The Guardian about her experiences at the CBI said: “There are some kind men who work at the CBI. But there are also men who prey on younger women. The experience of being targeted destroyed my confidence at work, and in other parts of my personal life.”

Some of the women have raised concerns about the handling of the inquiry, with some sources saying they have been asked to raise complaints with the CBI in the first instance. One woman said: “It’s been scary. I am trying to protect my colleagues by speaking out about hidden problems. There is a real danger from some of these people.”

The woman who claims she was raped overseas while working for the CBI says she felt she had “nowhere to turn” due to a lack of HR support. 

Toxic culture

In an open letter to its members, CBI president Brian McBride admitted it had failed to protect its employees. “We failed to filter out culturally toxic people during the hiring process,” said McBride. “We failed to conduct proper cultural onboarding of staff. Some of our managers were promoted too quickly without the necessary prior and ongoing training to protect our cultural values, and to properly react when those values were violated. In assessing performance, we paid more attention to competence than to behaviour. Our HR function was not represented at board level, which reduced escalation paths to senior levels of the company when these were most needed. And we tried to find resolution in sexual harassment cases when we should have removed those offenders from our business.”

He added that this was the CBI’s “most grievous error” because it led to a reluctance from victims to come forward. “It allowed that very small minority of staff with regressive – and, in some cases, abhorrent – attitudes towards their female colleagues to feel more assured in their behaviour, and more confident of not being detected. And it led victims of harassment or violence to believe that their only option was to take their experiences to a newspaper.” 

The CBI says it has implemented a zero tolerance policy for sexual misconduct and a number of people have already been dismissed for failure to meet those standards. It has also selected a new – female – director general; Rain Newton-Smith, and has installed a “permanent, independent and confidential whistleblowing channel outside the CBI for people to come forward with past and future concerns about misconduct.” It has also hired an external HR consultancy to “examine any further complaints of misconduct made by colleagues while the wider review takes place, and our internal processes are reformed.” Additional training programmes have also been put in place. 

An impossible task? 

Newton-Smith now has the difficult – and perhaps impossible – task of gaining back member trust ahead of the extraordinary general meeting in June. “I am not for a moment saying that the rebuild of our culture and our organisation is going to be complete by early June,” she told the BBC. “But what I need to do and show is that we have done enough to earn back trust from businesses. People are hurting in this organisation and they also need time to heal. My plea to businesses is these things take time.” 

UK Chancellor Jeremy Hunt has said the Government will not wait for the CBI to sort out its issues before engaging with business and will continue to consult with industry representatives directly. “We want to engage the whole time, every week, every day…There’s no point engaging with the CBI when their own members have deserted them in droves. So we want to engage with a body that speaks for business, it’s incredibly important for me, when I’m constructing budgets to have someone I can turn to who speaks for British business.”

A replacement for the CBI?

Sky News reported this week that several businesses have been contacted about launching an interim alternative to the CBI known as “BizUK.”

The temporary body is being put together by public affairs firm, WPI Strategy. 

In a letter to FTSE-100 companies, WPI director Nick Faith said BizUK would “support the representation of business to the main political parties in this critical pre-election period.”