CBI: Scandal-hit business group wins survival vote

The CBI has won a key confidence vote over its future after members overwhelmingly backed the lobby group following a series of scandals.

The CBI said that 93% of the 371 members who voted backed its plans to reform the organisation.

Rain Newton-Smith, its new director general, said the result is "a really strong mandate from our members".

However, some companies such as engineering giant Rolls-Royce said its membership remains suspended.

The CBI held the vote after the Guardian published allegations of sexual misconduct at the group, including two claims of rape which are currently being investigated by the City of London Police.

In response, the CBI set out a number of reforms and asked members to take part in a confidence vote on its future, the result of which was made public on Tuesday afternoon.

It is not clear how much of the organisation's entire membership the 371 companies and trade associations who voted represents.

The CBI says on its website that it has 700 member organisations but following the misconduct allegations, firms and associations have left the group.

Meanwhile, some companies like BT, who suspended their membership of the CBI but were eligible to vote, told the BBC they would not take part in the ballot.

The CBI has refused to say how many members it has "due to commercial reasons" but Ms Newton-Smith said the 371 who voted was a "huge proportion of our membership".

However, the BBC's business editor, Simon Jack, said it was unclear how ringing a mandate this was.

The CBI by its own admission says it will be a smaller organisation. It is too soon to say they're in the clear. This is the beginning of their mission to establish trust.

One of the CBI's core functions is to speak with the government on behalf of businesses.

The government paused any activity with the CBI following allegations of sexual misconduct at the group which were revealed in the Guardian newspaper.

Asked whether it would now re-engage with the CBI following the vote, a spokesperson for the Department of Business and Trade said: "While this is a matter for the CBI and their internal processes, we will continue to engage with businesses on a case-by-case basis and business groups where appropriate."

Danni Hewson, head of financial analysis at AJ Bell, said the business lobby group still faced "a long and tortuous slog back from the brink", adding it would take time to rebuild confidence.

"It's bought a little of that time today but if it can't win over the government, if it can't find its way back into the room, then it has no real value."

While the CBI claims to represent 190,000 firms, not all of these are direct members - the number of which is thought to be substantially smaller.

The lobby group works with trade associations which represent thousands of firms, such as the National Farmers' Union which has 50,000 members.

At Tuesday's vote, each member had one vote each regardless of size. That means that a trade association that might represent thousands of companies had one vote.

Although the CBI has won the backing of its remaining members, a recent exodus of fee-paying companies is already affecting the organisation.

And some - like Rolls-Royce - said its membership of the CBI remains on pause.

A spokesperson said: "We will monitor the implementation of the reforms detailed in the prospectus. In the meantime, our membership remains suspended."

The Recruitment and Employment Confederation (REC) said that while it voted on Tuesday to back the CBI, its membership also remained suspended.

REC chief executive Neil Carberry, said: "We hope the CBI succeeds in its change programme which must be transparent, and effectively deal with both supporting the victims of what happened and ensuring that doesn't happen again.

"Ultimately the CBI has to create a safe environment for all CBI staff to work especially for female colleagues."

The CBI recently said it would have to make job cuts in order to slash its wage bill by a third. In its most recent public accounts, for 2021, the CBI reported income of £25m, of which £22m came from membership fees.

That is expected to fall for the current financial year following the number of companies who have quit the lobby group or let their memberships lapse.

Ms Newton-Smith told the BBC: "We know we're going to come out of this a smaller organisation but [the vote] also gives us a really clear mandate to get out there and get new members to join our organisation. I want to work on all those members who maybe have left.

"We are proud of that conversation [that] now we have got a strong mandate from existing members and we're going to come out and focus on the really important issues of the day."

The CBI employs about 250 people in the UK and has offices overseas.