CBI reveals overhaul
The business news that matters
Hello everyone and welcome to the latest edition of Off to Lunch…
The CBI has revealed plans to overhaul itself as Britain’s biggest business lobby group battles for survival ahead of a key vote next week.
The CBI has been in crisis since The Guardian reported on misconduct allegations by staff. This included two allegations of rape, which are now being investigated by the police.
Since the allegations emerged the CBI has suspended all its activities. At an emergency general meeting next Tuesday members will vote on whether they have confidence in the organisation, effectively a vote on whether they approve of the reform proposals laid out today and whether they will continue to be members of the organisation. About a quarter of the CBI’s members have left or suspended links with the organisation since the scandal began.
The CBI has been a key link between the business world and the government - raising concerns with MPs and pushing for certain policies. It has also tried to represent and promote businesses to the public more broadly, as well as represent and promote UK plc around the world.
The reforms that the CBI has announced today include:
-Recruiting a new president next year after current president Brian McBride has overseen the internal changes
-The appointment of at least four new non-executive directors
-More frequent board meetings
-Board members standing for re-election every year
-The creation of a new people and culture sub-committee and the appointment of a new chair for the audit and risk committee
The CBI has said it will implement 34 recommendations made to the organisation by law firm Fox Williams after it was hired to investigate the allegations and the culture at the CBI. The consultancy firm Principia has also been hired to help the CBI and review its internal culture. The CBI has provided a summary of what Principia found about the organisation. This includes some interesting conclusions:
Through this process, Principia have determined that the CBI has an outward-facing culture that exhibits significant strengths – a strong external identity and purpose that staff understand and find motivational.
However, the CBI has under-attended to developing a strong, values-based organisational culture and has under-prioritised people management skills.
Whilst Principia do not find that blanket descriptions such as ‘toxic’ or ‘misogynistic’ are accurate or useful descriptions of CBI culture, attitudes towards culture are inconsistent, with a lack of awareness of different experiences and limited self-reflection.
This results in an under-developed and inconsistent organisational environment, with unclear expectations for behaviours and ways of holding people to account. Many staff do not feel confident speaking up when they experience or observe misconduct, with a lack of clarity around processes, concerns around challenging people in positions of authority or speaking in contrast to the CBI’s strong external identity.
You can more details on the CBI’s proposals in a prospectus it has published here. McBride, the current chairman, says at the start of the document:
“Whilst striving to represent and support our members to the highest standards, we simultaneously underestimated the daily effort required to maintain a great culture and the operational excellence of a growing CBI. The consequences of that failure, you already know. We share a deep sense of responsibility to put things right, so that we can continue to support you through the vital representation that the CBI provides. This prospectus will tell you how the CBI has changed and is continuing to change, in order to do that.”
The CBI says it has also reviewed what it actually does and stands for. This included speaking to about 1,000 members about the purpose of the CBI. The review found that members broadly value the CBI’s political lobbying and how it promotes long-term economic growth in the UK. Interestingly though, members want the CBI to “prioritise more, amplify SME and regional voices better and maximise the impact of our Trade Association network”.
The CBI has laid out some proposals to make its approach more transparent - ie explaining why it is focusing on certain campaigns or topics. This is interesting because the organisation has been criticised in the past for focusing on campaigns that support the interests of big businesses that pay big membership fees to the CBI. The CBI said:
We will be transparent in our decision-making, including the campaigns we choose to focus on, areas we submit policy consultation responses to, or issues we speak out on.
We will be democratic in defining our positions, through how we gather member insights and feedback and how we consult. We will ensure all members have opportunities to have their voice heard and know the impact that their engagement has had.
We will be evidence- led and focused in our work, ensuring our advocacy is rigorous, factual and plays to our analytical strengths. Where there are nuances across the business community, we will surface these, working closely with our Trade Association network to ensure different perspectives are understood.
The key date for the CBI is now the vote next week.
Other stories that matter…
1. British consumers are buying more own-label goods, reading books and looking forward to their summer holidays. That is according to trading updates published today from a collection of listed companies. B&M European Value Retail, the owner of discount chain B&M and Heron Foods posted a 31 per cent rise in annual revenues to £5 billion for the year to March 25, with pre-tax profits dipping 17 per cent to £436 million. Alejandro Russo, chief executive, said: “We are actively responding to the short-term pressure on consumers from the cost-of-living crisis, with a relentless focus on price and value.” Shares in B&M are up 8 per cent following the results, valuing the company at more than £5 billion. B&M has dramatically outperformed the FTSE 100 since it floated…
Meanwhile, book publisher Bloomsbury has said that annual sales rose by 15 per cent and pre-tax profits by 16 per cent in the year to February 28. Nigel Newton, chief executive, said: “In challenging economic times, readers are turning to books as affordable as they cut back on more expensive forms of diversion.” WH Smith said that sales in its travel shops are up by 31 per cent year-on-year as people travel again following the Covid-19 crisis.
2. The Financial Times has a story that Ben Houchen, the mayor of Tees Valley, privately struck a deal with Hartlepool council to take control of properties in the centre of the town. The properties are part of proposals to regenerate Hartlepool. The story raises more questions about the governance of Houchen’s administration. Full story here.
3. The number of electric vehicles on UK roads is dramatically outpacing the number of public charging points according to a story by The Times which is based on research by the Society of Motor Manufacturers and Traders. In the north-west of England there was just one charging point for every 85 electric vehicles at the end of 2022. That is the worst ratio in the country. In London it was one to 11 - by far the best ratio. Other areas with a big ratio were the south-west, where it was one to 78, the south-east not including London, where it was one to 66, and Yorkshire and Humber, where it was one-to-61. Full story and graphics here
4. The British population is getting older, with other countries in the western world seeing a similar trend. According to a feature in The Economist this is a problem for innovation, because ageing economies innovate less. This is another example of why changing demographics is going to be such a big economic and political issue in the coming years. Piece here.
5. The owners of Southampton football club have done an exclusive interview with The Times after the team were relegated from the Premier League. It’s commendable that they have fronted-up and it’s a rare opportunity to get some insight into why organisations fail. Rasmus Ankersen, one of the owners, was considered a forward-thinking and innovative executive before Southampton’s troubles. He was a key person in Brentford’s rise to the Premier League and has written books. “We were not close enough to understand what was really going on,” Ankersen says. Full interview here
And finally…
I am just back from a short trip to Ireland and there are two recent series that I wanted to flag that cover the history of the UK and Ireland. This is a history that many in the UK do not know much about because it is not taught in schools, despite the fact it defines the borders of the country. The Rest is History podcast makes this point at the start of a new series it has launched this week about Anglo-Irish history. You can listen via the link below…
Secondly, the BBC has a documentary series called Once Upon a Time in Northern Ireland, which speaks to those who lived through the Troubles. All episodes of that superb series are available on iPlayer here.
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Best
Graham