Yahoo Finance Siemens and Microsoft launch last-ditch bid to save CBI as support drains away
Supporters of the CBI have launched a last-ditch bid to save the embattled business lobby group from collapse ahead of a crunch vote on its future.
Businesses with links to the organisation, including Siemens and Microsoft, have co-ordinated a show of support even as multiple blue-chip firms signalled they would refuse to endorse its turnaround effort.
A joint letter organised by Siemens calls for businesses to rally round the group in the run-up to the next election and says the CBI has taken steps to repair its shattered reputation after its culture “fell far below expectations”.
Juergen Maier, the former UK chief executive of Siemens, has previously sat on the CBI President’s committee. Microsoft’s UK chief Clare Barclay currently sits on the CBI board.
The intervention comes as it emerged that several major CBI members plan to abstain from Tuesday’s vote on whether to approve a plan designed to rehabilitate the group after a sexual misconduct scandal.
BT and PwC are among those who are likely to abstain from the vote. Both have suspended their membership, though they are still eligible to cast a ballot. Other companies that have ceased work with the organisation include Tesco and Sainsburys, while ITV and BP are set to let their memberships lapse.
The British Chamber of Commerce (BCC), a rival to the CBI, on Sunday night launched a new ‘Business Council’ to represent major corporations in an effort to appeal to businesses deserting the CBI.
Heathrow, Drax, IHG and BP have joined as founding members of the council. BCC chief Shevaun Haviland said: “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.”
A CBI source called the new council “very opportunistic”.
The CBI has asked its thousands of members to back a plan put forward by new director-general Rain Newton-Smith on how to reform itself. Proposals include overhauling the board and creating a new culture committee.
If it loses the vote, which requires a majority of members to support it, the 58-year-old organisation faces being wound down.
It is understood that there is no participation threshold for the vote, meaning abstentions will not affect the validity of the outcome.
Siemens decided to issue a public statement of support after a meeting on Friday in which its management decided to vote in favour of the proposals. It is believed to have done so without the CBI’s input.
Its letter, which has also been signed by executives including Esso chairman Paul Greenwood, says: “The allegations of rape and acknowledgment of other serious instances of misconduct at the CBI have been well reported; it is clear the culture of the organisation fell far below expectations.
“At a time when the UK economy is facing 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. The next 18 months will be vital for the UK and as a group, we feel that it is essential that a refocussed, effective, CBI re-establishes its ties with government and provides the voice that British business needs.”
Mr Maier, who ran Siemens UK for six years until 2019, served on the CBI’s president committee from 2016 until 2019. He held the position under former CBI chairman John Allan, who last month resigned as Tesco chairman following several allegations of inappropriate behaviour.
Mr Allan has denied the accusations, apart from admitting to making inappropriate comments about a CBI staff member in 2019.
The CBI, which is seen as the voice of British business, has been fighting for its future after a series of allegations of inappropriate behaviour and two claims of rape at its events.
The organisation suspended much of its activity in the wake of the revelations and thousands of members have quit or stopped engaging with it.
The freeze has sent the CBI into a financial crisis and it said last week it would have to make redundancies to cut its wage bill by a third. It has brought in lawyers to advise on a potential insolvency, something that could hinge on Tuesday’s vote.
It sacked its director-general Tony Danker in April after reports emerged of an inappropriate comment he had made to a member of staff.
Mr Danker has apologised for making people feel uncomfortable but argued he has been made a scapegoat. The Sunday Times reported Mr Danker is preparing to take legal action against the CBI.
Ms Newton-Smith, the organisation’s former chief economist, was drafted in by the CBI’s board to head the organisation at short notice.
Ms Newton-Smith told the BBC that the revelations had been “devastating” but that she was “absolutely determined” to lead the CBI through the crisis. She said Tuesday’s vote would be “nerve wracking” and urged members to back the proposals.
The letter’s existence was first reported by Sky News.
