Scandal-hit business group will survive, says new boss

Scandal-hit business group will survive, says new boss
Rupert Soames, new head of the CBI

The new head of the CBI has said there is “jeopardy” over whether it can survive, after allegations of rape and sexual assault hit the business group last year.

Dozens of its members including John Lewis and BMW quit the group following the claims.

The group settled legal action brought by its former boss Tony Danker for wrongful dismissal on Monday.

Rupert Soames told the BBC that the CBI still had an important role to play.

In his first broadcast interview, Mr Soames admitted to concerns around whether the 60-year-old lobbying group could survive the “reputational disaster” which has seen dozens of its high-profile members leave.

Companies including John Lewis, Tesco, Aviva and Jaguar Land Rover quit their membership after a series of scandals involving allegations of sexual harassment, rape and drug taking rocked the organisation which tries to promote best practice within business.

On Monday, the CBI said it had settled a case for wrongful dismissal brought by Mr Danker, its former director general.

Mr Danker was sacked with immediate effect in 2023 following complaints about his behaviour, despite the lobbying group clarifying Mr Danker was completely unconnected to the most serious allegations.

In his first broadcast interview, Mr Soames – former CEO of Serco and current chair of Smith and Nephew – insisted the CBI still had an important role to play as an advocate of business interests.

“I think that people have found that life without the CBI has left something missing,” Mr Soames said.

He claimed the CBI was instrumental in securing Treasury tax breaks for businesses that invest heavily in the UK, as well as helping to sway the government into offering extra free childcare in England in the Autumn Statement.

Of 270 members who had resigned or paused their membership, 80% had said they would consider reengaging, he added.

But not everyone agrees. One former member told the BBC it wouldn’t re-join, and said: “It has been effectively absent from UK civic life for a year and what have we missed? Nothing.”

The exodus of some of its deepest-pocketed members plunged the group into a financial crisis that resulted in it cutting one third of its 300 staff, closing overseas offices and having to arrange emergency financing last year.

Mr Soames admitted that there was still some doubt as to whether the group could survive this, as it has to refinance its bank debt in autumn of this year.

“We are essentially an SME.

“We were grateful that a number of banks agreed to finance us, but like many other businesses we are here at the pleasure of our lenders.

“There is jeopardy in anything you do in life.

“We have to cut our cloth according to our means.”

The voice of business has had a fractious relationship with the Conservative government over the last decade. Former PM Boris Johnson famously used an expletive when asked about business concerns during the Brexit negotiations.

At the depths of the CBI’s crisis last April, Chancellor Jeremy Hunt said there was “no point in talking to the CBI if its members aren’t talking to it”.

Relations have since thawed, with the chancellor attending a slimmed-down CBI conference last November.

However, Mr Soames believes both parties now understand the CBI’s importance.

“We notice a position that probably hasn’t been true since Tony Blair first ran for office, where you have both the Conservative and Labour Party explicitly recognising the importance of business in getting growth going,” Mr Soames said.

There are myriad other business groups, many of which are more specialised to the needs of their members – the SMMT for cars, Hospitality UK, UK Finance, Make UK for manufacturers.

But Mr Soames insisted that if the CBI didn’t exist it would still be necessary to invent it.

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By David Ryckman