BREAKING: CBI members back reform plan
Newsflash: The CBI says it has secured a strong mandate from its membership.
The business lobby group says that 93% of votes cast were in favour of its reform plan, out of 371 votes in total, with 23 abstentions/vote withheld.
The CBI says:
Reminder, the question was:
Do the changes we have made − and the commitments we have set out − to reform our governance, culture, and purpose give you the confidence you need to support the CBI?
Today’s extraordinary general meeting was called to decide the CBI’s fate after sexual misconduct allegations revealed by the Guardian, which led to several major companies to quit the CBI… and both the government and the opposition to suspend work with the group.
The CBI is speeding up its search for a new president, and plans a new-look board, to stop late-night parties, review its governance processes and set up a new board subcommittee on culture.
Key events
Summary
We’re now closing this blog down. Here’s our latest story from my colleague Joanna Partridge on the CBI vote:
The Confederation of British Industry (CBI) has said it has won a confidence vote put to its members after sexual misconduct allegations.
Britain’s most prominent business lobby group said on Tuesday a majority of its members had backed its proposals to overhaul its culture and governance, with 93% of votes cast in favour of continuing to support the CBI, while 7% were against. There were 371 votes in total with 23 abstentions/votes withheld.
In a poll which began last week and closed on Tuesday, the CBI asked its members to vote on the following motion: ‘Do the changes we have made − and the commitments we have set out − to reform our governance, culture, and purpose give you the confidence you need to support the CBI?’
Rain Newton-Smith, the CBI director general, said: ‘After an incredibly tough period, I’m deeply grateful for the faith shown in us by our members. We’ve made real progress in implementing the top-to-bottom programme of change promised by the board and, while there remains work to do, today’s result represents an important milestone on that journey.’
More than 50 of CBI’s highest-profile members, including the retailer John Lewis and banking group NatWest, left the organisation or suspended their membership in April, after the Guardian revealed a series of sexual misconduct allegations, prompting the government and the Labour party to suspend engagement with the body.
Businesses and trade associations that had suspended their membership, rather than terminated it, were still able to take part in the poll.
That article’s being updated as the story develops, so please check back for updates:
Jason Rodrigues
The Guardian covered the establishment of the Confederation of British Industry in 1965, reporting on the appointment of its first director-general John Davies.
The chairman of Shell-Mex and BP Ltd spoke confidently on taking up his new post at the CBI – an organisation set up to enable British industry to speak with one voice – on how industry and government were now “strongly intermeshed” and need each other’s assistance to progress.
The British Chambers of Commerce, which launched a rival business lobby group to the CBI on Monday, said it welcomed the result of the vote – but that a “range of voices” was needed to represent British businesses. Shevaun Haviland, its director general, said:
We are pleased to see the news that the CBI was successful in passing the vote to ensure its future at its extraordinary general meeting (EGM) this afternoon.
Given the challenges facing the UK economy, it is vital for the business community to have a diverse range of voices representing their concerns and priorities into government.
With the clock now ticking on the next general election, businesses must be confident that they have strong and effective representation. We recognise that the CBI still has work remaining in the weeks and months ahead, which will no doubt be challenging. However, we welcome the passing of the vote today and look forward to working with them again into the future.
Given the size of the CBI, and its claim to be the UK’s premier business organisation, the turnout in today’s referendum feels modest – at 371 votes in total, with 23 abstentions.
The Financial Times points out that the CBI did not disclose how many members had been eligible to vote, making it unclear how many CBI member companies and trade associations did not cast a vote at all.
Executive: Hard to see CBI regaining political credibility
Alex Lawson
One executive, who attended the CBI meeting, tells us:
“While they may have retained the confidence of their smaller members, they have lost the credibility with the very politicians their members need them to influence.
Ahead of such an important election, it is hard to see them regain their legitimacy.”
Ann Francke: Lessons must be learned from CBI’s sorry episode
The CBI may have won its vote of confidence from members, but businesses and government will now want to see clear evidence that the group is delivering on its promise to change, says Ann Francke OBE, CEO of the Chartered Management Institute.
Francke explains:
“While the CBI has won some much-needed breathing space, the difficult challenge of cultural transformation still lies ahead.
“Committees and consultants don’t transform organisations; leaders and managers do, through what they say and what they do each and every day.
“Both businesses and government will now want to see clear evidence that the CBI is delivering on its promise to change. A mandate from the members is not enough, on its own, for the CBI to believe it can draw a line under the management failures that led to the events of the last six months and move on.
“Leaders at all organisations should view this sorry episode at one of the country’s most high-profile bodies as a chance to learn from the mistakes of others and ask themselves if they need to revisit their own workplace to make sure they are getting their culture right.
“We wish the new team at CBI well as they embark on their ambitious transformation of building an inclusive and transparent leadership culture.”
Reminder: companies who quit the CBI after the lobby group was rocked by allegations of sexual abuse in April, such as Aviva, Natwest and BP, were not able to vote in today’s poll.
Breaking: CBI members vote in favour of confidence vote to support CBI.
93% of votes backed the motion;
7% of votes rejected the motion;
There were 371 votes in total with 23 abstentions/vote withheld.
Boss Rain Newton Smith says will “be the best voice for business inside &out”— Ashley Armstrong (@AArmstrong_says) June 6, 2023
Newton-Smith: it’s been an incredibly tough period
Rain Newton-Smith, the CBI’s new Director General, has welcomed today’s vote:
Newton-Smith, who was appointed DG in April following the dismissal of predecessor Tony Danker, says the CBI will “work tirelessly” to repay members’ faith.
Newson-Smith says:
“After an incredibly tough period, I’m deeply grateful for the faith shown in us by our members. We’ve made real progress in implementing the top-to-bottom programme of change promised by the board and, while there remains work to do, today’s result represents an important milestone on that journey.
“Even an organisation as established as the CBI is only as strong as its members. That support is something we have never taken for granted. We will work tirelessly to repay the faith shown in us and are committed to living the values and changes we have proposed.
“Let me be clear, we have listened, we have acted, and we will leave no stone unturned to be the best voice for business inside and out.
“We also heard another important message from members. That they want us to bring our breadth and depth of expertise, as well as our unique convening power, to bear on the economic challenges of the day.”
BREAKING: CBI members back reform plan
Newsflash: The CBI says it has secured a strong mandate from its membership.
The business lobby group says that 93% of votes cast were in favour of its reform plan, out of 371 votes in total, with 23 abstentions/vote withheld.
The CBI says:
Reminder, the question was:
Do the changes we have made − and the commitments we have set out − to reform our governance, culture, and purpose give you the confidence you need to support the CBI?
Today’s extraordinary general meeting was called to decide the CBI’s fate after sexual misconduct allegations revealed by the Guardian, which led to several major companies to quit the CBI… and both the government and the opposition to suspend work with the group.
The CBI is speeding up its search for a new president, and plans a new-look board, to stop late-night parties, review its governance processes and set up a new board subcommittee on culture.
Three company bosses have told Sky News’s Paul Kelso that they have backed the CBI’s reform plan, and expect it to be passed in today’s vote….
Voting on CBI confidence motion at EGM has now closed, with three
company bosses in the room saying they voted in favour of the reform plan & expect a majority to have done likewise. “You can’t throw the baby out with the bath water,” said one— Paul Kelso (@pkelso) June 6, 2023
CBI EGM breaking up now, one participant who voted in favour of confidence motion says there were no dissenting voices or negative questions from more than 600 participants online & in person, expects result to be a “strong yes”
— Paul Kelso (@pkelso) June 6, 2023
We could soon have a result on the CBI’s referendum on its future.
Votes have been submitted electronically, either virtually or by members who attended today’s meeting in person.
The result is expected between 4pm and 5pm today, once those votes have been independently counted and verified.
Sarah Butler
Elsewhere in business today, Marks & Spencer’s co-chief executives both took home more than £2m in pay last year as sales and profits jumped.
Stuart Machin earned £2.5m including a £1m bonus and Katie Bickerstaffe earned £2.25m after a £989,000 bonus.
Their bonuses reflected them achieving just over 77% of their financial targets even after directors discounted £20.5m of profits gained following the acquisition of the group’s food distribution partner Gist.
Both earned close to the figure earned by the group’s former boss Steve Rowe in his final year at the company. He was paid £156,012 in salary for his last months as a director and then a further £76,000 before exiting the company in July last year, according to the group’s annual report. M&S’s statutory pretax profits rose by 21% to £476m in the year to April while sales rose almost 10% to £12bn.
In the year ahead, both its chief executives will receive a 3% increase in basic salary so that Machin will earn a minimum of £922,000 and Bickerstaffe £811,000 for her four-day week. If they meet performance targets they could earn £5.7m and £5.2m respectively.
We hope to have the result of today’s CBI members vote, on whether they support the group following its reform efforts, within a couple of hours.
But, my colleague Nils Pratley writes, the outcome may not be clear…and could be open to interpretation.
Nils explains:
Why? Well, since several high-profile members – the likes of NatWest, the John Lewis Partnership and Aviva – have resigned, there is a slightly self-selecting flavour to the electorate. It has also been noticeable in the days since the CBI published its “prospectus for change” last week that corporate waverers – companies that “paused” or suspended membership – have not been publicly clamouring to get back into the fold. Maybe some are waiting for the meeting to make a splash or have returned without fanfare. But it’s odd that the top letter-writers to the Times in defence of a 58-year-old British business organisation have been the UK subsidiaries of three foreign firms: Siemens of Germany and Microsoft and ExxonMobil of the US.
To change the script, the CBI really needs a few domestic FTSE 100 heavyweights to pipe up. Thus, even when the result of the vote lands, it may be hard to tell the difference between a ringing endorsement by loyalists and a show of general apathy by UK plc. This is an unusual poll. It is as much about who doesn’t vote as who does.
So with the British Chambers of Commerce limbering up to take on the CBI’s role with a new Business Council, today’s vote at the CBI is probably not the end of the story….
More here:
World Bank: Poorest countries are biggest losers from economic shocks
Larry Elliott
Away from the CBI meeting….the world’s poorest countries are the biggest losers from a global economy failing to cope with the combined impact of the Covid pandemic, Russia’s invasion of Ukraine and the tough anti-inflationary measures taken by central banks, the World Bank has said.
In its half-yearly update, the Washington-based body said the international community was well off course to meet the UN’s 2030 anti-poverty development goals and warned of the risk of a fresh debt crisis for the most vulnerable countries.
The Bank said the global economy was struggling despite slightly revising up its 2023 growth forecasts and no longer fearing a second recession in the space of three years.
It said the upbeat news was already in the past and predicted a slowdown in the second half of the year as the impact of higher interest rates in rich countries rippled out to emerging and developing nations.
More here.
CBI director general Rain Newson-Smith ended her speech today by urging members to give the business lobby group their support.
She said:
We know you prize our ability to open doors to government and opposition parties.
The access we’ve given you for the last 60 years – to shape policy and regulation at the highest level.
You’ve told us you need to see that we can get back to that.
We can and we will. We just need your support.
In the last few days, I’ve had great conversations with members across the UK – where they’ve told us… yes. They do have confidence in us.
But the question now is – do you?
All of you gathered here today in person and watching online.
We’re ready to deliver a better CBI.
We just need one thing now – your vote.
We have been there for you in the past, now this is a moment when I and our talented teams at the CBI need you.
Thank you.
Joanna Partridge
One CBI member tells us that they estimated there were around 120 attendees at today’s meeting, which has now finished.
There were also plenty of CBI staff outside, and in offices watching the meeting on TV.
The atmosphere in the room was “fairly positive”, they add, with questions including when the CBI will reengage with the government.
They say it feels like the CBI will win the vote.
