Normal service resumed? CBI boss tells corporate Britain she’s turned the page on scandal
CBI boss Rain Newton-Smith has described her return to the scandal-hit organisation as a “baptism of fire” – but told the country’s corporate leaders the body is back in business.
The Confederation of British Industry (CBI) director-general told Morning Wire overhauling the organisation’s culture had proved “challenging” but vowed: “It’s been great to be back.”
Sexual harassment allegations against her predecessor, Tony Danker, kicked off a wave of lurid and serious charges laid at the CBI’s door. Two women claimed to have been raped at CBI events.
Danker was eventually given the boot – he claims he was “thrown under the bus” – and the CBI’s tin-eared response to the (largely unproven, it must be said) allegations led to a host of members pulling their subscription fees.
Newton-Smith, meanwhile, had left the group after a nine-year stint for a senior ESG role at Barclays at the turn of the year.
Faced with the CBI’s existential crisis, though, the Oxford PPE-graduate stepped into the breach and insists the organisation is now “back doing its normal business”.
Speaking ahead of the Conservative and Labour Party conferences, she told Morning Wire “:I came back to lead because I’d seen the power of what we can do when we’re at our best.
“We love talking to policymakers about the issues of the day, travelling around the country, talking to businesses and understanding what’s on their minds.”
Re-engaging
Work to regain the trust of members, and continue to improve the organisation’s corporate culture is ongoing, but for now, her focus is firmly on the future.
Consultation at the top levels of Westminster and Whitehall has resumed, with a 30-page submission to the Treasury and Rachel Reeves’ office ahead of the autumn statement.
Her diary, she says, is filling up with meetings, from the German ambassador to the University of Exeter. She was in Number 10 last week with her economist successor, Louise Hellem, and is meeting Chancellor Jeremy Hunt and Labour leader Sir Keir Starmer in the coming weeks.
At Tory conference in Manchester this week, she will attend a private roundtable with City minister Andrew Griffith on growth.
It’s all welcome engagement, but that the CBI is having to boast about meetings previously seen as a birthright is a sign of how badly the reputation of the organisation was hit by the raft of allegations earlier this year.
What, then, does the CBI want to see from the government – whoever it may be?
“[Businesses] want to see certainty and a long term plan,” Newton-Smith said. “They want to see politicians put our economy front and centre, listen to their voices and a clear focus.”
Priorities include the UK being ambitious globally and an attractive international investment destination, including a “competitive tax regime”; and having “permanent capital allowances”.
The CBI, Newton-Smith says, has a full slate of policy ideas around the workforce and talent and wants to see “clear direction” from both government and the opposition.
‘Flip-flopping’
On Rishi Sunak’s recent rollback of net zero measures – grid connections aside – and ongoing speculation around the future of HS2, Newton-Smith was cautiously disapproving.
“Some of the messages, unfortunately, did signal that the UK is stepping back from net zero and that’s a real challenge because we’ve been such a huge leader internationally,” she said
“One area where businesses were really disappointed was what looks like a flip-flopping on the commitment to electric vehicles. It’s that mixed signal businesses find really challenging.”
While on HS2, she added: “The UK following through on some of the decisions that we have made is really important.
“Rail infrastructure plays such an important role in how we connect our big cities… we think it’s disappointing. We want the government to look again.”
They want to see politicians put our economy front and centre, listen to their voices and a clear focus
Rain Newton-Smith
‘On a journey’
But on the details of the CBI’s transformation, Newton-Smith was less clear, describing the work being done as “galvanising” and “rejuvenating” to “live and breathe our values every day”.
The organisation has worked with expert advisors on creating best practices to deal with sexual harassment and mental health, and now has “some of the best policies in place”.
Asked whether further complaints have been made, she dodges.
After creating those policies “what you should see is actually an increase in people raising issues because that’s what you want – you want people to be able to raise issues”
Has there been resistance to culture change? “Has it been challenging for all of us in the CBI? Of course it has, I came back to an organisation that has gone through a crisis.
“We’re in there and it’s in the full spotlight of the public eye and that is challenging.
“But I think we’ve shown we’re a really resilient organisation, we’re on a journey. I think every organisation does need to go on a journey on some of these issues. And I think there are things that we can share with the wider world.”
‘Undue scrutiny’
On the short-term funding plug the CBI recently received, Newton-Smith won’t go beyond pledging “our medium and long term position is really solid” or reveal the sources of finance.
“Like many SMEs, we faced pressure on our short term cash flow and we found a resolution to that,” she added.
Following the membership drain after the initial crisis, a core part of her work has been lobbying those firms to return, while recruiting for new businesses to sign up.
“We did lose some of our membership base, but since then, we’ve been building that back,” she said. The body has also taken a scythe to its personnel, making a raft of redundancies and kiboshing its international offices.
The CBI has always been close-lipped about its members – some 1,100 direct members and over 150 trade associations, Newton-Smith says – and it doesn’t sound like that’s about to change.
“Even as the crisis unfolded, a lot of our members came under a lot of pressure and scrutiny,” she said.
“We want to be able to go out and be their voice. But for them not to have to come under undue scrutiny right for being part of an organisation that we think is really important and plays a valuable role in our wider society as well.”
The CBI once claimed to be the voice of. business. A rebrand is planned, it has been reported, and certainly the political climate might once again prompt corporates to think about their lobbying activity.
Newton-Smith’s real challenge will be defining what a business trade body actually does in the twenty-first century. The jury remains out.