What is the CBI? New boss says crisis-hit lobby group to be renamed

The scandal-hit Confederation of British Industry (CBI) will be renamed, its new boss has said, after sexual misconduct and rape allegations have left the lobby group fighting for survival.

Rain Newton-Smith, who took over as director general on Wednesday (April 26), promised “root and branch” reform, and said a rebranding of the CBI would be needed as part of attempts to rebuild trust.

“Personally, over time, I’m sure we’re going to see a new name for the CBI, but that’s just the wrapper that goes on the outside. What matters is what we do, what we deliver and our purpose,” Newton-Smith told the Financial Times.

More than 50 large businesses, including John Lewis and NatWest, have suspended their membership or cut ties with the group in the wake of the scandal.

Rain Newton-Smith took over from sacked boss Tony Danker, who said his “reputation has been completely destroyed” after being fired following complaints about his behaviour.

Three other CBI employees have also been suspended “pending further investigation into a number of ongoing allegations”.

In light of damaging claims of misconduct at the CBI from 2019, including alleged drug use and serious sexual assault, which are being investigated by City of London police, experts are now saying one of the UK’s largest business groups is completely finished.

Mr Danker responded to the claims made against him in a statement saying he was “mortified” for any offence or hurt caused and that it was unintentional. He was not part of the City of London Police investigation.

Even with a new boss at the helm, critics say the CBI will not recover from the scandal.

Taking over, she said: “I want to recognise the courage of the women who came forward and say how profoundly sorry I am for how our organisation let you down,” she said. “I hope to reward your bravery by finding a better path forward.”

But critics are still not convinced the organisation has a future, saying it is “finished”.

Well-known City fund manager Baroness Morrissey, a long-serving financier, told the BBC: “I’m sure she is wonderful in lots of respects but it doesn’t quite cut the mustard if you’re trying to show that you’re embracing a new approach to all of this.”

Asked if she thought the CBI was finished, she said: “I do, I’m afraid,” and added that the firm’s actions are “too little, too late”.

Since the original allegation, the Government has suspended its relationship with the CBI.

But what is the CBI, what are the claims against its former director general, and what firms have distanced themselves from the organisation?

What is the CBI?

The Confederation of British Industry (CBI) was established in 1965 and claims to represent more than 190,000 businesses across the UK. Members are companies as well as trade associations.

The CBI acts as a lobby group on behalf of its members and is the country’s largest organisation of its kind. It can seek to advise the British Government on issues affecting its members.

Its website says it has an “ambitious vision for the economy of the future”, and the desire to create a more carbon-neutral economy with levelling-up elements.

“We champion business so it can lead, not fear, the changes that are all around us,” its website says.

A CBI statement issued after the news of Mr Danker’s sacking said: “The CBI exists to help British business flourish. This is a privilege and responsibility which we take extremely seriously and cannot take for granted.

“We represent our members not just in how we advocate for them, but also through our values as an organisation. It means we must be a place where colleagues are safe, valued, and respected, and where there is zero tolerance for behaviour that falls short of those expectations.”

I recognise the intense publicity the CBI has suffered following the revelations of awful events that occurred before my time in office. I was appalled to learn about them for the first time last week...

— Tony Danker (@tonydanker) April 11, 2023

Who is Tony Danker and what is he accused of?

Northern Ireland-born and raised Mr Danker was a special adviser to Gordon Brown’s administration from 2008 to 2010. From 2010 to 2017, he held top board roles at the Guardian.

The CBI said concerns about him were raised in early March. It organised an independent investigation conducted by Fox Williams, an employment law specialist.

The BBC reported that the investigation concerned his conduct towards a female employee and other members of staff. However, it is thought his behaviour related to how he acted towards more than one person.

As a result of the investigation, he was fired without a redundancy package.

“Tony Danker [has been] dismissed with immediate effect following the independent investigation into specific complaints of workplace misconduct against him,” a statement read. It added that he was not subject to any of the further allegations reported in the Guardian.

His termination letter cited four reasons for his dismissal — for organising a secret karaoke party for 15 people, for viewing the Instagram accounts of CBI staff, for sending non-work-related messages to staff, and for inviting junior staff to breakfasts, lunches, or personal meetings.

“The CBI knew about all these things, and never once raised them with me as a disciplinary issue, until suddenly they all became grounds for immediate dismissal.

“I have been made the fall guy. Not only did they throw me under the bus, they reversed it back over me.” Danker told The Guardian.

He had previously said on Twitter that he was “shocked” at the allegations. He apologised for “unintentionally” making colleagues feel uncomfortable.

“I recognise the intense publicity the CBI has suffered following the revelations of awful events that occurred before my time in office,” he tweeted. “I was appalled to learn about them for the first time last week.

“I was nevertheless shocked to learn this morning that I had been dismissed from the CBI, instead of being invited to put my position forward as was originally confirmed. Many of the allegations against me have been distorted, but I recognise that I unintentionally made a number of colleagues feel uncomfortable and I am truly sorry about that. I want to wish my former CBI colleagues every success.”

Mr Danker said his name had been wrongly associated with an allegation of rape and other sexual assault claims that occured before he joined the CBI, claiming he had been made the “fall guy” by the lobbying group.

In his first interview since his dismissal, Mr Danker acknowledged that he had made some staff feel “very uncomfortable”, saying: “I apologise for that”.

But he told the BBC’s Today Programme last week: “I have had a week of coverage saying, ‘Tony Danker sacked in rape scandal’.

“And these stories have been about rape and sexual assault and cocaine and bullying — none of that was anything to do with me. And it was all before my time.

“It’s so clear — I’ve been made the fall guy. Not only did they throw me under the bus, they reversed the bus back over me… I feel I have to clear my name.”

The CBI’s chairman, Brian McBride, said Mr Danker was dismissed on strong legal grounds, telling the BBC that Mr Danker’s description of events was “selective” and he was free to seek “redress” if he felt unfairly treated.

What companies have quit the CBI?

So far, firms that have quit their relationship with the CBI include John Lewis, BMW, Virgin Media O2, NatWest, Mastercard; B&Q owner Kingfisher, ITV, the Association of British Insurers as well as Aviva, Zurich, the Phoenix Group and the British Insurance Brokers’ Association, Energy UK, investment firm Schroders, auditor EY, and Lloyds of London.

Companies that have suspended membership include GSK and AstraZeneca, Heathrow, major high-street retailers Tesco, Sainsbury’s, Asda, and M&S, Santander, PwC, the National Grid, Octopus Energy and Scottish Power, Diageo, Rolls Royce, British Land, Manpower, and BT.

Shell and BP are understood to have paused membership, according to the BBC.

Can a new director general save the CBI?

The CBI is facing a crisis and has acknowledged “serious failings” in how it has acted as an organisation. “We must do better, and we must be better,” the CBI statement said.

New head Rain Newton-Smith, the CBI’s former chief economist, is the second woman to take the role.

The CBI statement added: “We know it will take time for these steps to make a difference and rebuild trust. We will not hesitate to take any measures necessary in the meantime to act on further findings or complaints that arise from ongoing investigations.”

However, many have questioned whether someone who has worked at the CBI beforehand is the right person to head the organisation when it is reeling from so many damaging claims.

Commenting on Ms Newton-Smith’s appointment, the chief executive of the Chartered Management Institute, Ann Francke, said: “I’m not sure there was a huge amount of openness and transparency around the process and, obviously, you can question whether somebody who was there is the right change agent to change the culture.”

The Standard has contacted the CBI for comment.