Proactive Investors - Britain’s largest business lobby group, The Confederation of British Industry, will face a critical vote among members on Tuesday, with a sour outcome likely spelling collapse.
Following a wave of sexual misconduct accusations, including two allegations of rape, voting at an extraordinary general meeting in London will determine whether members back proposed reform or if the 59-year-old organisation will be left to rot.
A vote against the CBI’s proposals to deliver a new mandate would all but force the group to wind up operations, a source close to the matter told Sky News last week.
The CBI represents around 190,000 British companies but paused operations in April after allegations of harassment and sexual misconduct toward some staff members, with former director-general Tony Danker sacked in March over inquiries into improper behaviour.
Siemens, Microsoft Corporation (NASDAQ:MSFT) and Esso were among members to publicly back the group in an open letter, while Rolls-Royce Holdings PLC (LON:RR) and BT Group PLC (LON:BT) have suspended subscriptions.
“Just how it will emerge from the crisis is far from clear, but demonstrating its relevance is going to be an even harder challenge,” Hargreaves Lansdown (LON:HRGV) analyst Susannah Streeter said.
“New director general Rain Newton-Smith will have to be highly skilled in the art of persuasion to keep the organisation alive.”
A rival Business Council appeared on the scene on Monday, launched by The British Chambers of Commerce and already boasting members BP PLC (LON:BP) and energy generator Drax Group (LON:DRX).
“With the new rival group also winning backing from large companies, a further fracturing of lobby group landscape lies ahead,” Streeter added.
Members have been asked to vote on the following proposal:
“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?”