CBI to seek £3m from members within days to avoid financial collapse
The Confederation of British Industry (CBI) risks financial oblivion unless it can convince its remaining members to stump up £3m within the next few days, according to reports.
The scandal-hit business lobby group is in a race against time to stave off collapse, even as rival organisations jockey for position to replace it as the voice of British business.
It follows an exodus of the CBI’s members triggered by revelations about sexual misconduct – including two alleged rapes – which have shaken the organisation to its core.
Despite a clear-out of management, an internal investigation and a pledge to overhaul its culture, the reputational crisis has snowballed into a financial one as the CBI struggles to woo the companies whose membership fees provide most of its income.
The CBI has reportedly asked the companies that remain members to help patch up its balance sheet while it continues discussions about a potential merger with MakeUK, the manufacturers’ trade body.
Those talks have been complicated by questions over whether the CBI can find a buyer to take on its pension scheme, which would have to be hived off for the union to proceed.
Just days before its annual meeting, the CBI has asked its members for £3m to tide it over while it tries to secure its future, the Sunday Times reported.
The CBI’s accounts are usually presented at its annual meeting, scheduled for Wednesday, putting the organisation under pressure to come up with a plan to show that it can continue operating.
In a message to members before the meeting, the group promised to build a “renewed” CBI under the leadership of Rain Newton-Smith, who took over after former director-general Tony Danker was dismissed after separate allegations were made about his behaviour.
A spokesperson for the lobby group said: “As has been widely reported, the CBI has experienced some short-term cashflow challenges following an incredibly difficult year for the organisation.
“A number of options are being explored to resolve this issue and secure the footing of an organisation that remains in a strong medium- to long-term position.”
The bank HSBC is trying to convince other CBI members to back the £3m cash call, the Sunday Times has reported.
The board of the CBI, led by its president, Brian McBride, has been meeting regularly to assess its financial situation amid mounting speculation that the group could run out of cash imminently.
As the CBI fights for survival, a potential successor as the voice of British business is waiting in the wings.
The business council of the British Chambers of Commerce (BCC) was launched in June – with its stated aim being to “design and drive the future of the British economy” – just weeks after the CBI was plunged into crisis.
It held its first meeting at the House of Lords last week, chaired by the BCC’s president, Martha Lane Fox.