CBI in crisis – a governance failure – and why members shouldn’t walk away

As the future of the UK’s leading business organisation hangs in the balance over allegations of sexual harassment and rape, commentators are predicting the Confederation of British Industry’s imminent and permanent demise and members are voting with their feet and making for the hills.

Couple of thoughts – one about the Board and one about the members.

In the midst of the unfolding crisis, present and former members of the CBI Board have been publicly hand-wringing and expressing their surprise and revulsion at the reports of a massively dysfunctional toxic culture. Former President, Paul Drechsler said in the Guardian: “It came out of the blue,” he said. “I’m devastated.”

He added: “I’ve been around business for 40 years, all sorts of organisations around the world. I spent a lot of time at this organisation and I didn’t see anything even remotely close to this kind of stuff.” He said he had no indication of any allegation of sexual misconduct at the organisation or any failings in its oversight while working as president, an unpaid role. 

Commission or omission?

Strangely, I had always thought the central responsibility of a Board was oversight and governance. Their job is making sure the strategy is right and that they have the best executive team. They must also ensure the place is run honestly and respectfully, and hold management to account on – among other things – risk management, business ethics and culture. Given those obligations, in simple terms, the CBI Board failed, either through commission or omission:

  • Commission: It knew there were indications of a toxic culture – and didn’t do anything about it.
  • Omission: It didn’t know there were indications of a toxic culture – but it should have done.

The current President of the CBI, Brian McBride, has admitted the organisation was ‘complacent’ . It’s a word that covers a multitude of sins. The sin of thinking nothing can happen here, we are above that grubby sort of stuff; and the related sin of not bothering to look for trouble.

If Boards don’t have the systems and processes to ensure they get a clear view under the skin of the organisation, then they are not doing their jobs. I bet the Board knew the inflow of cash from subscriptions and the outflow for salaries and expenses – to the penny. They expect systems and process in the organisation provide a clear picture for them.

A lesson for Boards will be to ensure they have a robust process for looking into the dark corners of an organisation, because if they don’t, those dirty, dark secrets will consume them. Their and the organisation’s reputation will be shattered in a matter of days.

Members, too, have a corporate responsibility

And for CBI members – a brief question. Do you want the CBI to survive this crisis or is it too toxic and in terminal decline?

If your calculation is that it’s shortly to join the Dodo, walking away removes your hazard of association.

But regardless of the toxicity of the CBI brand, there is unfinished business here and a broader corporate responsibility for the membership. There are staff whose trust in the organisation has been fundamentally shaken and who themselves need support. They also rely on their jobs at the CBI paying them a salary so they can live a decent life.

Wholesale member resignations will likely throw staff onto the dole, which is hardly compensation for working hard and surviving a toxic culture and institutional meltdown. So, if members really do want to support the staff and believe in the CBI’s core mission, they must logically pitch-in and make a contribution to fixing it or reinventing it.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Create a website or blog at WordPress.com