New director general Rain Newton-Smith faces a Herculean task to clean up CBI

It’s all change at the CBI with director general Tony Danker fired and Rain Newton-Smith appointed in his place in short order.

There was clearly no Easter break for the organisation’s board – as you might expect given the sexual misconduct scandal that has plunged Britain’s leading business group into an existential crisis.

It began when allegations of inappropriate conduct where made against Danker, who stepped aside while they were investigated by law firm Fox Williams.

However, a subsequent report in The Guardian suggested a much wider problem; a series of allegations were made against other senior figures up to an including the claim of a rape at a CBI party. None of them related to Danker, but the law firm’s remit was subsequently widened.

Danker’s dismissal came after the firm reported back to the board on the specific allegations made against him. In a statement, the CBI said the board concluded that his conduct “fell short of that expected of the director general”.

A series of tweets followed in which Danker professed himself “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”. He went on to argue that “many of the allegations against me have been distorted”. Danker did allow that he had “unintentionally made a number of colleagues feel uncomfortable”, for which he is “truly sorry”.

These statements were clearly worded with considerable care (after taking external advice? It wouldn’t be at all surprising). I am told that there will be no payoff for Danker, whose post came with a £375k a year salary plus a £75k pension contribution.

The CBI faces a situation in which its prominent members are openly questioning whether they want to continue working with it. The government has “paused” ties and others such as the governor of the Bank of England have followed suit. Its relatively progressive stance on some issues, including Brexit, has created some powerful enemies within a notably thin-skinned government that retains a vindictive streak; opponents have lost no time in weaponising the affair.

With all that being the case, Danker’s position was looking untenable even before the board acted; you can hardly be the “premier voice of British industry” if nobody wants to speak to you. Complicating matters for the CBI is that Danker, whose reputation has been badly damaged, might now feel he’s got nothing to lose by consulting his lawyers.

Ms Newton-Smith, who is expected to at her desk within a matter of weeks rather than months, is going to have a bulging inbox.

She is smart and well-regarded, the sort of person you’ll find it hard to find anyone saying a bad word about. Appointing her in this situation was unequivocally the right thing to do and the fact she’s likely able to take up the reins relatively quickly could prove useful in containing the impact of the scandal. She has previously worked for Oxford Economics, the Bank of England and the International Monetary Fund.

On the downside, while she is technically an external appointment, she is very much an insider having only recently left her role as the organisation’s chief economist to join Barclays as managing director for sustainability strategy and policy. It could be argued that the CBI really needs an outsider to come in and clean house.

There is an awful lot of cleaning to be done, on the level of Hercules’s Augean stables; the CBI rightly faces some hard questions.