What does the CBI do and is it still relevant in modern politics?

With the sacking of director general Tony Danker, as an investigation takes place into allegations of sexual misconduct and inappropriate behaviour, the Confederation of British Industry (CBI) is facing the biggest crisis in its 58-year history. The probe has led to a “pause” in official contact with government departments – a serious predicament for a lobby group. Mr Danker will be replaced by Rain Newton-Smith, the organisation’s former chief economist.

Why did Tony Danker go?

The CBI has been rocked by allegations of a toxic workplace culture since Mr Danker was accused last month of allegedly making unwanted contact with a female employee. He agreed to step aside during an internal investigation conducted by law firm Fox Williams.

Further claims have since been made against CBI employees, according to The Guardian, which last month reported an allegation of rape at a party on a boat in the summer of 2019. Many of the most serious allegations pre-date Mr Danker’s time as director general.

The first part of the investigation has been completed, the CBI said on Tuesday. “Tony Danker is dismissed with immediate effect following the independent investigation into specific complaints of workplace misconduct against him,” it said. “The board wishes to make clear he is not the subject of any of the more recent allegations in The Guardian but has determined that his own conduct fell short of that expected of the director general.” The internal report that led to Mr Danker’s sacking has not been published “due to the legal confidentiality owed to all parties”.

Mr Danker expressed his “shock” at the outcome of the investigation. “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. 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.”

Will Mr Danker’s departure sort out the problem?

Three other employees have now been suspended pending further investigation, the CBI said on Tuesday. Given the serious nature of the newer allegations, Ms Newton-Smith will have to work hard to restore the reputation of the body.

“While investigations continue,” it said on Tuesday, “it is already clear to all of us that there have been serious failings in how we have acted as an organisation. We must do better, and we must be better. We apologise to the victims of this organisational failure, including those impacted by the revulsion we have all felt at hearing their stories. Nobody should feel unsafe in their workplace.”

The group will also launch a root-and-branch review of its culture, governance and processes, and create a new position of chief people officer. “We wish to thank all those who have had the courage to speak out, through internal or external channels, and encourage them to keep doing so,” it added.

What does the CBI do?

It is a confederation of trade, professional and industry bodies that, in turn, represent businesses of all sizes, covering everything from car makers and accountants to farmers and builders. “We speak for around 190,000 businesses who employ nearly 7 million people,” the CBI says. “That is one-third of private sector employees.”

CBI members are free to lobby on specialist concerns, but on wider issues, such as Brexit, trade deals and Budgets, they leave much of the political effort to the CBI itself. It also commissions research and surveys.

Decades ago, when Britain was run on a more corporatist model, much economic policy was formed through tripartite talks between the CBI, the TUC and governments. From the early 1960s until the arrival of Thatcher in 1979, targets for economic growth, investment, training, planning, wages and dividends would be discussed and sometimes even set in this manner. After the recession of the early 1980s, the CBI found itself openly at war with the government; later, a return to growth, union reforms, tax cuts, privatisation and the EU single market project gave rise to warmer relations. Conservative and New Labour governments prior to Brexit were committed to a “business-friendly environment”.

Since this corporatist heyday, the CBI and TUC have gradually declined in importance. In the CBI’s case this was greatly accelerated after Brexit; with many of its members deeply engaged in European trade, it was actively pro-EU, but when the argument was lost, so was some influence. Boris Johnson famously barked “F*** business” when an objection to his Brexit deal was made. Relations improved under Theresa May and her “industrial strategy” – an updated version of the old corporatism – but this seems to have been downgraded, along with other slogan-driven policies such as “levelling up” and “build back better”.

Is the CBI still relevant?

Not as much as it was, but the arrival of a Labour government with a more constructive attitude to the EU and an ambitious programme of green investment might improve matters. It is ironic that Labour, formally the party of organised workforces, has been more inclined than the Conservatives to listen to the CBI in recent times.

What is next?

Like the BBC and universities, the CBI is established through royal charter, and ultimately its existence is a matter for the privy council and the government. Whether it survives in its present form or is somehow reconstituted under a fresh name and charter, some sort of lobby group for big business will be needed to make the case in government for the sector’s legitimate interests. The British Chambers of Commerce, the Federation of Small Businesses, and Make UK (formerly the Engineering Employers’ Federation) don’t have the same heft on issues such as Brexit, employment law and corporate taxation. There will be a “voice of business” one way or another; whether the government listens is another matter.