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The CBI has delayed its annual general meeting that was due to take place on Wednesday, the latest turn in the existential crisis engulfing Britain’s largest business lobby group.
The group had been hoping ahead of the AGM to secure £3mn of funding from bank loans and member contributions to tide itself through to the start of 2024, according to people familiar with the matter.
Instead, the CBI on Tuesday told members that it was suffering from “short-term cash flow challenges” stemming from the loss of corporate members after the group was hit by claims of sexual misconduct earlier this year.
The haemorrhaging of membership income in the wake of the claims has left the group fighting for its survival and teetering on the edge of collapse. Members that have left include Aviva, BP, Drax, KPMG, Tesco and NatWest.
“We are in positive dialogue over finalising financing options and are confident that we will be able to resolve this short-term issue and secure the footing of an organisation that remains in a strong medium to long term position,” the CBI told members.
“But given the significant interest in the CBI right now, we are opening-up and refocusing our previously planned AGM.”
CBI officials said that instead of a formal meeting that there would be “as full an update as possible” for members on Wednesday. It was not immediately clear whether Rain Newton-Smith, the current director-general, will present the group’s annual report and accounts.
One person close to the situation said the group had been close to raising the £3mn target figure but was still making calls to get the fundraising over the line. The person added that over half of the cash is expected to come from banks.
Under the CBI’s “revised supplemental charter”, if the organisation is wound up the members will be responsible for payments of the debts and liabilities of the group. That would be the case even if they had suspended their membership.
The CBI has been in discussions for months with engineering lobbying group Make UK about a potential merger.
However, the talks cannot conclude until the CBI had hived off its pension scheme, most likely through a deal with an insurance company, according to people close to the talks.
The sexual misconduct claims against the CBI, first published by the Guardian, included allegations of rape and a toxic work environment at the organisation.
Source: Financial Times