Rain Newton-Smith surely thought long and hard about whether to accept the role of Director-General of the CBI. The invitation has ‘glass cliff’ written all over it. Chief among the items in her unenviable in-tray are restoring trust in the scandal-ridden business lobby and stopping the exodus of big employers that threatens to kill its funding.
These are not problems that will be solved by a superficial rebrand. Rain needs to reboot the organisation’s purpose, fast. Do we need an all-business lobby, companies are asking. What value does it add? Is it even relevant any more? If the CBI cannot answer these questions resoundingly and quickly, it will not recover.
I had a conversation about this with Douglas Board, one of ORESA’s advisers, author of Elites: can you rise to the top without losing your soul? and a visiting professor at the University of Chichester. We have a suggestion for Rain: own the moment. Embrace the ethical challenge and make it an opportunity to put good business at the heart of Britain’s premier business lobby, in language that doesn’t ring hollow.
Rebooting purpose is very hard. Rebooting it quickly – in a way which is equal to the existential crisis that the CBI faces – feels nearly impossible. Is that attempt worthwhile, when there’s no shortage of more specialised, agile competitors hungry to take its preeminent place, and without its baggage?
“Definitely,” says Douglas. “We’re in the middle of a reinvention of capitalism, a reconsideration of the purpose of business and its social licence to operate. It was only in 2019 that 181 CEOs, through the American Business Roundtable, renounced shareholder value maximisation as business’s overriding purpose. Anyone who thinks that the work of inventing what will replace it is done hasn’t been paying attention.
“At the same time society is reinventing the rights of different kinds of workers, the application of artificial intelligence has already started to create very difficult new questions, the climate threat is beyond red alert and politics is very unstable.
“The Institute of Directors, the Association of British Insurers, the British Retail Consortium and the like do many things well which the CBI shouldn’t replicate; but none of these organisations could credibly speak for business on issues which are society-wide and urgent.”
Individual businesses need a forum to reflect on their role in society, but to make a real change, the CBI can’t just be a mouthpiece voicing the consensus of its members. It needs to stand for something itself.
Much like the B Corp movement has given shape to the widespread desire in business to be a force for good, the CBI could act as a champion of its own bold vision for business and its role in society.
Reflecting on the Black Lives Matter protests, the contempt for women exposed by the FT at the Presidents Club in 2018, and the gross and fatal misjudgements that led to Grenfell, the Boeing 737 Max and the Post Office Horizon scandal, Douglas has a suggestion. Business should be about achieving extraordinary performance but in ways that put human beings front and centre.
“Ordinary lives matter. The CBI could do a lot worse than nail its colours to that mast. Achieving extraordinary performance encompasses the dynamism to which all businesses should aspire – growth companies certainly do – but places ordinary human life first. It also makes clear that good ESG governance can never be reduced to complying with codes, which (like the building cladding regulations in Grenfell) will always be out of date.”
Whatever purpose Rain and her colleagues decide on, the CBI cannot afford for it to be vague, grandiose or in denial about the gravity of current concerns.
We know the cycle too well: scandals happen, horror is expressed, someone says ‘never again’, and then nothing much changes.
Look at these words from 2020. “The killing of George Floyd was an electric shock to the business community … For example, [we] discovered a higher turnover rate of BAME staff. We’re also learning that investors and customers really care about this issue – 84% of UK adults expect UK businesses to act on equality … it can’t be a moment, it has to be a movement.”
Very eloquently put. But who said it? The then Director-General of the CBI, Dame Carolyn Fairbairn. Words and good intentions – even earnestly meant – only go so far.
For the CBI to survive and become something valuable again, its rebooted purpose needs to be lived out in its actions.
In a spirit of humility and, dare we say it, penitence, it needs to get its house in order. And then it needs to apply its principles and rebooted purpose to the world outside. It should build its research and lobbying activities around it, and could even go as far as refusing membership to those that don’t commit to it.
There will be a brief moment when this once-proud body can reclaim the agenda, but it won’t be easy. Given the necessity for business to find its purpose in a changing world, we hope it’s not an opportunity wasted.