The Confederation of British Industry has said it is suffering a “considerable level of financial stress” and there remains “material uncertainty” that it can continue operating in the long term after sexual misconduct allegations.
The scandal-hit business lobby group said it was “emerging from an unprecedented situation” that had led to “exceptional costs”, warning there was also “material uncertainty arising from the CBI’s financial performance since the year end”.
The CBI released the warning in its annual accounts published on Monday ahead of its annual general meeting on Wednesday. The AGM had been scheduled to take place in September but was postponed the day before it was due to take place.
The lobby group, which was rocked by multiple allegations of sexual misconduct revealed by the Guardian in April, said it had only been able to survive financially “through the backing of key members, the use of reserves, support from creditors and with bank financing”.
That emergency funding is due to “terminate on 30 September 2024” and the board said it intended to “look to renew the facility if required”. It said it had now paid the exceptional costs caused by the scandal and “the organisation has been reshaped so that salary costs are appropriate given the expected level of income”.
“However, it is clear that the CBI is emerging from an unprecedented situation,” it continued. “Future projections have been made with the best information at the time of writing, but given the situation there will always be some uncertainty about future income until the CBI has settled back into a recognisable pattern of membership income.”
Since the Guardian revelations, nearly 100 British companies have paused or suspended their membership, including the carmakers BMW, Ford and Jaguar Land Rover; the supermarkets Tesco and Sainsbury’s; the asset managers Aviva, Fidelity and Schroders; the US banks Goldman Sachs and JP Morgan; and the oil companies Shell and BP.
The government and the Labour party had paused contact with the organisation, hampering its ability to lobby on behalf of businesses, although communications have now resumed.
The CBI has asked members to vote for a 5% increase in its fees as part of the resolutions at Wednesday’s meeting.
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