(Bloomberg) -- Big businesses are shunning a crucial meeting to decide the future of the Confederation of British Industry, the lobby group facing potential collapse amid a sexual assault scandal.
Companies such as BT Group Plc, PwC and Flutter Entertainment Plc — the FTSE 100 owner of PaddyPowerBetfair — will not take part in Tuesday’s vote, according to people familiar with the matter.
Dozens of the UK’s largest businesses suspended engagement with the group in the wake of a series of allegations from CBI staff, including two who said they were raped by colleagues. The CBI has said companies that suspended their memberships could take part in the vote, yet many are choosing to stay away.
Companies that quit the group entirely, including Natwest Group Plc and John Lewis Partnership Plc, were not invited to take part.
The CBI, under newly-appointed director-general Rain Newton-Smith, will announce the outcome on Tuesday, after outlining a reform program that it hopes can win back the support of business. The vote needs more than 50% to pass, with members receiving one vote each. If the majority vote “no” the CBI will be wound down.
Read More: Rape Claims Shake UK Political Titan in Warning to All Business
The organization, which lobbies government on behalf of business and claims to represent 190,000 firms, has told staff to expect job cuts as it has been forced to take “difficult decisions” after the wave of cancellations, said a CBI spokesperson. The majority of its £25 million ($31 million) annual income comes from membership fees. The CBI employs about 300 people.
German industrial giant Siemens AG is coordinating a letter among CBI members urging companies to back its survival. The letter, first reported by Sky News, said it was “vital that there is a credible voice representing all sectors and sizes of UK business.” Companies ranging from start-ups to big corporate names have been asked to support it and Microsoft Corp. is a signatory.
The letter, which has been seen by Bloomberg, said it was “essential”, that a refocused, and effective CBI re-established its ties with the UK government — and the signatories said they were “encouraged” by the efforts to repair the culture of the organization.
Carl Ennis, chief executive of Siemens, UK and Ireland, said the company would vote to give the CBI a mandate to continue. “We believe the UK needs an effective voice for business of all sizes and across different sectors.” A Microsoft UK spokesperson confirmed it was a signatory.
The UK government suspended engagement with the CBI in April. Chancellor of the Exchequer Jeremy Hunt said at a business event that month that there was “no point” in talking to the CBI while it is dealing with the allegations.
Members have been sent a prospectus outlining the CBI’s turnaround plan, while the CBI has appointed ethics consultancy Principia Advisory to help overhaul its operations. Fox Williams, the law firm, has been hired to investigate the allegations.
While a number of businesses have said they will not be attending, others are continuing to listen to the CBI’s plans. Diageo Plc will be sending a representative to the meeting, said a person familiar with the matter.
A spokesperson for the CBI declined to comment.
(Updates with details of a letter gathering support for group in seventh paragraph.)
©2023 Bloomberg L.P.
BNN Bloomberg Picks
One-third of Canadians unsure if they’re covered for climate risk
Artists are worried about AI. Here is why
What is it like to live in a converted office building?
Carbon tax, trade barriers: experts on how to reduce food costs
Variable rate mortgage holders on the hook for thousands in interest: report
Half of Canadians don't think they will be ever buy a home: survey