CBI takes a big financial hit

The CBI has informed members it had slumped to an £8.3mn loss last year after a governance crisis and allegations of serious sexual misconduct against some staff caused members to flee, pushing the group close to collapse. Revenues fell 12.4 per cent to £20.6mn as the self-styled “voice of business” in the UK suffered the loss of subscriptions and commercial revenues after it was forced to suspend its events and other operations for several months.

The accounts for the year ended December 2023, sent to members on Tuesday, show the CBI spent £3mn on costs directly related to the crisis, including lawyers and consultants called in to respond to the allegations and overhaul its culture and governance. It spent £729,000 on severance payments as it axed staff to stave off collapse. It had an average of 255 staff in 2022 but the number was now about 160. The group could have stemmed losses more quickly by making more economics and policy experts redundant but judged that without them it would be less useful to corporate members.

The group lost about one-third of its members during the crisis but some have begun returning, including nine FTSE 100 groups. BT, National Grid, GSK, AstraZeneca, Schroders, Phoenix Group, KPMG, NatWest, Anglo-American and Centrica have all rejoined this year.   The organisation is focusing more on across the board issues rather than ones dealt with by sector specific trade associations.

The accounts included a warning from auditors over the CBI’s ability to continue as a going concern. It remains reliant on banks to fund its operations, but its lenders were aware of its financial modelling. Revenues would fall further in 2024 because many members had already paid their subscription fee for 2023 before quitting the group, meaning the financial impact would only be felt in 2024, he added. This further drop would be offset by lower legal, consultancy and redundancy costs in 2024, he said.

The CBI is confident it can survive in the long term, but ultimately there may be some rationalisation of business representation.