The Confederation of British Industry, once regarded as the UK’s most influential business lobby group, has cancelled its annual general meeting at the last minute citing cashflow problems.
Due to take place on Wednesday, the AGM has been replaced with “an audience with” CBI’s director general, Rain Newton-Smith, and its president, Brian McBride. The event will be broadcast online to members who sign up to watch.
Some members said they were troubled by the decision to switch format, announced in a statement on Tuesday, which also confirmed the organisation was experiencing “short-term” cash issues.
The body, which relies on membership fees, told staff it needed to slash its salary bill by a third in June after an exodus of members in the wake of sexual misconduct allegations revealed by the Guardian.
At present, the CBI is nearly £3m short of meeting its financial obligations from mid-October onward, according to sources familiar with its financial position. This leaves a months-long gap before it can expect its next wave of membership fees from its remaining members in January next year.
An AGM is traditionally when an organisation would present its financial position and update stakeholders – in the CBI’s case its paying members – on its strategy for the year ahead.
But the group was now unable to do this, as its board is not content to sign off the organisation’s finances as a going concern this week, sources told the Guardian.
The financial problems have not stopped the body advertising for new staff, however, months after a wave of employees were made redundant. Jobs site LinkedIn shows advertisements posted within the past week for several roles at the CBI covering public affairs, communications and campaigns.
In a statement on cancelling the AGM and the cashflow issues, a spokesperson for the group said: “At the CBI, we’re serious about our commitment to you, to be more accountable and transparent in our decision-making and work. As has been reported, the CBI has experienced some short-term cashflow challenges.
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“To reassure members, 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. But given the significant interest in the CBI right now, we are opening up and refocusing our previously planned AGM.”
