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Friday 5
All change
28 April, 2023
The Confederation of British Industry (CBI) is on life support.
This week its president, Brian McBride, published an open letter to its 190,000 members after weeks of revelations about its culture and the behaviour of senior staff.
The focus has, rightly, been on the corporate culture of the organisation and the role that has paid in creating a toxic workplace – something that is far away from what it would expect from any of its members.
Can the CBI survive? That is very much an open question. However, what seems to be overlooked in all the discussion is whether the CBI in its current form is even close to what business needs today.
The CBI was created in 1965. A time when the world of business was very different. Business needed a voice that spoke directly to government and one that had its interests at heart. And since at least the 1970s and the publication of Milton Friedman’s ‘shareholder primacy’ doctrine, those interests centered around the idea of shareholder capitalism.
But the world has moved on. The view of the shareholder as the only stakeholder a business needs to consider is being replaced. Stakeholder capitalism is becoming the driving force for long-term commercial success (even in the US with organisations like Business Roundtable).
Sure, it still makes sense to have an organisation that can represent the collective voice of business and help the private sector move forward. However, what that means in practice is totally different when the dialogue needs to be with multiple stakeholders (including businesses speaking to each other) and moving forward comes from delivering value in a more holistic way – a way that delivers profit and drives the economy, but also helps create a more equitable society and planet where we can all thrive.
Unless the CBI is ambitious in rethinking its role and how it operates, this will be an organisation that doesn’t make it out of hospital.
By David Lourie