Leadership
I t was the self-styled “voice of business” in the UK. sexual harassment, and misconduct were covered up by senior figures have left the organisation in crisis. In a bid to retain its position of influence, the CBI put forward a plan to redeem itself in the eyes of its members and the public. This included a promise to review company culture and refresh its board. The plan was approved by 97 per cent of those who voted at a meeting in June. Yet the result left unanswered questions. Just 371 votes were cast and the CBI did not disclose how many of its members were eligible to vote (while it represents 190,000 firms, many of those are affiliated via trade associations). There is no such ambiguity about the departure of several high-profile members. John Lewis, BMW, Virgin Media, O2, Aviva However, it is hard to see how the Confederation of British Industry (CBI) can continue to claim that lofty title. Allegations that rape,
health, increasing absenteeism, and causing silent withdrawal. There are financial implications for companies too, with some measures putting the
of the need for the organisation’s management to shift towards promoting lived values rather than “corporate bull”.
Finally, we often assume that board and leadership actions emerge from rational considerations, ignoring the
and Mastercard are among the big names who voted with their feet and left the organisation. They were followed out the door by Tony Danker, former director general of the CBI, while several senior figures were suspended. The City of London Police have also launched an investigation into the allegations. Meanwhile, a rival group from the British Chambers of Commerce – backed by firms such as BP and Heathrow Airport – has stepped forward to “design and drive the future of the British economy”. Can the CBI rebuild its reputation and regain its position of authority and influence? It faces an uphill struggle to do so. It is extremely difficult to reboot an organisation’s culture without altering its core beliefs and redesigning its governance power structures. This takes more than words. It requires a fundamental overhaul of internal power structures. Harassment happens when attitudes within an organisation uphold power differentials between individuals based on
their gender or other attributes. Institutions that perpetuate certain beliefs about gender stereotypes enable these systems, while powerful organisational actors maintain them. “Disparities such as the gender pay gap make sexual These systems help to deny and rationalise abuse, preventing it from surfacing. At the CBI, for example, alleged offenders were not sacked. Instead, its leadership tried to find a resolution before complaints of harassment became public. This response is not unique. Major institutions including the World Health Organization and Oxfam, and the aid sector more generally, reacted in similar ways. The #MeToo movement has shown that sexual harassment is systemic in many organisations. It is often deeply ingrained in company culture and characterised by pay and power inequalities. Research by the UK Equality and Human Rights Commission in 2020 found that 72 per cent of the UK population has experienced at least one form of sexual harassment in their lifetime – with 43 per cent experiencing this in the last 12 months. Money and power are interconnected, so disparities such as the gender pay gap make sexual harassment more likely. But harassment also lowers the earning capacity of those who experience it by worsening their mental harassment more likely”
role of unconscious bias and power dynamics that can better explain sexist and misogynistic culture. The CBI is governed by a president and an executive committee chaired by a director general, who also sits on the non-executive board. Outgoing president Brian McBride said he had lost the board’s confidence and admitted the organisation had “badly let down” its staff. Former director general Danker, who was sacked following the rape accusations for an unrelated reason, apologised in a BBC interview for making some staff feel “very uncomfortable”. Rain Newton-Smith, previously the lobby group’s chief economist, has returned as director general following a stint a Barclays. She must prove to members and the wider public that the CBI can overhaul its culture in order to survive. Ensuring that informal networks do not affect the organisation’s decision-making processes and accountability will be key. The leadership of the CBI – and other organisations like it – must consider points of view that have been neglected or hitherto unheard. Otherwise, they risk failing in their mission to build appropriate governance structures and a more equitable culture.
average cost at more than £18,000 in productivity per harassed person. The actual costs to society are likely to be much higher. The recent emphasis
on organisational culture reflects a shift across much of the Western world from the management of skills to the management of values. Employees’ commitment to their organisations can enhance firms’ performance by fostering innovation and creativity. But the focus is often on rituals, marketing slogans, and corporate image – the superficial elements that academic Edgar Schein called “visible artifacts”. Values are much harder to address. They are often unconscious assumptions about the world. As a result, culture change programmes may lead to superficial compliance, rather than the real commitment to the profound shifts that organisations like the CBI really need. Organisational culture cannot be easily measured or visibly altered to enhance performance or win support. Instead, it is a collective mental state that is in perpetual flux and must be constantly renegotiated by the organisation. US academics Caren Siehl and Joanne Martin called organisational culture “the glue that holds members of an organisation together by encouraging them to share patterns of meaning” or ways of understanding values, beliefs and how to behave. Some (female) leaders of former CBI member companies understood this when they spoke
Those wielding power in an organisation need to be truly committed to examining their own assumptions and values to achieve this. So how can they do it? Research on the effectiveness of boards shows corporate governance failures (even by companies with otherwise excellent governance records) happen when there is a separation between ownership and control of an organisation. Independent, non-executive directors can provide much-needed checks and balances to ensure that executive members represent the organisation’s interests, not just their own. However, their impact will be minimal if they merely ‘rubber stamp’ executive decisions. A lack of diversity in terms of age, gender, expertise, experience, or ethnicity on a board can lead to groupthink that promotes cohesion over accountability. Recruitment of certain types of men, while excluding women, and the development of informal networks among board members can also reinforce poor decision-making.
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Sustainable Development Goals
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