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A year on from the CBI scandal

CBI director general Rain Newton-Smith (left) and interim CPO Elizabeth Wallace (right)
Rain Newton-Smith (left), the CBI's director general, and Elizabeth Wallace, interim CPO

Elizabeth Wallace, interim chief people officer, was given a year to rescue the CBI from a sexual misconduct crisis. In this exclusive interview, Millicent Machell finds out how she used HR to drive big changes.

In March 2023, the Confederation of British Industry (CBI) was hit by scandal. The Guardian reported several shocking claims of sexual misconduct inside the organisation, including harassment, stalking and rape.

In response, the CBI commissioned a report from Fox Williams, a law firm, which made 35 recommendations. Many of the recommendations focused on strengthening HR’s remit.

In response, the CBI appointed Elizabeth Wallace as interim chief people officer (CPO), a move that was one of many “decisive steps to rebuild trust in the CBI’s culture and purpose”, according to the company website.

“I came in about a month after the allegations came out in the headlines,” says Wallace, “and I think shock would probably be the very first thing I saw. People internally didn’t recognise what was being written about them in the headlines.”

Read more: Behind the scenes at the CBI: Exclusive interview

Empowering HR
Wallace’s task – to overhaul the CBI’s culture – was no easy one, and it was important that she had the power to manifest real change.

Historically, HR in the CBI had sat under finance, which reported to the CEO, and from there reported to the board. After the scandal, HR was given a seat on the leadership team, and its own subcommittee of the board.

Wallace says: “People and culture have to be as important as, for example, understanding finances. We now have a People and Culture subcommittee of the board that I report through every time there’s a board meeting. We go through people-related matters, like reporting trends or other things the board might want to get some advice on, and then we go into the board meeting.”

Wallace also has a very close working relationship with director general Rain Newton-Smith. Newton-Smith says: “Elizabeth keeps me honest in the sense that she’s part of my leadership team, and we meet as frequently as I do with our chief economist or our head of policy.

“Each of us as leaders has to think about the culture and our people in all the decisions we make. An HR professional brings that expertise to the table, and is also a voice for our staff.”

This representation at board level is especially important seeing as the Fox Williams report found that, within the CBI, though HR was ‘respected and trusted’ by junior staff, that respect and trust needed to be mirrored by the executive committee and senior managers.

Read more: CBI sexual misconduct scandal comes as no surprise to HR professionals

The CBI’s HR team has now included senior leadership in training materials, further underlining ever-closer collaboration. This sends a message that culture is everyone’s responsibility, adds Newton-Smith, and encourages managers to be involved.

“When we implemented training for managers, our own staff appeared in some of the videos,” she explains. “So it’s our economist, or tax professional, or head of public affairs, who say, for example: ‘This is how you raise a grievance.’ That creates another level of involvement and authority.”

HR is now at the forefront of internal communications, which Wallace says builds trust in their ability to make real change. “Making sure you’re one of the first people to speak in the townhall, and that you’re seen to be listening and handling problems, is one of the small things that make a really big difference.

“It’s about being as you can be in those discussions, and presenting back to people. We do employee opinion surveys every quarter, and we make sure to report back and say: ‘Here are the things you wanted to see changed. We listened. We discussed it with the board. And we did this.’

“Through actions like these, people start to trust HR more. They start to see you in a more senior way.”

Sexual harassment policies
Following the scandal, the CBI’s HR team reviewed every people-related policy they had. Wallace says: “We looked at our code of conduct, and also the external code of conduct, and completely revamped that in light of the allegations.

“We tried to ask questions like: ‘what do we expect when you’re at meetings with members or you’re at events with members, and there are people from the public there? If something happened, what would we do about that internally?’”

There was also a focus on increasing accessibility of resources and sexual harassment policies that the CBI already had in place. “I wouldn’t say this was an organisation that was missing loads of things,” Wallace says, “but they weren’t embedded in the organisation.

“We had hundreds of policies but no employee handbook, for example. It was a little tricky to find all these policies. They weren’t in one place.”

Most of the allegations reported by The Guardian involved managers’ behaviour to staff junior to them, as reflected by Wallace’s emphasis on manager training. “We had a lot of managers who were trained really well, and some who were not. We needed to make training mandatory, as it wasn’t as compulsory as we would have liked.

“People made excuses not to go to training when they should, so we overhauled the whole process, looked at everything that we do, and which cohorts we really needed to focus on. We now have someone who, if there aren’t 95% of the people in the room that are meant to be there, will knock on doors and ask managers why they aren’t attending, which is brilliant.”

Wallace says that reporting incidents is easier than ever. A new app enables potential whistleblowers to remain anonymous if they want to.

According to Wallace, there haven’t been any internal reports of sexual harassment since these new processes have been in place. She says: “Most of the things we’ve investigated was business-as-usual stuff, like disagreements between two people, but nothing in relation to any of the allegations that came out.”

Looking forwards
Wallace’s time as interim CPO is almost up. A new CPO was set to be appointed at the end of March.

Although the new CPO is also a woman, Newton-Smith says that wasn’t a requirement for the role. “We just wanted someone who was excited about the mission of the CBI and also excited about the next phase of our journey,” she says.

“I’m personally grateful for everything that Elizabeth has done to get us to this point. But we’re also looking forward to the next phase of our journey.”

Going forward, the CBI will continue regular pulse checks and meet every six weeks with its external culture advisory committee, which includes the CEO of the mental health charity Mind, the CEO of the Institute of Ethics and the CEO of the Survivors Trust, which Wallace says “keeps [the CBI] honest”.

Both Wallace and Newton-Smith are determined that the CBI’s efforts to improve culture will continue. Wallace says: “We’ve done a lot of really exciting work but now we need to make sure that continues to be embedded.

“Sometimes, it takes a different person to lead through the aftermath of a crisis to the person it takes for the next phase of that. So now feels like the right time to leave.”


This article was published in the March/April 2024 edition of HR magazine.

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