The Institute of Directors (IoD) will appoint a new interim chair early this week as it tries to clean up the governance mess left by the resignations of its chair and two other board members.
The board will propose an interim chair from among the board’s existing members. The decision will then be ratified by the council, the 24-member body to which the board answers.
The business group’s chair Lady Barbara Judge was forced out at the end of last week after an internal investigation was leaked, revealing 41 allegations of misconduct, including claims of racism and bullying towards staff.
Judge, who resigned at the end of last week after being suspended, has said she did not receive a fair chance to defend herself against the allegations. Her three-year term at the top of the lobby group would have been up for renewal in May, when she could have sought an extension.
Judge’s allies, deputy chair Sir Ken Olisa and another board member, Arnold Wagner, also resigned from the board on Friday. Olisa has been heavily critical of the process followed by the IoD in ousting Judge.
The resignations leave only three non-executive members who have served much time on the IoD board – Chris Walton, Erica Ingham, and Suzy Walton – although the group hired two new directors just before the scandal erupted, meaning the board is still quorate. They serve along with the director general and finance director Jim Jordan.
Stephen Martin, the director general, last week said Judge’s resignation will mark a “new era” for the body, although City A.M. understands the group has not yet formally decided on a process to find the longer-term replacement for Judge.
The appointment of a new figurehead will be a vital step for the group at a time it is “haemorrhaging cash” and losing members, according to a letter from Olisa to the board seen by City A.M.
A former senior figure at the IoD said the new chair "needs to be a substantial and established business figure...They can't mess around for months going through the motions, they need to tap someone on the shoulder and offer it, a bit like Tony Hall's appointment when the BBC was in a similar crisis."
The source added: "They need a recently retired big figure with no governance baggage of their own. It will be a big job to persuade them, but not impossible."
Another former IoD employee added: "The appointment of a new chair could make or break the institution," and called the hunt for Judge's successor "the most important decision the IoD has faced in decades."