The survival of the Institute of Directors (IoD) is at stake over a governance crisis triggered by allegations about its chairman’s conduct, a board member has warned colleagues.
Sky News has been passed an email sent on Friday by Suzy Walton, a former civil servant who sits on the IoD’s board, which said that media coverage of its troubles was “dreadful, intrusive and points (correctly) at the problems we as an institute now face in order to survive”.
Ms Walton’s email to IoD directors was circulated as Lady Judge, the business group’s chairman, was being formally suspended from her role by the IoD’s governing council.
Lady Judge, whose term is due to expire in May, faces dozens of allegations about her behaviour and alleged use of racist and sexist language following a months-long investigation by Hill Dickinson, a law firm.
She is also said to have demonstrated bullying behaviour and used IoD resources to promote her private interests.
One source said it was possible that she would resign as soon as Friday afternoon, with a number of other board members also said to be considering their positions.
Ms Walton said in her email that there was a lack of clarity about who was now chairing the IoD following Lady Judge’s decision to step aside, prior to the announcement of her suspension.
“Council may be in the driving seat on the investigation and many other matters but it is us as board who remain legally accountable for the institute,” she wrote.
John Watson, another IoD board member, also cast doubt on the organisation’s handling of the crisis over Lady Judge, saying in an emailed response that he was “gravely concerned about our combined ability to lead the IoD’s staff, members and key stakeholders through this as we are”.
The IoD has said little officially about the crisis, but in a statement posted on its website, it confirmed that its council had met on Thursday afternoon: “The council took the decision, having received the Hill Dickinson executive summary, to suspend the IoD Chair pending further investigation into the matters raised and the process.”
The row has been complicated by the fact that Stephen Martin, the IoD’s director-general, was among those who made complaints against Lady Judge.
He is also accused of covertly recording a conversation in which Lady Judge made disparaging and discriminatory remarks.
The crisis is acutely embarrassing for the IoD, which hails itself as a bastion of corporate governance and frequently criticises major companies for failing to act in the best interests of stakeholders.
It is one of Britain’s most important business organisations, with tens of thousands of members and an influential voice on issues ranging from Brexit to skills and education.
However, its finances are said to be in a poor state amid suggestions that it may report a loss for the financial year.
The IoD did not respond to requests for comment.