Business leaders have warned the CBI faces an uncertain future after allegations of sexual misconduct and a toxic culture culminated in the sacking of its director-general, Tony Danker.

The business lobbying group, which represents over 700 major companies for fees as high as £50,000 a year, commissioned an internal investigation after an allegation of sexual harassment surrounding Mr Danker, 51, as well as reports of a toxic work environment.

He stepped aside in March after the CBI hired a law firm to investigate several complaints about him. These included a complaint from a female employee.

Mr Danker, who was dismissed with immediate effect and will not receive severance pay, said he was “shocked” by the sacking but acknowledged he had “unintentionally made a number of colleagues feel uncomfortable”.

The Government and opposition both suspended ties with the group after a series of sexual misconduct claims were revealed by The Guardian. Mr Danker is not the subject of these separate complaints, and many of the most serious allegations predate Mr Danker’s time as director-general.

But the distancing exacerbated what was already a huge reputational issue for the CBI, as members had grown concerned over the corporate culture and state of its reputation with ministers.

One executive told i: “The bleed will continue away from the CBI in coming years. They’ve called a lot of stuff wrong, have torched their relationship with Government and obviously have failed in terms of corporate culture given what has come out in The Guardian.

“We left three or four years ago due to it being tone deaf on a lot of political issues – it will be even harder for them to become relevant again.”

Another said that the appointment of Mr Danker had failed the CBI’s initial goal: to detoxify the lobby group following Brexit.

Mr Danker’s appointment was in part an attempt to clean the slate following a turbulent period with the Government. The lobby group had lost key access to meetings with Cabinet ministers in 2020 after criticising Government strategy. Weekly meetings had been paused, and the Government had begun to be openly critical of the group.

Relations with the Labour Party had also become tense – senior sources said they were still suspicious of the organisation after the CBI claimed that Labour’s renationalisation policies would cost £196bn, but refused to detail any workings because members did not feel “comfortable” publicising them.

In a statement yesterday, the CBI said the allegations raised in its investigation were “devastating” and said it “[apologised] to the victims of this organisational failure, including those impacted by the revulsion we have all felt at hearing their stories”.

Three other CBI employees have also been suspended “pending further investigation into a number of ongoing allegations”, the group said.

Mr Danker, who has been replaced by the CBI’s former chief economist, Rain Newton-Smith, said: “I recognise the intense publicity the CBI has suffered following the revelations of awful events that occurred before my time in office.

“I was appalled to learn about them for the first time last week. I was nevertheless shocked to learn this morning that I had been dismissed from the CBI, instead of being invited to put my position forward as was originally confirmed.

“Many of the allegations against me have been distorted, but I recognise that I unintentionally made a number of colleagues feel uncomfortable and I am truly sorry about that. I want to wish my former CBI colleagues every success.”

The findings of the investigation into him for now remain unpublished.

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