The new boss of the Confederation of British Industry has taken the reins at the influential trade body which has been shaken by allegations of widespread sexual harassment.

Rain Newton-Smith faces a battle to reform the group after many questioned the wisdom of appointing a CBI insider to the top job.

Technically she joined from Barclays where Ms Newton-Smith had been managing director for strategy and policy, sustainability and ESG.

But she only took that job last month. Before then she had served as the CBI’s chief economist for close to nine years.

So her appointment raised eyebrows, not least because the CBI itself admits that it mismanaged the culture inside the organisation.

While few questioned Ms Newton-Smith’s credentials, her status as a CBI insider caused murmurs among members.

Members did not directly criticise her appointment on the record, but speaking anonymously to reporters some said that appointing an insider so quickly was not likely to bring about the changes needed.

The decline of the CBI started in early March when the Guardian newspaper published accusations of misconduct against then director general Tony Danker.

A month later the newspaper published another article saying that more than a dozen women who worked for the CBI had approached it claiming they had been sexually harassed by colleagues.

One woman said that she had been raped.

Days later, after outside lawyers had concluded the first part of their report into the CBI, Mr Danker was fired and Ms Newton-Smith was announced as the new boss.

Mr Danker later hit out at the CBI, saying he was the “fall guy” and that his reputation had been “totally trashed.”

Members were already becoming concerned at this point, and the Government started to wind down its engagement with the lobby group.

But the final straw came last Friday when the Guardian published a second allegation of rape and a new allegation of stalking against CBI staff.

Within hours, Aviva, one of Britain’s biggest insurers, said it would cancel its membership of the CBI.

This opened the floodgates and by the end of the day dozens of the biggest companies in the UK, including Tesco and John Lewis, had walked away.

Later that evening the CBI decided to suspend all policy and membership activities.

Ms Newton-Smith now faced a tough task. On Monday, CBI president Brian McBride made a series of promises of reforms at the organisation.

The changes that will be made are set to be discussed in June at a meeting of the CBI membership.

“We have asked Rain Newton-Smith to be our director general, and she has shown great courage in accepting this position at a very difficult time,” Mr McBride said on Monday.

“Many of you know Rain personally, and have welcomed her return.

“We asked Rain to return to the CBI, not only because of her very considerable economic and policy expertise, but because the employees of the CBI deeply trust and respect her.

“Supported by others, Rain will lead the changes necessary at the CBI. I’m profoundly grateful to her for stepping up at this time.”