The report on the collapse of BHS pulled no punches this week, but the focus now must be on what we can learn and what needs to change to ensure this never happens again.
The inquiry turned into a blame game. Frank Field MP, chair of the work and pensions select committee, clearly held Sir Philip Green responsible, while Green pointed the finger at the most recent owner of BHS, Dominic Chappell. Chappell, in turn, blamed Green.
As the report concludes: “Witnesses appeared to harbour the misconception that they could be absolved from responsibility by blaming others.”
The inquiry has been retail’s soap opera, allowing us a fascinating insight into the characters – and egos – of the individuals involved.
But let us not forget that up to 11,000 people are facing redundancy, while another 20,000 are anxiously waiting to find out what will happen to their pensions. Something must be done to avoid a repeat of this in the future.
It’s time to get tough on the leaders and owners of companies that fail
Yes, the report seeks to hold those individuals accountable for their actions, but what are the consequences? They may been pulled in front of the headmaster, but they have been given no more than a slap on the wrist.
The UK Corporate Governance Code sets standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders – but it doesn’t apply to private companies. The last thing retailers want or need is more red tape, but privately owned firms must feel the same weight of responsibility as their public counterparts.
As Field pointed out to Drapers at the beginning of this week, the publication of this report was timely, as the new prime minister, Theresa May, has already made clear her intention to “get tough on irresponsible behaviour in big business”. It is an opportunity to look at what changes need to be made to ensure everything is put in place to future-proof businesses and protect workers. It’s time to get tough on the leaders and owners of companies that fail.
It is complicated, of course, but we must urge the business, innovation and skills select committee to keep its promise and return to this issue, to investigate what further action could be considered. Private companies must be more transparent and subject to greater scrutiny, particularly when they are responsible for employing thousands of staff.
As the final BHS stores close, let’s keep the door open to change.