Sir Philip Green and Corporate Governance Hit the Headlines Again
Corporate governance has again hit the headlines this week following the damning report into Sir Phillip Green’s conduct with the management of his company and the related BHS business empire. As a result, the government is considering whether to launch an investigation into corporate governance in private limited companies, and in the words of Theresa May recently, to 'make our economy work for everyone by getting tough on irresponsible behaviour in big business'. And quite rightly too.
The report blamed weak corporate governance at Green’s company Taveta Group whereby they concluded it was run by one individual with a large character, and effectively impinging on the appropriate running of the company. Key persons were criticised in the report for not scrutinising where they had a responsibility to, and instead turned their eye from key decisions, choosing reputation, or rather fear of ruining such reputation, and not wanting to rock the boat in questioning those who wanted key decisions being made. This is a grave lesson to learn after the empire has fallen.
Yet again, the importance of corporate governance, not just in big businesses, has been pressed in the corporate world. It is never enough to say 'I just signed what I was asked' or 'I was intimidated to question why'. This marks another step closer to establishing corporate governance at the centre of all businesses. In the next few years we will see the increase in this area and the need to be up to date, of that I am sure.