Carillion board papers reveal ‘pervasive institutional failings’
MPs heap further criticism on bosses of collapsed construction giant Carillion.
MPs have launched a fresh attack on bosses at Carillion, saying there was a “wholly deficient” corporate culture at the collapsed construction giant.
The Work and Pensions and Business Select Committees said new evidence submitted to their joint inquiry into the spectacular demise of the firm revealed “pervasive institutional failings”.
Directors didn’t just drop the ball once, they made a habit of it Rachel Reeves MP
The committees published extracts from a presentation made to Carillion’s board last August by EY, which included comments such as:
– Lack of professionalism and expertise.
– The value that the Group provides to the performance of the business is not clear.
– Culture of non-compliance.
Frank Field, chairman of the Work and Pensions Committee, said: “We have heard a lot about the ‘shock’ profit warning in July 2017, as well as the board’s ‘surprise’ and dismay when they were finally forced into administration on January 15 – at public expense because there was not enough left in the company to pay even for that.
“But these papers reveal a wholly deficient corporate culture, studded with low-quality management more interested in meeting targets than obeying rules.
“They reveal also pervasive institutional failings of the kind that don’t appear overnight, long-term failings that management must have been well aware of.”
Rachel Reeves, who chairs the Business, Energy and Industrial Strategy Select Committee, said: “The Carillion directors either took their eye off the ball or they failed to see the warning signs that investors, Carillion staff, and, in this case, EY flagged to them.
“Directors didn’t just drop the ball once, they made a habit of it, giving every indication that it was the long-term failings in the management and corporate governance at Carillion which finally sank the company.”
A total of 1,371 Carillion workers have been made redundant since the company went into liquidation in January.