“Dominic Chappell, who bought retailer BHS for £1 and presided over its collapse barely a year later, had credibility problems that would have frightened many sellers away.Not only was he a former bankrupt who had been introduced to the sale of BHS by a convicted fraudster, but his own investment bankers had walked out after discovering that they had been misled about the terms of the deal.Yet so determined was Sir Philip Green, who acquired BHS in 2000, to proceed with the rushed sale that, instead of giving proper scrutiny to Mr Chappell’s obvious shortcomings as a buyer, the retail entrepreneur either overlooked them or fixed them by inserting himself on the other side of the deal.”
Source: BHS report lays bare failure and liability — FT.com
The collapse of BHS with the loss of jobs and pensions is an outrage and Sir Phillip Green should rightly be pilloried in the media for this. However, neither stripping him of his knighthood, nor even securing a substantial contribution from his personal fortune into the pension fund, something that I would not bet money on, addresses the real problem.
If the government want to look after the interests of ordinary workers they need to provide them with some real power in a world where it has been consistently taken away from them. The model of capitalism that says companies need to be run exclusively in the interests of shareholders needs to be challenged and the rights of other stakeholders given real legal force.
Having workers representatives on the Board of companies would be one step, changing tax laws that allow debt to be an allowable deduction against profit would be another. Real action against tax havens and a comprehensive overhaul of international tax arrangements for multi-nationals to ensure tax is paid where profit is earned. Payments of dividends out of reserves should be subject to specific rules which take account of the claims of other stakeholders, such as pensioners before they are allowed.
Sir Phillip Green may be the unacceptable face of capitalism but it is not the face we need to change. We need a system where the rights and duties of a much wider range of stakeholders are taken into account and given real power. At the moment more and more wealth and power is accruing to a smaller and smaller group of people. There moral culpability is a matter of concern. More important however is the need to create a structure which tips the scales back towards the interests of ordinary workers through genuine shifts of power.
Crucifying Sir Phillips’ reputation in the press may make people feel better but it does not address the systemic issues of a model of capitalism which is becoming pathological. Mrs May is going to have to translate rhetoric into radical legislation if her credibility is to be sustained.