Following the spectacular collapse of Carillion in January this year, the Business, Energy and Industrial Strategy and Work and Pensions Committees published a report of lessons and recommendations on 9th May 2018. The report will most likely result in changing regulation of corporates, which may well affect their supply-chains. Highlights from the reports' 39 key findings and 12 key lessons are shown below:
- Carillion’s business model was an unsustainable dash for cash. The mystery is not that it collapsed, but how it kept going for so long.
- Carillion’s directors chose short-term gains over the long-term sustainability of the company. Short-term Director bonuses and shareholder dividends were prioritised, despite increased borrowing, low levels of investment and a growing pension deficit.
- Carillion relied on its suppliers to provide materials, services and support across its contracts, but treated them with contempt. Late payments, the routine quibbling of invoices, and extended delays across reporting periods were company policy.
Posted on Wednesday, June 13, 2018 - 09:36