Monday’s Treasury Select Committee report into the collapse of BHS provided scathing criticism of the actions of former owner Sir Philip Green, but would annulling his Knighthood really provide adequate redress for the company’s pension shortfall?
BHS, the former employer of 11,000 people, will shut up shop for the final time in August having accumulated debts of £1.3bn, including a pension deficit of approximately £571m. On Monday, the Work and Pensions and Business, Innovation and Skills Select Committee published a report into the demise of the high-street mainstay and found former owner, Sir Philip Green, responsible for the company’s £571m pension fund “black hole”.
Sir Philip famously sold BHS to former bankrupt Dominic Chappell’s Retail Acquisitions Limited for just £1 in March 2015 after he and his family allegedly received £586m in dividends, rent and interest during his 15 years of ownership. As thousands of employees face reductions to their pension pot, MPs are now urging Mr Green to make a large contribution to fund the deficit with Shadow Chancellor John McDonnell adding that, “If Philip Green won’t do the right thing by the members of the BHS pension fund then he should have his knighthood removed”.
But would simply annulling Sir Philip’s knighthood be enough?
In the recent past we have seen widespread public clamour for individuals seen as the personification of bad corporate governance to have personal honours annulled; in 2012, Fred Goodwin was famously stripped of his knighthood for services to banking as a result of his involvement in the 2008/9 failure of RBS. However, whilst seemingly punitive, such actions are largely cosmetic and are no substitute for full investigation by regulatory bodies.
Furthermore, for any action by regulators to be effective it must come swiftly and transparently, something which has been lacking from the longstanding investigation by the FCA into the actions of RBS’s Global Restructuring Group. As discussed by berg’s Damian Carter here, we have seen the FCA’s long awaited s.166 report repeatedly delayed despite assurances that the same would be published in the first quarter of this year.
Whilst Monday’s Select Committee expressed support for investigations by the Pensions Regulator and other bodies, it remains to be seen whether any such action will be conclusive enough to provide BHS’s employees with the financial redress needed or whether they will simply have to make do with blaming their reduced pensions on plain old “Mr Green”.