Carillion

There is legislation at the moment to hold directors of public and private limited companies to account. I don't know if the bosses at Carillion will be prosecuted or what the outcome of that would be. Until there's a full analysis of everything that happened, my view is that we don't have a full understanding of the problem, so this is not the time to suggest changes. Find out what actually happened and put all the information into the public domain.

It's never easy to pass laws to force people to behave in a responsible way, in business or in life.

There has to be a solution somehow, Primrose, even if it is somewhere between Murphy's proposal and the current situation.

It seems to me that big businesses have all the cards marked in their favour and it is the SMEs that suffer.

Perhaps there should be some differentiation between small privately owned businesses, where the owners are carrying all the risk, and the large companies whose owners are 'the shareholders' who, in the main, have very little interest in how the company is actually run so long as the dividends keep rolling in and in which no individual (s) carries all the risk.

Do you have any ideas?

McDonnell doesn’t like big businesses either durhamjen
So you are in good company there ( Marxist company.)
Too many random bloggers out there, I avoid looking at links to them.

I'm absolutely talking about practice Jen. You're not thinking that most small companies go bust 'because Carillion'!

You haven't really clarified anything at all, just speculating on my ethics.

His suggestion would put personal liability on small business owners in 'everyday' bankruptcies. It's the small ones who will be hit.

The whole point may be the opposite, but the impact would be massive personal suffering of people who were running an honest, ethical small business. Thank god he's just a random blogger.

Carillion collapsed because they did not remember their own duties to their creditors. Mission statements always look good in theory. It's the practice that matters.

theconversation.com/how-brexit-puts-the-uk-at-risk-of-more-collapses-like-carillion-90353

The whole point is that the opposite would happen.
Many of those 4000 small companies will go insolvent because of big companies like Carillion.
Carillion and Interserve would not be allowed to escape their commitments to the small businesses.
How many of the directors who made lots of money out of Carillion are still directors of other big companies, and still raking it in?
They won't be paying off the money Carillion owed to small businesses. They are the ones that will be allowing the small companies to go bust.

Your ethics are just the complete opposite to mine, Primrose. You are also talking theory, not practice.

I mean, I can't see it, but perhaps you have an insight? How would all those directors of the 4,000 or so companies that are made insolvent every year avoid bankruptcy when no-fault insolvency is the exception?

He just doesn't think things through.

And I would bet that the big companies, with lots of lawyers, would make sure they're the exception. The small businesses don't have access to massive legal resources. They're the ones at risk from his suggestions, not the Carillions.

But that's exactly what he is proposing by saying that no-fault would be the exception. Can you explain how that shifting of the evidential burden would work without impacting small businesses in liquidation?

"We set ourselves stretching goals, taking pride in doing a great job and helping our customers and partners to succeed.

We listen, learn and adapt our ideas and experience into better solutions and service for our customers.

We value the contribution of each individual and we work together to build strong, open and trusting partnerships.

We respect each other and we do things safely and sustainably. It’s good for our people, our business and our local communities."

Remember May saying that the government was a customer of Carillion?

Bankruptcy for the many, not the few?

How many people are losing out because of Carillion going into liquidation, because of the status quo, and the directors there leave with their money intact?
Do you realise how nonsensical your posts are?
You haven't read abour Carillion's values, either, have you?

Getting personal again Primrose - run out of arguments?

I find the Carillion pension scheme issues very simple although I am sure someone will tell me they aren't. How are companies allowed to put less than necessary in a pension scheme? If they had to ensure they had done that each month there would never be these black holes.

Maybe you should read Murphy's blog more instead of just letting your prejudice sway you.
He doesn't advocate bankrupting small business owners at all.

"That primary duty is, instead, to the creditors: it is the duty of the directors to make sure that everyone who deals with the company can be paid."

You obviously missed that sentence upthread.

Jen, are you on a commission posting links to Richard Murphy and his blog? There are loads on every thread. How much do you make? Is it a decent business?

So you think it's OK to bankrupt small business owners because of Carillion.
Bankruptcy for the many, not the few!

A tweet about Boris's bridge - sounds like a job for Carillion.

So?
What's wrong with changes for every company?
What's wrong with changing business ethos?

Have you read Carillion's values statement?

www.carillionplc.com/about-us/our-values/

That's what you call hypocrisy.

But the changes would impact everyone, not just Carillion, wouldn't they? He's not proposing changes just for them!

www.taxresearch.org.uk/Blog/about/

www.taxresearch.org.uk/Blog/richard-murphy/

Just in case anyone else wants to know why I think Carillion directors are hypocritical, and not Richard Murphy.
I also think anyone who takes money away from the public and sends it offshore is a hypocrite.

How is your degree in business management going, Primrose?

The bosses have walked away with big pots of money.
Do you think that is acceptable?

"The primary duty of the directors of a limited liability company is not, whatever most people think, to the shareholders. That primary duty is, instead, to the creditors: it is the duty of the directors to make sure that everyone who deals with the company can be paid."

The directors of Carillion haven't done that, have they?

If they were insolvent, they would go through the same process Jen. I'm not sure why you think Carillion are not following the insolvency process.

"So I would retain the right to ‘no fault’ limited liability but this would have to be the exception and not the rule"

"The directors of Carillion will no doubt think that they did not have liability to these people: caveat emptor when dealing with a limited liability company, they will say. But I do not agree. The primary duty of the directors of a limited liability company is not, whatever most people think, to the shareholders. That primary duty is, instead, to the creditors: it is the duty of the directors to make sure that everyone who deals with the company can be paid. This has failed in the case of Carillion. From the pensioners onwards the creditors of this company have been treated with contempt: in my opinion the directors should be personally responsible for that, to the limit of their own financial assets."

Why is saying that hypocritical?
It's a question of morality, I would say.
So does he.
Because the directors of Carillion have walked away and left the mess to others to sort out, doesn't mean that every director of an SME would do the same.

Has he done an impact analysis of all companies becoming unlimited liability? Most startups go bust within 5 years and most companies going into liquidation would be small ones.

His suggestions might work for Carillion but the impact would be bankruptcy for thousands of SME directors.

If these are his views, why does he use limited companies and limited liability partnerships for his own business activities? He could quite easily work without the protection he wants to remove from every other director.

He's unable to think through the consequences of his ideas and is a total hypocrite.

That's why Murphy doesn't believe her, Wilma.
There's no way the Tories would make new laws to go against the Tory ethos.
She's just saying it because she knows the Tory party is sounding and behaving more like the nasty party. She's after more votes.

I just don't know what they can be charged with. Unless TM intends to introduce new legislation, companies can carry on as they are because they're not breaking the law. We're talking about ethical issues and to the best of my knowledge they're not crimes.

Does anyone believe May when she says she will fine the bosses when they don't look after their workers?
Lots of her own party don't believe her.

www.taxresearch.org.uk/Blog/2018/01/21/mays-suggested-reforms-on-directors-responsibilities-are-a-sham/

I agree with Richard Murphy.