BHS – the Parliamentary Report

If you are in business, this BHS Parliamentary Report makes for a very depressing read. It combines a narrative of weak governance and the exercise of singular personal influence that is breathtaking.

Read the full report here…pdf version

The Committee make some sweeping assertions, however, about the nature of ‘business’ in the UK, which to this reader, do not perhaps reflect the true state of a wider ‘moral’ commercial landscape extant in the presently configured UK.

It gives little regard, I would argue, for the good work and innovative governance practice delivered by the social business market, the ethical investment marketplace and the community endeavour or social enterprise sectors.

In the UK good practice abounds, but it was not prowling the corridors of BHS at the appropriate time nor, allegedly, had the fearless support of a company management team that were vigorous and rigorous in pursuit of  customer care, employee development and growth and tilted all energy towards a cohort of pensioners, upon whose expertise and life work in the company, these missed opportunities were nurtured through time.

‘We chose to investigate BHS because it encapsulated many of our ongoing concerns about the regulatory and cultural framework in which business operates, including the ethics of business behaviour, the governance of private companies, the balance between risk and reward, mergers and acquisitions practices, the governance and regulation of workplace pension schemes, and the sustainability of defined benefit pensions…’

Source: First Report of the Work and Pensions
Committee and Fourth Report of the Business,
Innovation and Skills Committee of Session
2016–17 – BHS p.3  Accessed: 25.07.2016

This Parliamentary mission statement delineates old concerns and sources of tension for those of us, who are in or have been in, the Trade Union movement. The stated concerns of the Committee represent an amalgam of old arguments and fierce defensive stands for organised labour in the past. It, as a mantra, is not new.

The message about the inadvisability of exploitation is well developed on the left, what is new, perhaps, is the range of voices now expressing such concerns.

Like all large business, developed and managed through the conduit of manipulated private cash, the focus of the business, the report alleges, seemed to have been the enrichment of individual family members, with scant regard for re-investment in company infrastructure, technology and the long term welfare of company workers after retirement.

‘The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. The tragedy is that those who have lost out are the ordinary employees and pensioners. This is the unacceptable face of capitalism’.

Source: Source: First Report of the Work and Pensions
Committee and Fourth Report of the Business,
Innovation and Skills Committee of Session
2016–17 – BHS p.55  Accessed: 25.07.2016

It is the owners of the means of production who were to blame. Marx would have been proud.

What can be done?

  • Those on the left, of whatever shade or fervour, can become interested and active in the development of alternative business forms and modes of governance. Making the alternative ethical case from a political position of encouragement, not criticism. The beginning of transforming the ‘capital landscape’.
  • If the notion of nationalisation for large services and industries is unpalateable, then activists should embrace ‘The Collaborative Commons’, delivering social output and growth in common ownership with others. An old idea given new energy by entrepreneurs and academics recently in The Zero Marginal Cost Society, Jeremy Rifkin, Palgrave MacMillan, New York, 2015. See my review in another publication here.
  • In constituencies, where in my difficult experience, old rigid, command and control practices often continue to exist unfortunately, the energised left should help engage and deliver social business and community business enterprises as a driver of their activities. As cost control is different from rampant profiteering, so good governance and an ethical business position is the alternative face to big business, greed and consumer exploitation. It is not the abandonment of profit that should drive change, it is the added exercise of ethics that matter.
  • Make ethical business and social outcome part of the local and regional campaign activity across the UK, but particularly in rural areas, or those constituencies where blue pennants fly in bold profusion. This will not make an overnight change to voting habits, but members of the left, acitvely involved in new, ethical governance issues will slowly, over time change the perception and the voting record of communities. People will vote against deference and perceptions of ‘the local lord and lady’ know best, when there is a credible, articulate, practice based alternative available. Make social enterprise party praxis, then the communities we serve will too!
  • Work with regional Party machinery to make placing ethical business specialisms and social business governance knowledge on every LEP, school governing body or enterprise development project in every local authority. Make the voice of difference and ethical enterprise heard.
  • Make ethical business activity, the creation of community change through the prism of social responsibility, environmental sustainability and equality of opportunity and outcome the central plank of every Young Labour delivery, for example. Win the hearts and minds of the next generation of social business entrepreneurs, by harnessing their energy progressively, beginning now.

If you do this, then the next generation of entrepreneurs, social innovators and those who set out their stall to govern political parties will also give their vote to the Left. The world of business, forlornly outlined in this Parliamentary report, will have begun to systemically change from the roots up.

There is gargantuan range of research and thought abroad about social business, ethical entrepreneurship and business for good. From 80,000 Hours nurturing graduates to think of others to the International Consortium of Investigative Journalists, showing the world what business should not be.

Why can the Left not successfully harness it as a core principle?

See the full BHS Select Committee report here.

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