Two consultants have spoken about how the collapse of FM service provider Carillion shone an “uncomfortable spotlight” on the company’s problematic supply chains, serving as a warning to the industry not to allow a similar scenario to happen again.
Mark Whittaker, FM consultant & non-executive director at Institute of Workplace & Facilities Management was speaking to Facilitate after the Financial Conduct Authority (FCA) published a warning statement stating that some of its executive directors “recklessly misled” markets and investors over its financial performance before the company collapsed two years ago.
Whittaker said: “For many, the findings from the FCA did not come as much of a surprise and their judgement was clearly damning in that some of the executive directors acted “recklessly” in not disclosing the full extent of the perilous financial position.
“Personally I also think there should be investigations into how this scale of cover up and inflated balance sheets was never picked up on by their auditors. Alas it has shown that greed, instead of governance was the culture at the time and I hope lessons will continue to be learnt from the whole debacle."
Whittaker stresses the importance of recognising that Carillion's FM business was not the cause of its eventual downfall.
“The [FM] industry should not be tarred with that brush," said Whittaker. "Construction projects like the Royal Liverpool University Hospital and Midland Metropolitan Hospital significantly contributed to the collapse.
It is in Carillion's procurement culture that FM can learn lessons, Whittaker continued.
“It did shine a particularly harsh and uncomfortable spotlight on Carillion’s corporate governance and the adversarial way [in which] their supply chains were treated and frequently not paid on time, something we can never allow to happen again.”
Another FM consultant, John Bowen, focused on the trust deficit.
“As a customer, subcontractor or as an employee you need to be able to trust the people at the helm of an organisation – and when you find that there has been this level of deception, what can you trust?”