BHS AND SPORTS DIRECT SHOW WHY FIRMS MUST HANDLE THEIR REPUTATIONS BETTER SAYS CBI
UK businesses need to manage their reputations better after the recent debacles at BHS and Sports Direct, according to the Confederation of British Industry (CBI).
Firms are still facing a perception problem, suggesting trust must be rebuilt, CBI Director General Carolyn Fairbairn told the British Private Equity and Venture Capital Association conference in London on Thursday.
“We know there have been some real mistakes made, and I think we can all name some individuals recently, you know, when you see the story of BHS or we see what’s happened at Sports Direct.
“I think we all can say that’s not what businesses stand for.”
Sports Direct has faced a gruelling year, having come under fire for working conditions at its Shirebrook factory and its corporate governance practices.
The retailer’s boss Mike Ashley has been lambasted for using zero-hour contracts, presiding over ”Victorian” working practices and was grilled by MPs in June, where he admitted that some warehouse staff were paid below the national minimum wage.
Meanwhile, former BHS owner Sir Philip Green has been denounced for taking more than £400 million in dividends from the now collapsed high street retailer, affecting over 11,000 jobs, leaving it with a £571 million pension deficit, and selling it to a man with no retail experience.
While Ms Fairbairn said that these mistakes are being made by a slim proportion of UK firms, she stressed that the other “99%” of companies “now need to treat it as their problem too.”
“We are going to have to see some changes in the way businesses talk about themselves. We need to get better at telling the positive story.”
The CBI chief also lamented the fact that, while the organisation had real strengths, there is a real challenge representing “modern British business,” and introducing adequate diversity.
“I’m incredibly keen on having more women,” she said, adding that the composition of the BVCA conference showed that “there’s work to be done here.”
“But it’s a challenge we’re all facing…even with all of this Brexit stuff, when I go out to talk to members, they are really keen on just getting diversity of their companies up, because it’s a talent issue and it’s a growth issue.”
She said the CBI is now calling for the UK Government to maintain “uninterrupted, barrier-free access to the single market” as part of its Brexit negotiations.
Ms Fairburn said UK firms could advocate for single market access by encouraging European businesses to raise their voices and influence negotiators across the EU, and by framing free market policies in terms of the benefits to the average citizen.
She highlighted a line in Chancellor Philip Hammond’s speech at the Conservative Party conference, which stressed British people did not vote for Brexit to become poorer, or less secure.
“We have a duty and, I think, an obligation to make as clearly as we can the case for prosperity,” Ms Fairbairn said.
“Politics are going to be very, very significant here, at home and also in Europe.”