Sainsbury's Chairman sanctioned for using the company's staff to help renovate his country home
Sainsbury’s chairman David Tyler was sanctioned by the supermarket’s board after using the company’s staff and suppliers to help revamp his country bolthole.
The board sent Tyler, a City grandee who has led Sainsbury’s since late 2009, a warning letter after an internal investigation concluded there had been “material breaches” of three company policies which it viewed as an “extremely serious matter”.
Tyler paid £5,000 to charity in recognition of the work done by Sainsbury’s staff. The breaches, which occurred in 2013, were revealed in an internal investigation, which has come to light in documents seen by the Guardian.
The revelation will be highly embarrassing for Tyler who has extensive board level experience and is currently also chairman of Hammerson, the listed shopping centre developer, and on the board of Domestic & General warranty group. He was previously chairman of Logica, the IT and management consultancy, as well as private equity firm 3i and for many years was finance director of GUS, the former Argos to Burberry group.
As pointed out in the company’s internal report, Tyler had reason to pay close attention to the company’s policy on conflicts of interest because in 2012 he led a review into sponsorship deals with Sainsbury’s suppliers held by the racing driver son of Justin King, the then chief executive. King was not found to have breached company rules.
Sainsbury’s said in a statement: “This is an historical issue dating back to 2013. The chairman volunteered the information and the board conducted a thorough investigation in line with company policy, as they would with any other colleague in the same circumstances.
“As a result of the investigation, the chairman was given a warning but the board concluded that his failure to comply with company policy was unintentional, that he did not act dishonestly and made no financial gain.”
In the investigation Tyler, who was paid £496,000 by Sainsbury’s last year, was found to have used the services of a member of the supermarket’s sustainability team, who had expertise in green energy and engineering, to review plans for underfloor heating systems at his barn conversion near Lewes in East Sussex.
The Sainsbury’s employee gave advice after visiting Tyler’s property several times, during working hours, and asked a supermarket building contractor to develop a proposed action plan – which the firm carried out for free. It then conducted a £10,000 installation of an oil-fired boiler in partnership with builders already working on Tyler’s property.
Two other Sainsbury’s suppliers were also contacted for specialist advice on alternative fuel sources, such as biomass or groundfloor heat pumps, for the heating system.
Tyler also arranged for another Sainsbury’s employee to carry out “thermal imaging” – a method of assessing problems with insulation – at the property.
He then contacted Sainsbury’s company secretary Tim Fallowfield to arrange to compensate the company for its employees’ time after which it emerged that he had also employed the supermarket’s specialist building contractor.
Sainsbury’s review, which sought a quote for the work carried out by its contractor from Tyler’s builder and then audited that, concluded that the chairman had paid the going market rate for the job and so hadn’t benefited financially. It also calculated that £5,000 paid to charity by Tyler was commensurate with the amount of time spent by Sainsbury’s staff on his project.
But the investigation led by Sainsbury’s non-executive directors Mary Harris and Gary Hughes (who has since stepped down from the board) concluded that he had breached the company’s code of ethical conduct and guidelines on ethical suppliers as well as policy on conflict of interest and relationships at work.
Sainsbury’s ethical supplier guidelines say staff should notify the company of any personal interest or relationship with suppliers. The conflict of interest policy says involvement in a personal or business relationship with a colleague, competitor or supplier “could affect or compromise what you do at work”.
The policy on conflicts of interest also warns that if someone has gained from such a relationship or caused or risked damage to Sainsbury’s reputation as a result disciplinary action may be taken. “In serious cases this will be treated as gross misconduct and could lead to summary dismissal,” the policy states.
The report found Tyler had materially breached this because he did not initially disclose his relationship with staff member or supplier and gained advice and expertise from unapproved access to Sainsbury’s workers. It found: “He received (paid for) services from an expert supplier due to his position that he would otherwise not have been able to.” The ethical code also states that the company’s assets “should not be used to facilitate personal activities”.
Sainsbury’s report reveals Tyler acknowledged “he was aware of the general spirit of the policies – though not all the details within them.” It added that he had made this assertion despite some of the policies being presented to the board for review in January 2012