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BHS was sold to Dominic Chappell, a former bankrupt, for £1 in 2015, which raised significant concerns about due diligence and governance practices. The company faced severe financial difficulties, with a reported pension deficit of around £571 million and massive losses.

The collapse resulted in significant job losses and left pensioners facing uncertainty about their retirement funds. An inquiry revealed failures in governance and accountability, leading to calls for reforms in corporate governance practices. Philip Green faced substantial public criticism and was summoned to give evidence to a parliamentary committee regarding the handling of BHS.

The case highlighted the importance of proper oversight in corporate governance, particularly when it comes to pension liabilities and the responsibilities of company directors.

https://committees.parliament.uk/committee/164/work-and-pensions-committee/news/98027/bhs-report-published-16-17/

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Fined £20m for failing to comply with GDPR regulations.

Board of Directors:

Chairman and CEO - Sean Doyle

COO - Rene de Groot

CPSO - Neil Chernoff

HR - Lisa Tremble

CFO - Jose Barrionuevo

CIDO - Dirk John

CCO - Colm Lacy

CTO - Andy Best

Secretary - Andrew Fleming

Safety - John Monks

Observations:

Mainly old white men, lack of diversity, potentially leads to lack of diverse opinions to make decisions

CEO serves on board, potentially leads to pressure to vote the same way as CEO

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CEO at the time of the scandal was Paula Vennels (2010-2019).

The UK government was the Post Office's sole shareholder and had a non-executive director (NED) on the Post Office's board.

Board of Directors:

Made up of senior executives responsible for the overall strategic direction of the Post Office.

Included representatives from the government, which owned the company.

Executive Management:

Responsible for day-to-day operations and decision-making.

Included the CEO, CFO, and other senior executives.

Regional Management:

Overseed the operations of the Post Office network across different regions of the UK.

Included regional directors and managers.

Local Management:

Responsible for the management of individual post offices and their staff.

Included postmasters, who were self-employed franchisees, and their staff.

Consequences of the Scandal:

Criminal Convictions: Many postmasters were wrongly convicted of crimes and faced financial ruin.

Loss of Trust: The scandal eroded public trust in the Post Office.

Government Inquiry: A government inquiry was launched to investigate the scandal and its causes.

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Hid interest rate of 5853% annual interest rate

FCA fine of millions and in 2014 said they write of loans of 330,000 customers

Had advertisement banned in 2014 for breaching code on social responsibility. Ad implied it was suitable to routinely use payday loan for purpose of supplementing monthly income without much consideration

The Advertising Standards Authority said promotion breached code as claim to save money was untrue

Director - Anthony Simon

Founder - Errol Damelin

CEO - Neil Wass, Tim Welles, Tara Kneafsey all CEOs in 2014 at time of the scandal

2020 the company dissolved

2018 company recieved emergency £10m cash injection from stakeholders

Grant Thornton lined up to act as administrator and assumed position when form went to administration

January 2020 shared £23m in compensation which was only 4.3% of what was owned

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BHS, once a well-known British department store, was sold in 2015 by the Arcadia Group (owned by Sir Philip Green) to a consortium for just £1. The sale raised immediate concerns about the company’s financial health, as it was revealed that BHS had a substantial pension deficit and was struggling to stay profitable. In 2016, BHS went into administration, leading to the loss of thousands of jobs and leaving a significant pension shortfall that affected many former employees. The scandal prompted investigations into the financial practices and governance structures surrounding the company.

Corporate Governance Issues:

1. Board Oversight: The BHS scandal highlighted failures in board oversight and accountability. Questions arose about how the board managed risk, particularly regarding the pension scheme and financial reporting

2. Transparency and Disclosure: There were concerns about the lack of transparency in financial disclosures. The company’s financial troubles were not adequately communicated to shareholders or the public prior to the sale.

3. Pension Obligations: The handling of the pension fund was a major issue. The deficit was not addressed adequately, and the eventual fallout left many pensioners vulnerable. This raised questions about the fiduciary responsibilities of the directors to protect the interests of employees and stakeholders.

4. Executive Accountability: Sir Philip Green faced significant criticism for his role in the company’s demise, particularly regarding his management style and the decisions made leading up to the sale. The scandal prompted calls for greater accountability of executives in large corporations.

5. Regulatory Response: In the aftermath, the UK government considered reforms to corporate governance practices, particularly concerning the treatment of pension funds, executive pay, and the responsibilities of company directors.

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In 2016, a detailed report was released by the Business, Innovation and Skills Committee (ISC) which highlighted the poor working conditions at the warehouses of retailer Sports Direct. Its CEO and majority shareholder, Mike Ashley was ruthlessly criticised in the report for not inspecting his warehouses regularly enough and having ‘extremely disturbing’ working conditions for his staff.

In the report, the company was accused of several failings, including paying its staff less than minimum wage and punishing employees for taking water breaks or time off for illness. In a particularly harrowing account, one worker allegedly gave birth in a toilet because she was too afraid to miss her shift.

It was claimed that some employees on zero-hour contracts were also forced to work unpaid overtime or risk being denied more hours in the future. There were even allegations of permanent contracts being offered in exchange for sexual favours.

The report concluded that the retailer should carry out a wide-reaching independent review of the entire corporate governance practices at the company. It called for Sports Direct to review its board oversight and effectiveness, acquisition strategy, and associated due diligence.

Sports Direct took a series of steps to address its problems. In its annual report, the business revealed that its staff are now able to give feedback online and flag issues of concern, workers at the retailer’s warehouse can now liaise with the management director in monthly meetings and a new health and wellbeing service for staff has been launched.

Some have argued that the top-down culture at Sports Direct was a major cause of these failings and had Mike Ashley not had a stake in the business, changes might have been implemented before reaching such a critical stage.

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FTX was a crypto-stock exchange that filed for bankruptcy after founder Sam Bankman-Fried committed multi-billion dollar fraud.

FTX customers lost $8bn

FTX's equity investors lost $1.7bn

Investors in SBF's hedge fund lost $1.3bn

The US government brought civil and criminal charges against SBF and FTX's top executives for misappropriating over $8bn in customer deposits.

8 criminal counts -> wire and securities fraud

unlawful campaign finance contributions

The US Securities Exchange Commission and Commodity Future Trading Commission also brought civil claims against SBF for fraud.

FTX Company Structure - "FTX suffered from a nonexistent organisational structure." - "SBF hated organisation charts."

It took company psychiatrust George Lerner to assign a structure to the company.

Co-founders: SBF and Zixiao "Gary" Wang

CTO: Gary Wang

Head of Engineering: Nishad Singh

Chief of Staff: Jen Chang

COO: Constance Wang

~300 staff around the time of collapse.

Senior staff labelled as "unemployable" by headhunters due to the financial mismanagement.

FTX is incorporated in Antigua and Barbuda.

West Realm Shires Inc. is the US-facing offshoot.

FTX had a Bahamas-based Venture Capital fund.

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This digital UK bank was fined £29million for failing in their financial crime systems and control.

Their CEO, Anne Boden, quit shortly after this.

The board of directors consists of a Chairman, Executive Officers, Directors and Non-Executive Directors.

The company follows the Wates Corporate Governance Principles for Large Private Companies.

References:

https://www.starlingbank.com/about/board-of-directors/

https://www.starlingbank.com/about/corporate-governance-statement/#:~:text=Starling's%20vision%20and%20mission%20are,it%20and%20aim%20for%20greatness.

https://www.fca.org.uk/news/press-releases/fca-fines-starling-bank-failings-financial-crime-systems-and-controls

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FCA fines Starling Bank £29m for failings in their financial crime systems and controls

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The FCA has fined Starling Bank Limited £28,959,426 for financial crime failings related to its financial sanctions screening. It also repeatedly breached a requirement not to open accounts for high-risk customers.

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DESCRIPTION

In 2019 Ted Baker overstated their stock value to shareholder because of "accounting errors".

This mistake led to the gradual demise of the company (a subsidiary of Authentic Brands Group (ABG)) which filed for administration in 2024.

The company also faced internal issues with the Founder and CEO Ray Kelvin who was accused of getting a little bit too close with his employees 👀

A mixture of lies about stock valuations and controversy in the company eventually led to their administration.

CEO

Rachel Osborne - Ex-CFO of Debenhams, Domino’s Pizza, and John Lewis

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During the 2010s, Cambridge Analytica, a British consulting firm, collected millions of people's personal data without the consent of the users.

The people's data were used to highly target people with political campaigns, during the 2016 US election and the British Referendum.

This violated multiple data protection laws especially the data protection act that was the most recent at the time

The CEO at the time was Alexander Nix with the vice president being Steve Bannon.

Julian Wheatland — Chief Operating Officer and initial shareholder

Alexander Tayler — Initial shareholder.

Jennifer Mercer — Director

Rebekah Mercer — Director

Alexander Bruce Taylor — Director

Ahmad Al Khatib — Director

Cheng Peng — Director

Johnson Chun Shun Ko — Director

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Occurred in 2012.

HSBC Holdings fined $1.9 billion, along with $665 million in civil penalties.

Subsequently in the UK the Financial Conduct Authority (FCA) fined HSBC approx. $88 million for “unacceptable failings” in its anti-money laundering systems (in 2021).

Weak AML controls led to illegal fund transfers and currency exchanges through their correspondent banking services.

HSBC but one of a string of major banks caught in illicit transactions: ING, Barclays and Credit Suisse faced serious fines for violating sanctions in place against countries like Iran and Libya.

Pulled operations from USA and moved into Asia.

Shift in governance culture afterwards.

CEO is Stuart Gulliven

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16 year saga of deceit and the mistreatment of workers.

It was the board’s job to act on serious information such as employee malpractice or faulty systems. The the case ran from. 1990 and is still ongoing today and as its been so long it means the board did not act, did not ask questions or try and get to the bottom of the matter, even when alarms were raised. Thousands of workers raised their concerns and were each told individually that no one except them were experiencing problems.

A board that can’t govern if its executives clearly don’t communicate properly, which raises governance problems and resulting in poor management of employees.

Due to the issues with horizon showed the unsound corporate culture encouraging ignorance, arrogance and blind belief in a system that has gone on to ruin many lives.