The public shaming of P&O won’t help us give up the habit of exploitation for good
We all know the playbook by now. Big corporation does something immoral or illegal, often both. Cue public outcry and calls for “something to be done”. The chief exec is hauled before a parliamentary committee to account for himself (it’s usually a man) and then, well … that’s often where things end. But this time, the outcome may be different.
Yesterday’s mauling of the P&O Ferries execs at the BEIS Select Committee was a classic of the canon – Darren Jones MP’s opening zinger, one for the ages. “Are you in this mess because you don’t know what you are doing, or are you just a shameless criminal?” As he squirmed and faltered over his opening words it was almost – but not quite – enough to make you feel a sting of sympathy for CEO Peter Hebblethwaite. Unsurprisingly he never got round to answering that one.
Instead we got the tried and tested opening apology – remember the most humble day of Rupert Murdoch’s life? Next, the expression of empathy for those screwed over by what was an extremely difficult but sadly unavoidable decision. And then an hour or so of rinse and repeat while failing to offer any satisfactory detail to account for their actions.
One wonders whether Hebblethwaite and his colleague Jesper Kristensen, chief operations officer of P&O owner DP World, had factored this uncomfortable scrutiny into their decision making matrix when deciding to fire 800 of their employees with no notice, via Zoom.
The danger is that this ritual humiliation of execs is now “priced in” to boardroom decision making – a storm to be weathered rather than a point of orientation to help plot a different course. At its heart, the P&O scandal is about what factors are considered when making decisions – big or small – within a business. While there are innumerable businesses out there that are looking after their staff, giving back to their communities and protecting the environment, the behaviour of this errant ferry company has once again put the trust and reputation of business in the headlines for the wrong reasons.
There is currently debate about whether and what employment laws P&O may have broken, and P&O’s sacked employees should certainly have their day in court. But the case asks fundamental questions about UK company law too. At the risk of absolutely killing the maritime metaphor, the 2006 Companies Act is a corporate North Star towards which our businesses must align their behaviour. Section 172 of the Companies Act lays out the “job description” of company directors, placing the interests of shareholders above those of other stakeholders like workers, customers, local communities and national interest. The P&O decision trampled all over the interests of these latter groups. That a decision like that could be made again without breaching this law raises serious questions.
In his contribution, government Minister Robert Courts indicated that the government is looking at the wider business behaviour aspects of this case and will come to parliament with a package of proposed measures next week. This should include an amendment to Section 172 that updates the duties of company directors to align their wider social and environmental impact with the delivery of profit.
For those companies that can’t locate their moral compass, now is the time to update the law to steer them on the right course.