Could a corporate constitutionalism framework have prevented Carillion’s failure and offer an effective critique of the UK’s corporate governance system?

Abstract

Carillion Plc, one of the biggest UK suppliers of public sector services, suddenly went into liquidation in early 2018, leaving over 2000 people losing jobs; £2.6 billion pension shortfalls; and nearly £2 billion liability to its suppliers, sub-contractors and other short- term creditors. A joint report issued by the UK government’s Department for Business, Energy and Industrial Strategy and Department for Work and Pensions entitled Carillion has blamed Carillion’s boardroom, auditors, regulators and the government itself.
This thesis agrees that Carillion’s messy corporate governance arrangements led to its collapse, and government failings contributed to the company’s demise. However, as mentioned in the joint report, “the mystery is not that it collapsed, but that it lasted so long”. Who should we blame for this corporate failure and subsequent social and financial turmoil?
The continuous spectacular corporate failures from Enron, in the US, to Carillion, in the UK, essentially highlight ongoing flaws in the existing corporate governance system – a system located within a contractual paradigm with efficiency and profit maximisation as main metrics. This thesis is not only concerned with the collapse of Carillion itself. Rather, by utilising Carillion Plc as a starting point, it seeks to provide an insight to the critiques and challenges currently facing the UK’s corporate governance and to breathe new life into our understandings by borrowing from Stephen Bottomley’s corporate constitutionalism framework. By re-conceptualising the corporate legal structure in political terms and highlighting the principles of accountability, deliberation and contestability, this framework provides a different approach to thinking about the effect of corporate governance, about the checks and balances of corporate power, and about how companies might be operated and regulated.
The purpose of this thesis therefore is to examine the possibility of preventing Carillion’s collapse by applying an alternative framework of corporate constitutionalism, and to offer a critical thinking approach towards the existing UK’s corporate governance system.

Date of Award	27 Sept 2022
Original language	English
Awarding Institution	University of Bristol
Supervisor	Charlotte L Villiers (Supervisor) & Roseanne Russell (Supervisor)