U.K. Lawmakers Urge More Reporting Rules for Large Private FirmsBy
Pensions committee makes recommendations after BHS inquiry
Conclusions attack ‘lamentable’ corporate governance at firm
Large private companies should have to meet the same corporate governance and reporting requirements that apply to publicly traded firms, a panel of lawmakers recommended, citing the collapse of the department-store chain BHS Group Ltd.
BHS, formerly known as British Home Stores, went out of business in April 2016 with a pension deficit of at least 570 million pounds ($710 million). The failure cost 11,000 jobs and threatened the pensions of more than 20,000 former employees. It had been sold the previous year by billionaire Philip Green for a pound.
In a report published Sunday, the House of Commons Work and Pensions Committee said the practice standards expected of listed firms should apply to any company with more than 5,000 defined benefit pension-plan members. It accused BHS of a “lamentable” level of corporate governance, with little public information about its strength or that of its pension fund, and said that those who were relying on it for their retirement had no voice in how it was run.
“For a company with a big social and economic footprint like BHS it is simply not enough to be accountable to shareholders -– particularly when one shareholder owns most of the stock,” Frank Field, the committee chairman, said in a statement. “The finances and leadership of a company with so many people depending on it should be open to scrutiny.”