Corporate governance at BHS along with the “collective failure of regulators, trustees and advisors” is a “blight on the reputation of British business”, according to the head of the UK business group, the Institute of Directors (IoD).
Writing in an open letter to the chairmen of the House of Commons select committees for work and pensions and business, Simon Walker, director general of the IoD, also suggests it was “surprising” that the chairman of BHS’s parent company was not involved.
In the letter he added that everyone involved in the management of BHS should be challenged on their role in running the business.
“Serious questions need to be asked of almost everybody concerned in the running of BHS, the sale, and the company’s demise,” wrote Walker.
“In particular we have concerns about the conduct of the Arcadia board, headed by Lord Grabiner, once they decided to sell BHS.”
Walker points out that Arcadia set up a sub-committee of the board to explore sale options, which he adds is not necessarily poor governance, but “evidence given by Lord Grabiner to your Parliamentary committee suggests that he was relaxed about not being involved”.
He added: “It is surprising that he was not, as chair, part of that sub-committee.”
Controversy has surrounded BHS since it went into administration in April. On 2 June administrators at Duff & Phelps announced a buyer could not be found and the business was to be closed with the potential loss of 11,000 jobs.
BHS was sold by the Arcadia Group last year for £1 to Dominic Chappell who, it emerged, has little retail experience and has previously been bankrupt.
It also emerged that BHS has a pension deficit of £571m.
In May, in written evidence to the parliamentary committee, Lord Grabiner said he had “no involvement” in negotiations that led to the sale of BHS.