Carillion – a Leviathan Falls by Christopher Gibaud


What a roller coaster ride it has been for the last few days. A blistering conference over the
weekend, Dr Lance Wallnau bringing his 7 Mountains message of radical activism for Christians in
the marketplace. The conference closed with a presentation by a very successful American
businessman of how he does business with God as his CEO, senior partner and owner. This man,
who came from humble and disadvantaged beginnings (he is dyslexic, dropped out of school,
never went to college), has nevertheless built a number of high performance businesses, operating
to a standard of scrupulous honesty before God which required him, on a number of occasions, to
surrender companies, contracts and finance when he was convicted in his spirit of having acted
below God’s standard. From the world’s perspective he behaved naively, but he pleased the Lord
and has been blessed in abundance as a consequence.

Next morning came the awful crash of Carillion’s liquidation in the marketplace. No greater
contrast could I imagine. A Leviathan of our current economic structure, an exemplar of current
economic wisdom which has embraced the partnership of the State and the Market in the PFI
programmes of the last 25 years. A Leviathan that has grown, year on year, from being a global
construction company heavily engaged in the Middle East to an arms length instrument of the
British State, providing a bewildering range of services across Health, Education, Transport,
Defence, Prisons, all on behalf of the State at national and local level, as well as undertaking
enormous construction projects ranging from HS2 to hospitals in Liverpool and the Midlands. The
last two are reckoned to be amongst the final straws that broke the camel’s back, both being over
budget and way behind agreed delivery dates. I drove past the enormous construction site that is
the Royal Liverpool Hospital yesterday – a solitary security guard was the only sign of life behind
padlocked gates.

The numbers make you wince. Just before Leviathan finally fell the liabilities had grown to more
than £2 billion with just £30 million cash in hand at the bank. But the people cost is the real
tragedy. 43,000 Carillion employees globally, 20,000 in the UK, these are big numbers. But bigger
still are the numbers of the downstream casualties – it is estimated that Carillon employed 30,000
sub contractors here in the UK, all of whom now have many jobs teetering on the edge, many of
whom may not make it through in the months to come. A prominent example this week has been
the landscape contractor, owed £800,000 by Carillion, who had to make 10 of his employees
redundant on Tuesday. Multiply that one up, add in a further factor of say 3 to account for
dependent family members and you are well on the way to a million personal tragedies even
before you start to count the cost to local communities and local businesses.

So, you might reasonably ask, who was in charge? There is the inevitable rush to judgement,
particularly concerning the integrity and competence of the management of the company. The
Financial Times this week soberly assessed the provenance of Carillion’s Board. It ticked all the
corporate governance boxes – broad spread of appropriate expertise, no long standing cronyism,
two women amongst the non execs, four of the directors were accountants, average age of 54, a
highly respected Chairman in Philip Green with the right large company experience and an
established position as one of the “great and the good”, a former adviser to the then Prime Minister
David Cameron on Corporate Governance. Despite these apparently excellent credentials the FT
then listed three fundamental strategic business errors that the Board appear to have made and
two recent decisions that appear to protect those in leadership from bearing any personal financial
cost as a consequence of failure. (1)

Now it seems to me that the Board are far from being alone in carrying the responsibility for the
collapse. A series of Governments who have been complicit by encouraging Carillion’s growth,
awarding ever larger contracts across an ever increasing range, in recent months apparently
throwing caution to the winds in a desperate attempt to keep the company afloat. No doubt the
Board may have been encouraged to think they were “too big to fail”. Financial markets who now
say they had their doubts all along but were happy to take the commissions from the constant
Mergers and Acquisitions that appear to have disguised the downward slide. Banks playing the
integrity card in the last days, refusing funds as they finally acknowledged the scale of the
imminent disaster and self righteously preached financial caution. Layer upon layer, weave upon
weave, Leviathan builds until it is beyond any restraint, perhaps beyond any control, however high
the place of authority, however honourable the intentions.

The system is broken. Even good and honourable men and women are being overwhelmed by our
broken and greedy economics. The whole economic system needs to be transformed, we need a
paradigm shift. We need Generous Economics (2). We are, perhaps, at a tipping point moment. It
may just be that Carillion’s collapse leads to a wider impact upon our economy, our political
dynamics and our awareness, as a nation, of the situation we are in. Perhaps. It may be that
Carillon is a harbinger of worse to come. For now we must seek to understand the implications of
this present moment, particularly those of us who believe that God is calling us to listen to Him, to
listen to His new directions.

I finish with a quote from Bruno Roche, one of my Jubilee heroes. It comes from his book
“Completing Capitalism”. It is a word that speaks to this moment:
“Today may be such a moment in history to enact the Jubilee in a real, tangible way through a new
business model based on its underlying ethical and moral principles. Today may be the time to
release the true restorative power of enterprise.” (3)
Amen to that.

Christopher Gibaud
© January 2018

(1) Financial Times 17.1.18 “Carillion’s board: misguided or incompetent?” Kate Burgess, FT Corporate correspondent.
(2) “Jubilee Letters – Fifty steps towards Generous Economics”. Christopher Gibaud.
(3) “Completing Capitalism – Heal Business to Heal the World” page 24. Bruno Roche and Jay Jakub.

Christopher Gibaud is the co-Founder of the North West Christian Business Forum

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