Governance Watch - Issue 2

Social Media

Bovis Homes – one of the biggest housebuilders in Britain - is to pay out £7m to repair poorly built new homes sold to customers. The compensation comes after angry customers took to social media and accused the business of pressuring them to move into incomplete houses so it could hit its sales targets.

As the Guardian reported, frustrated customers took to Facebook to vent their frustrations and come together in a Bovis Homes Victims Group. They appear to have surprised themselves at being able to get results that way. These were not minor problems – they included faulty plumbing, no guttering and half-finished tiling, all easily visually documented in today’s world with a smartphone and a video on YouTube.

At the end of 2016, the then Bovis CEO Dave Ritchie exited the business after a profit warning. At the start of this week, interim CEO Earl Sibley announced the £7m “customer care provision.” The language is worth noting – he said the company had experienced a much higher number of “snagging issues” on new homes than it would normally expect.

A glance at the Bovis website under ‘news’ reveals a steady stream of positive stories that are, in fact, advertising – as is its activity on Twitter @bovishomes and on its Facebook page, where there appears to be no mention of this compensation.

It’s another indication of how companies are still struggling to come to terms with the power of social media – which is ultimately just another means of communication, albeit a powerful – and to some, dangerous – one.

Paula Higgins, chief executive of the Homeowners Alliance campaign group, is quoted in The Guardian as saying: “[The Bovis homes] were signed off for the needs of the shareholder, not for the needs of the homeowner.”

Mergers

After 48 hours of drama, Kraft Heinz, the US food group backed by Warren Buffett, dropped its $143bn pursuit of Unilever, its Anglo-Dutch rival. It was long enough to revive strong debate about corporate culture, strategy and leadership as the two companies could not be more different.

As Prime Minister Theresa May had already called for greater powers to prevent predatory takeovers, it also raised yet another question of what comes next in a post-Brexit world. Sir Vince Cable, business secretary during the previous coalition government, tweeted:

Women at work

There has been a lot of debate in recent years about the many things that hold women back at work, but corporate culture has not featured high on that agenda. Certain industry sectors – such as the tech sector in Silicon Valley in particular has repeatedly made the headlines for alleged entrenched sexism.

Uber made the headlines for all the worst reasons when Susan Fowler, a former engineer at the firm, wrote a blog alleging that management and the HR department at the San Francisco-based company frequently dismissed documented cases of sexual harassment and protected a repeat offender.

The company has responded by hiring the former US attorney general Eric Holder to investigate the allegations with an “independent review.” CEO Travis Kalanick also revealed that women made up only 15% of the company’s workforce in engineering, product management and scientist roles.


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