54. Keith Cochrane was appointed to the Carillion board as Senior Independent Non-Executive Director (NED) on 2 July 2016.202 He came with extensive board-level experience, yet quickly succumbed to the dysfunctionality prevalent on the board.203 He, and the board, were aware of concerns from shareholders about the company's net debt and its pensions deficit. The board minutes, however, show little sign of these positions being properly challenged and there was no general change of approach until the profit warning.204 Mr Cochrane said that he sought to challenge executives, "in an appropriate manner",205 but also believed there was "no basis" in 2016 for "not accepting the view that management put forward".206 In evidence to us, Mr Cochrane asked himself "should the board have been asking further, more probing questions?" but, even aware of the fate of the company and with hindsight, he could only respond "perhaps."207
55. When Richard Howson was sacked as Chief Executive in July 2017, the board on which Mr Cochrane already served asked him to step into the role on an interim basis. He began to recognise some problems the company faced, extending the size of the provision made in the profit warning, and admitting-to the board at least-that the company had cultural problems. Mr Cochrane told us that Carillion was "a business worth fighting for",208 but in giving investors "limited and vague" answers to "fairly fundamental questions" about the company, he reinforced their concerns and contributed to a continued sell-off of shares.209 In October 2017, Carillion appointed a permanent successor as Chief Executive from outside the company. His start date was brought forward to 22 January 2018 "to ensure the long-term sustainability of UK industry". By then, the company was already in liquidation.210
56. Keith Cochrane was an inside appointment as interim Chief Executive, having served as a non-executive on the board that exhibited little challenge or insight. He was unable to convince investors of his ability to lead and rebuild the company. Action to appoint new leadership from outside Carillion came far too late to have any chance of saving the company.
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202 Carillion plc, Annual Report and Accounts 2016, p 54
203 Carillion plc, Annual Report and Accounts 2016, p 50. He held executive roles at The Weir Group, Stagecoach plc and Scottish Power plc, and continued to be lead non-executive director for the Scotland Office and Office of the Advocate General.
204 Qq229 - 237 [Keith Cochrane]; Carillion plc, Minutes of a meeting of the Board of Directors, 26 January 2017
205 Q244 [Keith Cochrane]
206 Q242 [Keith Cochrane]
207 Q242 [Keith Cochrane]
208 Letter from Kiltearn Partners to the Chairs, 2 February 2018
209 As above.
210 "Carillion brings start date forward for new CEO", Financial Times, 20 December 2017