Is there life at board level after disqualification?

While many have entire management careers without experiencing a major crisis, others frequently find themselves in the eye of the storm.  For a dozen years I led an independent not for profit healthcare provider through a number of storms. Two years after I left my employment as chief executive, I signed an undertaking not to be a company director for six years.

The journey to this moment was rooted in delayed commissioning plans and increasing demand within a fixed financial envelope.  Ongoing financial pressures are a given in public sector services, though someone wiser than me might have been better prepared for goal posts continuing to move. What we believed was short term financial firefighting was needed for far longer than expected. A simpler decision would have been to let the organisation burn. Instead we did all we could to keep the service running and the staff employed, despite the strain this placed upon us all. 

The strategy was simple - pay the most pressing bills and delay the rest even though this meant breaking rules. We clung on through another busy winter as the tender process finally took place. With the announcement we had won the multimillion pound contract, I left the organisation relieved though exhausted and with a sense of pride at what we had achieved. The organisation was solvent, just, and with quarterly payments coming in and an activity based contract about to be signed, I hoped the debt would soon be cleared. 

The debt was not cleared and the new contract was never signed. Costs continued to exceed income so it was only a matter of time before the organisation went into liquidation. I was heartbroken that something we had spent 12 years building which was highly valued by many within the local community should be lost within a few months.

The Insolvency Service first got in touch a year later. They said no decision about directors disqualification had been made and naively I took little notice as I had never been a director of the company and presumed their interest was only with those who had been.  

The investigation continued with repeated requests for additional  information. I cooperated fully but as time passed I realised I was becoming their main focus.  I had never heard of a de facto director and as an employee who had been performance managed by the executive directors I never thought I could be held personally accountable for implementing board decisions. Throughout this period I felt very isolated and increasingly embattled. 

Their conclusion seemed to be that I was largely responsible for unpaid pension arrears and for the subsequent liquidation of the company.  I struggled to understand this because I had left the organisation more than seven months earlier. In addition the arrears ended up being double the deficit at liquidation, presumably because of costs incurred through the insolvency process. 

I was shocked when I received notice I was to be taken to court for disqualification proceedings to begin.  They believed that I had acted as if I was a director and was therefore largely responsible for all that had happened. This was at odds with my experience for although I was a member of the board I was not the decision-maker.  I am aware that a chief executive being a de facto director has recently been successfully challenged by the former CEO of Kids Company. 

I was told I could fight the case but was unlikely to win and if I lost could be liable for the costs of both sides, which could be considerable. I was given the option of signing a voluntary undertaking which would mean accepting their account of events.  I felt I had no choice but to sign. 

My disqualification lasted six years and in addition to not being a company director I was also unable to hold any senior management role which influenced the direction of a company or public sector organisation.  I accepted and fully complied with the terms of this voluntary undertaking and it changed the course of my life.  

There is a Companies House register of those who are currently disqualified and my name was removed as soon as the period expired. This suggests that once the disqualification period is over the authorities regard the matter as closed and are willing to let people move on with their lives. While no official records are publicly accessible once the disqualification is over, press articles written at the time remain forever on the internet.  

Two years after my disqualification ended I put myself forward for election to the board of a national charity.  I knew they would carry out due diligence so when my nomination was accepted I assumed my former disqualification was not an issue. I was elected on to the board and was made to feel welcome. A few months later colleagues became aware of my former disqualification and responded both to the story as reported and my decision not to inform them.  While I recognise their questions as legitimate, revisiting this period of my life in this way has been traumatic and the fallout from this continues for me. 

This is a story I am very willing to tell if people are prepared to listen. This is not a story that can be told in a few lines and despite the final chapter I remain very proud of what we achieved.  I have been held to account for decisions made a dozen years ago. I wonder how much longer I will have to atone for this and if this will forever cast a shadow over everything else I might still have to give?

My plea is for those who have been through similar experiences not to allow whatever choices, mistakes or errors of judgement they might have made to define them.  I would also hope that anyone coming across colleagues with similar histories will take the time to reflect on the full story, try to place it within the wider context and not draw quick conclusions about people who with the best intentions have had to make tough decisions in difficult times. 

​© 2021 Michael Golding