Khan and Haynes 1

The role of corporate governance failure in the Grenfell Tower fire.

Noor-ul Muzamil Khan, Barrister

Paul Haynes, Royal Holloway, University of London

Abstract

The capacity for crisis perception and to foresee risk is central to project
management where responsibility for safety is a central component informing
decision making. This article1 examines the absence of this capacity as a cause and
consequence of corporate governance failure. The example of the Grenfell Tower
fire is used to illustrate the multiple inflection points within governance structures
where relatively minor errors of judgement or inattention to detail individually or
collectively undermine their shared purpose. The consequences of minor deficiencies
include the risk of compromising the governance framework, misaligning stakeholder
objectives, normalising miscommunication, mismanagement and neglect,
institutionalising discrimination and, ultimately, eroding the protection measures
required to prevent catastrophic events.

1. Introduction
In the early hours of the morning of 14th June 2017 a fire broke out in one of the fourth-floor
flats at the recently renovated 23 storey tower block at Grenfell Tower, part of the Lancaster
West Estate, a social housing complex of almost 1,000 homes. The fire spread quickly, but
within six minutes fire crews from the London Fire Brigade arrived to tackle the blaze. By
the time the blaze had been extinguished 72 residents were dead and an additional 70 others
were injured. In total, over 250 fire fighters supported by 70 fire engines fought for over
seven hours to control the blaze and helped 223 residents to evacuate from the worst
residential blaze experienced in the UK during peacetime since the nineteenth century
(MacLeod, 2018). Following the fire, The Grenfell Tower Inquiry (The Inquiry), was
established. Phase 1 of the Inquiry was concerned with the cause and origin of the fire and the
spread of the fire, reporting its findings in October 2019. The terms of reference of this phase
of the Inquiry are to: determine the cause of the fire; assess the design and construction of the
building; and, examine the decisions relating to the management of the building. Phase 2 of
the Inquiry resumed on 28th January 2020 and will focus on the building’s refurbishment and
external cladding. The focus of the Inquiry therefore examines key issues related to the
responsibility for maintaining the safety of the building and the residents. In contrast, the
focus of this article is to examine corporate governance failure itself as a contributing factor
in the fire. This is not to diminish the responsibility of the Kensington and Chelsea Tenant
Management Organisation (KCTMO), Royal Borough of Kensington and Chelsea (RBKC),
and other key organisations and individuals in their duty of care in the management and
maintenance of Grenfell Tower, but to examine how sources of governance failure emerge
within complex assemblages as a consequence of underestimating the importance of robust

1
The authors are not connected to and have had no involvement with the ongoing Grenfell Tower Inquiry. The
terms of reference of that Inquiry are particular and distinct. This article was prepared independently and is not
intended to influence the Inquiry or its findings.

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Khan and Haynes 2

role performance support and engagement with perspectives representing the diversity of
interests constituting the assemblage.

2. Corporate Governance
This article explores the role that corporate governance had in ensuring the safety of the
residents at Grenfell Tower and how corporate governance failure contributed to the events of
14th June 2017. This is therefore a very different focus from the remit of the Inquiry,
although it relies on sources of evidence developed in the course of the investigation into the
fire. To understand the nature of corporate governance and its failure, a number of
clarifications need to be made.

The focus of effective corporate governance is primarily to maintain coherence and enable
organisational sustainability. The Cadbury Report (1992) reinforces this emphasis in
defining corporate governance in the following way:

Corporate governance is the system by which companies are directed and

controlled. Boards of directors are responsible for the governance of their
companies. The shareholders’ role in governance is to appoint the directors
and the auditors and to satisfy themselves that an appropriate governance
structure is in place. The responsibilities of the board include setting the
company's strategic aims, providing the leadership to put them into effect,
supervising the management of the business and reporting to shareholders on
their stewardship (Cadbury Report, 1992: 14)

A decade later, the OECD provided the following complementary evaluation:

Corporate governance involves a set of relationships between a company’s

management, its board, its shareholders and other stakeholders. Corporate
governance also provides the structure through which the objectives of the
company are set, and the means of attaining those objectives and monitoring
performance are determined. Good corporate governance should provide
proper incentives for the board and management to pursue objectives that are
in the interests of the company and its shareholders and should facilitate
effective monitoring (OECD, 2004: 11)

Both the Cadbury report and the OECD definitions imply that appropriate structures should
be in place. Management occurs within such structures as defined by the governance
structures. In most case this suggests that of prime importance for effective governance and
management is the role of a governance framework as a tool for providing structure for
delivering appropriate decision making and oversight. The framework enables effective
governance by identifying and addressing governance risk. A framework also provides a
more cogent construct for evaluating how management’s responsibilities fit with the board’s
oversight responsibilities. The basis of an effective governance program is centred therefore
on effective risk management. The governance framework provides clarity in defining the
role of the board and management, delineates duties, helps prevent duplicated efforts and
helps to identify potential blind-spots at critical inflection points. A framework can also
assist with the execution of the board’s core processes by providing structure to policies and
tools (annual calendar, meeting agendas, committee charters, guidelines, etc.). This allows
the board to focus on the relevant and appropriate issues and properly prioritize its (limited)
time and resources. In addition, a framework provides the board with a structured way to
collaborate with management on specific issues that the company faces, with minimal risk of

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confusion and loss of productivity. In addition, a framework can help to clarify each board
committee’s roles in fulfilling the board’s objectives from a governance perspective.
When conceptualised this way, a corporate governance framework can be perceived as
systematic approach to prevent failings by identifying inherent risks and addressing collective
actions to mitigate these risks. The corporate governance framework is thus designed to
manage and reduce the effect of those potential risks, ‘second-guessing’ or foreseeing
negative outcomes or potential threats, in contrast with a prosecution framework, which
tackles situations that have occurred.

While corporate governance is seen as necessary for the effective operation of complex
organisations, there are a number of assumptions underpinning this theme that need to be
unpacked if a critical account of the conditions under which organisation breaks down is to
be determined. These relationships can be examined using a variety of conceptual
frameworks and this article synthesises three key perspectives in examining the conditions of
corporate governance failure within the network of stakeholders constituting Grenfell Tower
as an assemblage. Foucault’s Theory of Governmentality (1991) will be used to explain
features of compliance; Stakeholder Theory will be used to identify the variety of roles and
(often non-aligned) interests constituting the Grenfell assemblage; and, Agency Theory will
be used to examine the tension between the priorities of key stakeholders and the courses of
actions informed by these tensions. This synthesis will contribute to an explanation of why
KCTMO was created, constituted and populated with its defining characteristics, and the role
and expectations of KCTMO as a mediator between stakeholders, in particular, between the
owners and residents.

3. Governmentality Misassembled
Synthesising these perspectives requires attention to the inflection points in each perspective.
In his theory of governmentality, Foucault examines the techniques and responses to
governance. Governmentality, in this sense is seen as “the art of government” and includes a
variety of control techniques from the shaping of the self to the biopolitical control of
populations. Foucault’s approach to governmentality is helpful in explaining the emergence
of rules, their negotiation and implications through the lens of power and interests. For
Foucault, ‘government’ is not a set of institutions, which Foucault stipulates as ‘governmental
apparatuses’ but is instead a specific type/form of power. Governmentality describes how the
object of governing power is to foster a sense of membership to a population assemblage. In
this sense, to analyse government is to analyse the mechanisms that shape, structure and
mobilise the choices and desires following through the population.

Two key characteristics of complex organisational interdependency within this shaping

process is the nature of the relationship between different constituencies of organisations,
both internally and externally, and presence of conflict between these components. The first
of these features can be examined through stakeholder theory or ‘theories’ (see Miles, 2012).
Stakeholder theory highlights the way business decision making considers the distinct
interests of a variety of internal and external stakeholders (employees, shareholders,
communities, customers, trade unions, regulators, suppliers, competitors, etc.). With
stakeholder theory, the difference in the priorities of different groups and interests provides a
number of challenges. Aligning distinct groups or attempting to build consensus where
competing interests are observed, represents a tension which can impact on all aspects of an
organisation. Where the aims of different interests within an assemblage of stakeholders are
in conflict, corporate governance can be compromised and organisations can unravel.
Problems can be minimised through regulation, policy, effective monitoring or incentive

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structures to align interests or enable compensation opportunities. Bonazzi and Islam (2007)
conclude, however that there is no consensus over what constitutes an effective corporate
governance mechanism able to induce agent alignment among the candidates commonly
examined within the literature. Indeed, while there are established strategies able to address
conflicting interests, emerging issues centred on the need to address exclusion and under-
representation provide new ways to realign interests and build consensus, but also represent
new sources of potential conflict, with implied challenges (see also Farag and Mallin, 2017).

Tenant management organisations (TMOs) represent a type of organisation for which these
challenges are most acute, and their proliferation as part of a new public management
approach to services was not matched by coherent mechanisms to address conflicting
interests. As Cornforth (2003) observes in relation to such organisations, their structures
were premised on an indifference to democratic legitimacy or representativeness, and on an
unrealistic expectation of their effectiveness, in particular to supervise senior managers,
ensure probity or protect the interests of those that are most impacted by decisions but are
least able to challenge them. In a similar way, Hayden (2006) noted with the healthcare
sector in USA, governance structures fail in monitoring and supervising management if the
boards are dominated by members that are not fully committed to the organisation’s mission
and financial viability.

Despite the need for considerable oversight and the potential risk, the UK government was
keen to encourage more TMO’s and in the late 1980s and early 1990s changed the rules to
make setting up TMOs quicker and easier. The benefits were that TMOs empowered tenants,
and generally recorded higher tenant satisfaction scores than councils. It is within this
context that KCTMO was incorporated in 1995, set up under the UK Government's Housing
(Right to Manage) Regulations 1994, nominally to allow tenants and leaseholders to take on
responsibility for housing management. Resident members were tasked with creating an
independent legal body and elect a committee to run the organisation, which is paid a
management and maintenance allowance by the social landlord. Juliet Rawlings, chair of
KCTMO, said that getting involved in managing housing in this way was hard but rewarding,
reducing bureaucracy and increasing engagement. In this way, KCTMO was regarded, like
other TMOs, as a way to give tenants control over their homes and local environment, while
the Council was able to delegate responsibility for the building to a separate legal body.
KCTMO was the largest such organisation in the UK and unique in having been the only
TMO that managed the entire housing stock for the local council. It assumed management of
9,760 properties from the Council, one of the UKs most ambitious schemes of its type. This
scale of responsivity for an organisation comprising just 13 tenants was overwhelming and
contentious. Prior to the fire, Grenfell Action Group, the block’s tenant organisation, had
repeatedly warned of major fire safety lapses since 2013. A blog entry posted on 20
November 2016, described KCTMO in the following way:

We believe that the KCTMO are an evil, unprincipled, mini-mafia who have
no business to be charged with the responsibility of looking after the everyday
management of large scale social housing estates and that their sordid
collusion with the RBKC Council is a recipe for a future major disaster.
Unfortunately, the Grenfell Action Group have reached the conclusion that
only an incident that results in serious loss of life of KCTMO residents will
allow the external scrutiny to occur that will shine a light on the practices that
characterise the malign governance of this non-functioning organisation.
(Grenfell Action Group, 2016A)

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This conclusion had been reached after a number of conflicts and confrontations between
Grenfell resident’s representatives and KCTMO. This includes a meeting in January 2016, in
which residents presented the findings of a survey which found that 68% of Grenfell residents
had felt harassed or intimidated by the KCTMO or its contractors, and that 90% were
dissatisfied with the manner in which improvement works had been carried out, and reports
of significant concerns about the safety of the building (see Grenfell Action Group, 2016B).
Such conflict, which characterised the relationship between KCTMO and residents
associations such as Grenfell Action Group for many years, indicates that the original
purpose and justification for creating the TMO had been undermined by the scale of
responsibility and the misalignment between the interests and contradictory decision-making
priority focus by key stakeholders. It also represents governance failure, as exemplified
through inappropriate decision making processes applied though public sector intervention,
but, more importantly, across multiple facets: knowledge failure, capacity failure,
implementation failure, motivation failure and, ultimately, a failure of legitimacy. In the case
of KCTMO, the corporate governance framework required considerable resources from each
facet to address the complex role of protecting residents. Instead, the limitations within one
facet diminished the resources within other facets, with the role of the organisation no longer
matched with its competencies, including oversight features designed to identify and monitor
potential resource deficits, stakeholder conflict and other decision-making blind spots. As
Stone and Ostrower (2007) indicate, it is not merely sufficient to focus on the activities of the
board of directors in a non-profit organisation, but requires a deep understanding of the
board’s relationship with the various roles performed by other stakeholders in maintaining the
organisational structure. Their research findings indicate that the composition of the board
and the relationship between the board and stakeholders are key factors in the effectiveness
the board. The difficulty evident from the results of the Inquiry so far is that details about
how the KCTMO board was constituted and controlled was not premised on appropriate
stakeholder engagement in effectively meeting appropriate objectives, but is entirely lacking
in transparency, coherence or alignment with relevant objectives. Indeed, as Van Puyvelde et
al. (2013) demonstrates, once the interests of owners and managers diverge, it becomes
increasingly difficult to identify the way in which the roles of different agents change in
relation to an organisation. When the behaviour of the agent is not monitored or maintained,
gaps in responsibility emerge, and in cases such as Grenfell, with catastrophic consequences.
As Miller’s research indicates, the monitoring role of a board, needs to recognise the potential
for self-interest; provide consensus on accountability for the organisation; and, have a clear
understanding of the variety procedures and services of each organisational unit and the chain
of responsibility throughout the organisation encompassing procedures and services (see
Miller, 2002; Heffron and Haynes, 2014)

4. Corporate Governance Failures

As stated earlier in this article, a corporate governance framework is designed to provide the
public with confidence that their interests are paramount and are protected. In addition, a
framework should also act as a ‘boundary object’ with which to build communication
between different stakeholders (and their ‘lifeworlds’) and as a shield for a company to
foresee risk and to protect itself from prosecution or litigation. The following features are
therefore general requirements for organisations such as TMOs to function in accordance
with the characteristics outlined by Miller (2002) as outlined in the previous section:

i. Governance: The board establishes structures and processes to fulfil board

responsibilities. These reflect stakeholder roles and responsibilities and are
aligned with company strategy.

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ii. Strategy: The board advises management in the development of strategic

priorities. The board also actively monitors management’s execution of approved
strategic plans as well as the transparency and adequacy of internal and external
communication of strategic plans.
iii. Performance: The board reviews and approves company strategy, annual
operating plans and financial plans. It also monitors management execution
against established budgets as well as alignment with strategic objectives of the
organization.
iv. Integrity: The board sets the ethical tenor for the company, while management
adopts and implements policies and procedures designed to promote both legal
compliance and appropriate standards of honesty, integrity and ethics throughout
the organization.
v. Talent: The board selects, evaluates and compensates senior decision makers and
oversees aspects related to executive leadership and succession strategy. The
board communicates such decisions in a clear manner.
vi. Risk governance: The board understands and appropriately monitors the
organization’s strategic, operational, financial and compliance risk exposures, and
it collaborates with management in setting risk appetite, tolerances and alignment
with strategic priorities (see also Too and Weaver, 2014)

In linking these features to the definitions cited earlier, good governance is therefore not
limited just to concerns with compliance. Boards need to balance compliance with
legislation, regulation and codes of practice with performance, aspects of the board’s work,
namely performance, strategy and policy making. As a part of this process, a board needs to
elaborate its position and understanding of the major functions it performs as opposed to
those performed by management. These specifics will vary from board to board. Knowing
the role of the board and who does what in relation to governance goes a long way towards
maintaining a good relationship between the board and management. Ultimately, in the case
of Grenfell Tower the overriding objective of the corporate governance framework should
have been to keep residents safe. Ethical structures, such as the Nolan Principles, would’ve
helped to provide a position on ethical conduct and emphasise considerations for
responsibility or oversight in cases where a board has control of the processes and
compliance. Each of the organisations that was involved in the management and
refurbishment of Grenfell Tower was subject to a specific professional regulatory framework.
The architects are regulated by the Architects Registration Board (ARB), which is the
statutory body for the registration of architects in the United Kingdom. Kensington and
Chelsea Council is regulated by The Local Government and Social Care Ombudsman is a
service that investigates complaints from the public about councils and some other bodies
providing public services in England. Each is subject to the criminal law. To understand
these relationships, more detail about the nature of the Kensington and Chelsea Tenant
Management Organisation is required.

KCTMO is a non-profit company, so all profits after costs such as salaries and taxes are
channelled back into investment. The framework applies equally to KCTM as it would to a
profit-making organisation. Rather than being responsible to shareholders, it is responsible to
the residents of the building. The company's board consisted of eight residents, four council-
nominated and three independent board members. The four managers at the firm responsible
for the safety and the maintenance of Grenfell Tower shared more than £650,000 pay
between them last year, it has emerged, they include Robert Black, the company’s Chief
Executive, Barbara Matthews, the Executive Director of financial services and IT, Yvonne

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Birch, the Executive Director of People and Performance and Sacha Jevans, the Executive
Director of Operations. Each of these individuals had a specific role on the board of
KCTMO. Responding to criticism that residents had raised safety concerns in the past, the
KCTMO said in a statement, after the fire: “We are aware that concerns have been raised
historically by residents. We always take all concerns seriously and these will form part of
our forthcoming investigations. While these investigations continue with our co-operation,
our core priority at the moment is our residents”. The multiple failings highlighted above and
which the Inquiry has identified as a contributing factor to the fire shows that there was no
consequence for KCTMO when it failed to meet its obligations under the framework
demonstrating that residents were not their core priority. One such failing emerged in
evidence presented at the Inquiry showing that KCTMO opted for cheaper, less fire-resistant
cladding in order to make a saving of less than 4% of the final cost of refurbishing the
building. Contractors working for Kensington and Chelsea council were asked in 2014 to use
aluminium cladding instead of zinc to save almost £300,000. The wider refurbishment cost
was £8.6m. From June and July 2014, Grenfell Tower refurbishment consultants Artelia UK
were pressured to reduce costs by the Council. The cost-cutting drive is inconsistent with the
Council’s “usable reserves” of £300m in its 2015-16 accounts. KCTMO was paid £11
million by the council in 2016 to manage 10,000 homes in the borough, including Grenfell
Tower. It later emerged that the Council had been repeatedly warned about the danger of
“cost cutting” during the tower's refurbishment in 2016, which saw the installation of the
combustible cladding panels to improve the look of the building and provide more insulation.
Residents’ concerns over fire safety were said to have been largely ignored. KCTMO also
managed Adair Tower, a 14-storey block of flats where a fire broke out in October 2015 after
an arson attack. Some residents were treated for smoke inhalation, but nobody was seriously
hurt. In the wake of that incident, the London Fire Brigade performed an audit and issued the
KCTMO with an enforcement notice to improve fire safety in the escape staircases of both
Adair Tower and next-door Hazelwood Tower, as well as provide self-closing devices on all
flat front doors.

Such failures were not a new phenomenon, but part of pattern of governance failure, as
indicated in the evidence and findings in the early stages of the Inquiry. In 2009 there were
reports that more than 70% of social housing residents under the responsibility of KCTMO
reported unresolved repairs or maintenance issues. At that time, the Council had been made
aware that KCTMO had unacceptable levels of unresolved complaints against it and the
Council thus felt compelled to intervene directly. They did so by placing KCTMO under a
‘Supervision Order’, which is the most serious action they could have taken, short of
dissolving entirely the Management Agreement under which the TMO functioned. KCTMO
had also been ordered to submit to the Council an approved ‘Improvement Plan’ which they
were required to implement satisfactorily within a strictly limited timeframe. All of this was
in line with the emergency procedures written into the Management Agreement under which
the TMO functioned, and which were intended to be used when all other attempts at remedial
action failed and KCTMO was deemed by the Council to be in breach of its management
duties under the Agreement. KCTMO also undertook a root and branch reform and
reorganisation of its systems, notably its repairs reporting, response and monitoring systems.
The problems that had bedevilled the organisation were supposedly resolved and the
KCTMO was again given a clean bill of health by the Council. The Council undoubtedly has
a wide remit and relies upon intermediaries to identify appropriate courses of action, but
within this context KCTMO’s priorities and decision making seem entirely at odds with a
fitting role for such an organisation. The evidence emerging from the Inquiry strongly
suggests that KCTMO’s priority was reducing the cost of refurbishing the building when

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their priority might’ve been expected to have been focussed primarily on the safety of the
residents.

Even before such evidence was presented, action was taken to address the perceived failure
of KCTMO to anticipate or address safety concerns. In August 2017, two months after the
fire, it was announced that KCTMO would no longer manage the Lancaster West Estate
containing Grenfell Tower, which would come under direct council control. In September
2017, Kensington and Chelsea councillors voted unanimously to end the contract with
KCTMO, stating that the firm no longer has the trust of residents in the borough. In late
December 2017, KCTMO announced that it would be handing control of all of its housing
stock back to the Council by 31 January 2018 as an interim measure.

5. Discussions and Conclusion

When a catastrophic event occurs, it is generally too simplistic to attribute blame to a prime
cause or specific event. Typically, a chain of events leading to the catastrophe is triggered by
a breakdown within a structure as an active failure. In the case of Grenfell Tower, it is
possible to identify the fire in one of the flats caused by a faulty fridge/freezer as the ignition
source. It is understood that fires are statistically calculable occurrences; however, the extent
of the fire that followed the initial source and the difficulty in accessing the building and
saving lives is being attributed to failures by KCTMO to properly manage the safety of the
building related to a wide variety of governance failure sources, not least on its focus on a
series of cost reductions rather than more precautionary measures, a lack of engagement or
apparent concern with other stakeholder groups, and more general factors of institutional
prejudice. TMO’s were created and promoted by Government as a way of giving residents
autonomy over their homes, but in addition to managing the housing stock, KCTMO was
tasked with safeguarding residents and a responsibility for the refurbishment of buildings and
engaging with residents about their concerns, tasks for which there was considerable scope to
achieve with minimal attention to detail or timely accountability. The TMO should have
been the conduit for residents to raise their concerns about how the buildings were managed,
but there is considerable evidence that KCTMO’s purpose and objectives had been
compromised long before the fire made this apparent.

A plausible explanation for the careless attitude towards establishing effective oversight
measures is that prior to the KCTMO being set up, the local authority had in place a suitably
established system for managing properties employing dedicated individuals (civil servants)
with a clear understanding of their role. The individuals appointed to these roles had key
performance indicators, which were clearly defined. Their role and work responsibilities
meant that there was little scope for compromising on safety and such roles were free of
political influence. The knowledge accumulated through previous arrangements was not
retained with the establishment of KCTMO, while priorities changed, partly through the
perception that tenant involvement conferred sufficient legitimacy on decision making, partly
as the priorities of the management team changed and partly because of the increased scale of
responsibility delegated to a small and inexperienced organisation (see Haynes, 2011). The
initial findings of the Inquiry have shown that the KCTMO board members had little or no
experience in running large management projects and as a result little ability to recognise the
potential problems that might occur if safety was compromised. There is an established
consensus in research to suggest that crises are not random and unpredictable acts for which
organisations cannot prepare. Instead, the key issue, when considering events such as the
Grenfell Tower fire, is the ability of those with responsibility act to take remedial or
preventative action through an appreciation that something needs to be changed, particularly

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by learning lessons from relatively minor but statistically much more frequent failings, or
through communication with a diverse range of stakeholders, or established practices of
organisational cognition (see, for example, Weick et al., 1988). KCTMO appears to have
lacked systems of communication, assessment or cognition about the potential risks of
outdated information, minimising safety in relation to cost in decision-making, a lack of
foresight in safety planning and decisions and priorities based on a narrow – and
unrepresentative – range of opinions. These opinions include the views of cladding suppliers,
inexperienced technicians and architects, for example, but these represent the views of
interested parties in assessing the safety and robustness of the systems and materials. As the
Inquiry’s counsel for the bereaved and survivors, Adrian Williamson observed, such
businesses pushed hazardous products, which were marketed dishonestly, often with little
critical assessment of their claims. In considering resident safety as the primary focus of
procurement and building modification, it would of course have been prudent to examine
what would be compromised in using cheaper materials and in implementing systems not
properly tested, lacking in redundancy and responsibility demarcation or poorly
communicated among key stakeholders. KCTMO was set up after a deliberate strategy by
the Government to create TMOs and was designed to give Councils and residents greater
autonomy and therefore control over their living environments. This was done, however,
without the appropriate governance structures established within the new organisation, the
board, or other relationships implied by a change of organisational responsibility, and in
particular without adopting robust procedures for the purpose of ensuring the safety of
residents.

Formal risk management systems provide a dominant and pervasive logic for governing an
uncertain social world (Power, 2004). Such systems have expanded into areas where
previously there was less formal self-regulation, which includes self-regulation by
professionals. They have proliferated in UK government, regulatory agencies and other
public services since the 1980s (Power, 1997; Power, 2004). These systems held the promise
of dealing with potential hazards as what begins as a mere possibility of danger is converted
into calculable objects of surveillance, regulation and control (Castel, 1991; O’Malley, 2004;
Power, 2007). This is evident in the way that regulatory bodies, the legal profession, Police,
etc., have changed their processes for regulation, becoming judicial based and, in many ways,
more formal. Risk management is perceived to provide objectivity against local values,
emotions and practices concerning social transgressions, rule-breaking and deviancy. Formal
risk systems may also involve ‘cleaning-up’ accounts for presentation to external auditors;
they may encourage individuals to hide malpractice, ‘game’ reporting systems and undermine
corrective learning (see Gabe et al., 2012; Iedema et al., 2006; Waring, 2009; McGivern and
Ferlie, 2007; McGivern and Fischer, 2012). Risk may function above all as an ethical
construct in which the selection, handling and elaboration of risk functions to protect
authoritative moral orders against risk management regimes meant to uphold them (Douglas,
1992). According to this ‘risk as moral government’ perspective, risks are not just
philosophical constructs, but social constructions where omissions, wrong-doing and blame
are attributable to persons held accountable (Douglas, 1992; Luhmann, 1993) and the failure
to consider risk leads to drastic consequences. Phase 1 or the Inquiry has been completed,
with a four-volume report making 46 recommendations, focussing on providing a more
joined up approach to fire prevention or producing redevelopment guidelines. Phases 2 of the
Inquiry has yet to report but will focus on the refurbishment, including the testing and
procurement of external cladding, and the management of Grenfell Tower, including
communication with residents and other complainants. Only then will the extent of
governance failure be clarified and in the event that a criminal investigation following the

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Khan and Haynes 10

evidence assembled in Phase 2, a more detailed assessment of the extent of inappropriate

behaviour by KCTMO, and a broader sense of governance failure will be open to a full
assessment.

These details are crucial as one of the defining characteristics of crises is that small failures
become linked and amplified (see, for example, Weick, 1988). As detailed earlier, the extent
and variety of failings identified in Phases 1 of the Inquiry indicates numerous and multiple
failures in the management and control of the building. KCTMO is unlikely to have been
able to foresee, for example, that merely choosing the cheaper cladding would have directly
led to a catastrophic fire. The choice of cheaper cladding was, however, only a one episode
within the chain of events ultimately leading to the catastrophe. The Inquiry has established
that cladding choice was just one of the large number of poor decisions taken by KCTMO
and highlighted the numerous and multiple failures by KCTMO to prioritise safety at
Grenfell Tower, from ignoring legitimate safety concerns to the failure to comply with the
health and safety regulations in the design and refurbishment of the building.
The application of the corporate governance framework by KCTMO should have been
sufficient to protect the residents at Grenfell Tower because the framework has as its primary
focus, the safety of residents and, as such, enables lessons to be incorporated from incidents
and the identification of blind-spots in safety planning. Governance failure occurs when
lessons are overlooked, concerns unheeded, risks unnoticed and safety deprioritised and
compromised (see also Heffron and Haynes, 2011). In addition, the corporate governance
structures that exist in any professional environment are not fixed but must be considered
dynamic and constantly adapting configurations.

Phase 1 of the Inquiry looked at how the ignition source and the pre-existing latent conditions
combined to create to sequence of events resulting in the disastrous consequences that
occurred. But it is necessary to go back and consider the circumstances that existed prior to
the fire starting because once the fire started KCTMO as an institution and a decision-making
body became implicated in catastrophic safety failure at Grenfell Tower. The plethora of
regulatory frameworks in place were designed to ensure that processes and procedures are
followed. In effect, this means that practitioners in any field fully comply with the regulatory
framework so that they can continue to practice. Corporate governance is necessary for the
effective operation and compliance responsibilities of an organisation, and a governance
framework ensures that individuals take responsibility for meeting the objectives associated
with compliance, such as safety. Phase 1 of the Inquiry has identified different failings at
many different levels by many different parties: KCTMO, the manufacturers of the cladding,
contractors, architects, the London Fire Brigade, the Royal Borough of Kensington and
Chelsea, the local authority, etc., representing a collective failure in their duty of safety. The
remit of such an Inquiry is to determine what happened and what can be done to prevent the
event occurring again. Lord Shutt, Chair of the committee on the Inquiries Act 2005 – an
inquiry into inquiries – noted that each new inquiry is carried out as though previous ones had
never happened, rather than part of a continual learning process in improving corporate
governance frameworks.

The Grenfell Tower fire has become an iconic symbol of the catastrophic events that can
occur if there is a failure of corporate governance. It is important to remember that corporate
responsibility encompasses the duties and responsibilities of corporations but such duties are
the responsibility of a variety of social actors and not merely focussed on codes and reporting
procedures. It is true to say that lessons have been learnt, as evidenced by steps having been
taken to remove sub-standard cladding and safety checks are being conducted at all high rise

Electronic copy available at: https://ssrn.com/abstract=3783861

Khan and Haynes 11

buildings across the UK. In May 2020, the Government announced a £1bn fund to assist with
replacing unsafe cladding, increased to £3.5bn in February 2021 (Booth and Walker, 2021),
and yet it is unlikely that the lessons of governance failure that led to the choice of poor
redevelopment, inappropriate safety standards and the procurement of unsafe cladding have
been learnt. As Mark Townsend reported in July 2020:

Meanwhile, unease continues to grow over the role of the RBKC in

administering the £50m budget to assist the long-term recovery of the
community. The five-year plan was designed to help survivors, bereaved and
the wider community rebuild, but critics claim vast amounts have been spent
with little oversight or impact. (Townsend, 2020)

The authors (Khan & Haynes) are not connected to, and have had no involvement with, the
ongoing Grenfell Tower Inquiry. The terms of reference of that Inquiry are particular and
distinct. This article was prepared independently and is not intended to influence the Inquiry
or its findings.

Electronic copy available at: https://ssrn.com/abstract=3783861

Khan and Haynes 12

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