An independent review into Persimmon’s culture and building practices has criticised the UK’s largest housebuilder over issues such as “excessive” renumeration and the lack of a group build policy.
The report, which was led by Stephanie Barwise QC of law firm Atkin Chambers, concluded:
“Persimmon’s culture must change: in a changing regulatory environment, Persimmon cannot afford the stigma of a corporate culture which results in poor workmanship and a potentially unsafe product.”
Shares in the company fell over 3.5 per cent today after the findings were published.
One issue that came in for particular criticism in the review, which was prompted by complaints about the quality of the firm’s building work, was that of the incorrect installation of cavity barriers.
The report concluded that this was the”manifestation of a nationwide systemic problem” that Persimmon does not have a group build policy.
The review goes on to suggest that the firm needs a total overhaul of its “purpose and ambition” if it wished to be a “builder of quality homes.”
It added that Persimmon, which has traditionally been “a houseseller rather than a housebuilder”, needs to develop a rigorous build process which goes beyond achieving a four or five star Home Builders Federation rating.
On renumeration, it concluded that the company’s policy should be “consistent with its purpose and strategy, and the culture it is seeking to foster.”
The firm should consult with a renumeration specialist after the board has reconsidered Persimmon’s purpose, it added.
Persimmon came in for fierce criticism after details of former chief executive Jeff Fairburn’s $100m bonus package were revealed.
The review acknowledged that the homebuilder had begun to take positive steps, including introducing a retention scheme and changing its processes.
Chairman Roger Devlin said: “This review – and the seriousness that we attach to its detailed findings – is an important moment for Persimmon as we continue to build a different business with an increased focus on our customers and wider stakeholders – becoming a business that prioritises purpose as well as profit.”