Thomas Cook - Director magazine

Simon Walker, the IoD’s director general, criticises holiday giant Thomas Cook’s handling of the Bobby and Christi Shepherd case

There is so much our big companies get wrong – often because they are rigid and inflexible, and because they follow the letter rather than spirit of the law. When Bobby and Christi Shepherd died in Corfu after a faulty boiler sent carbon monoxide into their hotel room, the hotel owners paid Thomas Cook, which had arranged the holiday, £3m in compensation. Thomas Cook initially kept quiet and paid the children’s family barely a tenth of that amount before accepting it had blundered and apologising profusely.

When a company is under fire its lawyers often urge silence. If it has suffered commercially – searches for Thomas Cook are down 18 per cent on 2014 – it may feel obliged to cushion the impact on shareholders. But the court of public opinion does not run on the basis of legal niceties, and Thomas Cook’s share price fell more than three per cent when its behaviour emerged.

Those of us who champion business need to be critical when companies mess up. The test of many a backroom decision is: how would this look on the front of the Sun? Warren Buffett said corporate reputation may take 20 years to build, but can be destroyed in hours. There are few more egregious examples.

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