Carillion plc
Carillion Collapse
Estimated impact: £7B in liabilities; 43,000 jobs at risk
UK construction and outsourcing giant Carillion collapsed with £7B in liabilities and a pension deficit of £2.6B. The board continued paying dividends and awarding bonuses while the company was insolvent, using aggressive accounting to delay recognition of contract losses.
Decision context
Whether to continue bidding aggressively on low-margin government contracts and paying dividends despite deteriorating cash flow and mounting contract provisions.
Biases present in the decision
Toxic combinations
- Optimism Trap
- Sunk Ship
Reference class base rates
Across all 146 curated case studies in our library:
Lessons learned
- Optimism bias in contract accounting delayed loss recognition until positions were irrecoverable
- Paying dividends from a cash-negative company is a framing effect that signals health while destroying value
- Government procurement that selects the lowest bidder without assessing contractor financial resilience creates systemic risk
Source: UK Parliament Joint Inquiry into Carillion, HC 769 (2018) (Case Study)
See what we'd flag in your next strategic memo.
Upload a strategic memo or board deck. Get the same bias audit you just saw for Carillion plc, on your own high-stakes call, in under 60 seconds.
Or leave your email, we'll run a strategic memo of your choosing and send the readout within a business day.
Ready to audit your own memo right now? Create a free account →