Corporate Governance
The Board of Serco Group plc is committed to achieving high standards of corporate governance, integrity and business ethics for all its activities around the world. Governance is not an exercise in compliance nor is it a specific form of management. For Serco, governance has the clear objective of ensuring the pursuit of the Company's purpose. It is an essential part of our public service ethos.
The Board
Excluding the Chairman, the Board comprises two executive and four independent non-executive directors. Kevin Beeston, the Chairman is responsible for the effective operation of the Board, oversight of corporate governance and assurance activities and our relationship with the City and key stakeholders. The Chief Executive, Christopher Hyman focuses on operational strategy and delivery of the business. The non-executive directors are independent of management and meet informally during the year without the presence of the executive directors.
Board meetings are routinely held four times a year. A third of the Board must retire by rotation each year, so over a three year period all directors will have retired from the Board and faced re-election.
A rigorous evaluation of the Board and its committees.
Board Committees
The Board carries out detailed scrutiny of certain key ares through its standing committees. In addition the Board has appointed Baroness Ford of Cunninghame as a senior independent director as required by provision A.3.3. of the Combined Code.
There are three standing Committees of the Board and two executive Committees:
Standing Board Committees
- Audit Committee: Chaired by David Richardson and which comprises in addition the other independent non-executive directors. The Committee is responsible for the integrity of the Company's financial information and ensures that the financial controls and systems of risk management are robust and defensible. The Committee meets three times a year.
- Remuneration Committee: Chaired by Leonard V. Broese van Groenou and which comprises in addition the other independent non-executive directors. The Committee is responsible for determining appropriate levels of remuneration for the executive directors. The Company's remuneration report is approved each year by the shareholders in general meeting. The Committee meets four times a year.
- Nomination Committee: Chaired by Kevin Beeston and comprising in addition the independent non-executive directors. The Committee has the prime role in appointing and where necessary removing directors, in reviewing their performance and in succession planning. The Committee meets as required.
Executive Committees
- Global Management Board: Chaired by Christopher Hyman and consisting of the the executive directors and divisional chief executives and other senior managers, it is responsible for the day-to-day management of the business. The Board meets formally a minimum of three times a year to review the Company's activities and discuss operational issues.
- Approvals and Allotment Committee: Comprises the executive directors and company secretary. The business of the Committee is varied and ranges from bid and contract approval to the releasing of share options. The level of authority delegated to the Committee is reviewed on an annual basis.
Shareholder relations
We are committed to constant dialogue with institutional and private shareholders, and run a programme of meetings for institutional investors and analysts. The senior non executive director is available to speak to shareholders on request.
The principal methods of communication with private investors are our news announcements, interim report, annual review and financial statements, the annual general meeting (AGM) and this website.
Internal controls and risk management
We have a well-established system of internal controls (including financial, operational and compliance controls) and risk management to safeguard shareholders' investments and the Company's assets and reputation. These processes are reviewed annually and conform to Internal Control: Guidance for Directors on the Combined Code (the Turnbull Report). We have a full time Risk Director who is a member of the Corporate Assurance Group. This group oversees and reviews our internal control and risk management policies, procedures and management framework and develops guidance, training material and management training to meet our current and future needs.
At each level in the organisation we maintain risk registers that identify the key risks, the probability of those risks occurring, their potential impact and the actions being taken to mitigate the risks. Risks are ranked using a scoring system across the business and risk registers and are reviewed at least quarterly. In association with Grant Thornton, we have developed a risk matrix designed to profile relative risk across all our contracts and support functions, ensuring audit focus on the key risk areas as well as an appropriate approach to the rest of the business.