Our progress - Governance
For Serco, governance is not an exercise in compliance, nor is it a specific form of management. It is an essential part of our public service ethos and how we manage our impact as a public company – seeking to protect shareholder interests by managing our business in a way consistent with the broader interests of society.
We strive to achieve this through our commitments to:
We focus as much on the preservation and growth of the business as on the maximisation of shareholder value. We believe that in a free market system, and in the long term, the two will automatically coincide, even if there is some short-term divergence. Delivering sustainable, profitable growth is therefore central to appropriate delivery of shareholder returns, and our performance framework is structured accordingly.
We strive to ensure a balanced performance framework that recognises value must be delivered to our shareholders as well as customers and employees; align remuneration and incentive arrangements to long-term, sustainable value creation; and achieve our purpose of becoming a trusted partner of governments, delivering superb public services that transform outcomes and make a positive difference for our fellow citizens.
We recognise that meaningful engagement with our shareholders is integral to our success. Our reporting strives to be fair, balanced and understandable – containing the information necessary for shareholders to assess our performance, business model and strategy. Transparent communication requires high-quality management information, which we invest in to ensure we can report appropriately to all stakeholders.
We strive to maintain open, meaningful dialogue with all our shareholders, and use a variety of communication means to update investors on performance and gain insight into shareholder views; provide meaningful insight into our results and prospects; and base our approach to executive remuneration on a clear rationale in which the alignment of interests is recognisable and understandable.
Corporate governance and control
We have a comprehensive corporate governance framework, with clearly defined responsibilities and accountabilities to help safeguard long-term shareholder value. Below this our overarching management framework, the Serco Management System, describes what needs to be done, and by whom, while our Code of Conduct defines how we expect it to be delivered.
We strive to:
maintain an effective system of internal control that ensures we operate safely and ethically and deliver quality services, and that safeguards the best interests of our stakeholders, assets and reputation;
manage our business within an organisational structure where responsibilities and accountabilities are clearly defined and allocated appropriately;
make sure our legal entities comply with relevant laws, properly record all commercial, business and legal transactions and retain material documents, and correctly report their business activities; and
meet our regulatory commitments and obligations per our listing on the London Stock Exchange.
In order to achieve our strategic and business objectives, protect our stakeholder interests and maximise our returns, we seek to identify, manage and mitigate our exposure to risks through robust procedures and controls throughout the organisation.
We strive to embed an Enterprise Risk Management framework throughout the business that will support informed risk-taking that promotes business growth and success; embed systematic, structured and timely risk management in our organisational processes, linked to achievement of our objectives; and be dynamic, iterative and responsive to change.