Welcome to Serco.com. Please review the region selection dropdown just below to get the most relevant content to your region.

Managing our CR Framework – policy and governance

Living our Values

Our Values – Trust, Care, Innovation and Pride – are the foundation of our culture, shaping our individual behaviours and hence the way the Company behaves. They help to ensure we are working from a commonly understood base that can be consistently applied across our organisation.

Our Values need to be lived every day, helping us work through any challenges we may face whilst recognising and celebrating our achievements. They guide us in our dealings with colleagues, customers, suppliers, partners, shareholders and the communities we serve.

Our Values are incorporated into the Serco Management System and our Code of Conduct, as well as other channels, publications and resources. For example:

  • Our annual employee engagement survey, Viewpoint, and our premier programme of employee recognition, the Pulse Awards, are aligned to our Values, enabling us to measure Values-based engagement and celebrate Values-based behaviour.

  • Our Values are integrated into our Code of Conduct, Leadership Model and annual Performance and Development Review process, enabling us to clearly define our expectations of Values-based behaviour and ensure they are met. Our bonus payment ‘Values Gate’ enables us to reward performance aligned to our Values.

  • Our Values are also incorporated into our approach to recruitment, enabling us to recruit people who share our desire to make a positive difference and have the capacity and commitment to deliver the services our customers expect.

Alongside our global ethics helpline and investigation process, Speak Up, these elements also enable us to regularly assess and reinforce our culture.

Behaving with integrity and respecting human rights

Our policy and commitment

Our commitment to business ethics and human rights is defined within our Group Ethics Compliance strategy, Business Conduct and Ethics Policy Statement, supporting standards and related operating procedures.

Our human rights policies are guided by international human rights principles encompassed in the International Bill of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the United Nations Global Compact and the United Nations Guiding Principles on Business and Human Rights.

Our anti-bribery and corruption policies comply with the principles of OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, United Nations Convention against Corruption and The United Nations Declaration Against Corruption and Bribery in International Commercial Transactions. As a global business, Serco ensures that its business and staff comply with local laws and regulations applicable in the countries in which it operates, such as the UK Bribery Act, US FCPA and French Loi Sapin (II).

In summary, we:

  • have zero tolerance for corruption and any activities that break any law relating to human rights, either directly or indirectly, anywhere in the world;

  • will not engage in or approve any form of bribery; and will take disciplinary action, and issue criminal proceedings where appropriate, if an employee participates in or condones any irregular payment or payment in kind;

  • will not engage in any form of human trafficking or use forced, bonded, illegal or child labour, nor knowingly work with anyone who does; this commitment recognises all applicable modern slavery legislation;

  • use international human rights standards as a framework to assess, monitor, mitigate and remedy any actual or potential adverse human rights impacts (AHRIs) that may affect our business;

  • provide guidance and support to all employees to help them identify, manage and respond to any risk or issue;

  • maintain confidential reporting resources for anyone concerned about violations of our Values, policies or Code, whilst ensuring there is no need for them to fear the consequences of doing so; and strive to 

  • record and report information about our business accurately, honestly and transparently;

  • compete legally, fairly and ethically, making sure we promote competition in business, protect our customers’ interests and avoid situations that may, or may appear to, create a conflict of interest.

Key components in our governance

  • Our Corporate Responsibility Committee (CRC) provides formal oversight of our Ethics Compliance strategy and its effective delivery against agreed objectives and targets. The CRC, Executive Committee and Divisional Executive Management Teams (EMTs) review quarterly operational and strategic performance reports.

  • The CRC retains time at the end of each meeting to meet separately without management present and invites one of the Divisional Ethics Leads to attend for part of this session. The Committee also meets privately with the Group Director of Business Compliance and Ethics.

  • Our Group Director of Business Compliance and Ethics is responsible for Ethics Compliance strategy design, management and execution and the development and maintenance of associated policy and governance. The Group Director of Business Compliance and Ethics also chairs the Group Ethics and Speak Up Oversight Group (including Divisional Ethics Leads), which meets regularly to discuss strategic and operational performance and share best practice.

  • Divisional EMTs are responsible for appropriate Divisional adherence to policy and standards and managing associated risks, while Divisional Ethics Leads are responsible for implementing policy, strategy and governance across the Division.

  • Depending on the context and scale of any ethical dilemmas or suspected AHRIs, our position will be determined by Divisional EMTs, the Executive Committee, Investment Committee or plc Board.

  • Our Business Lifecycle governance process seeks to enable due diligence, review and oversight of related risks throughout bidding and operations.

  • Our Human Rights Assessment and Decision Tree enables us to evaluate any AHRI caused or contributed to by our operations or linked to them through our business partners and related third parties.

  • Our global ethics helpline and investigation process, Speak Up, is available to all employees, supported by an online case management system provided by an independent third party.

  • Our Divisional Legal Representatives advise on and record competition and anti-trust matters, using legal advisers in accordance with local practice to provide additional advice and guidance on issues relating to competition and anti-trust law and their application.

Safe operations; Managing our environmental impact and supporting customer objectives

Our policy and commitment

We recognise that our commitment to a vision of zero harm is a challenging, long-term aspiration that will take continuous concerted effort if it is ever to be achieved given our operational risks. Our Health, Safety and Environment (HSE) strategies are designed to help clarify our next steps on our journey.

Our commitments are defined within our Group HSE strategies, HSE Policy Statement, supporting standards and related operating procedures. Environmental elements are aligned to the ISO14001:2015 standard on Environmental Management.

In summary, we strive to:

  • identify, assess and actively manage the HSE hazards, impacts and risks arising from our operations, investigating incidents and monitoring performance and systems;

  • minimise adverse environmental impact through the implementation of environmental management systems that are proportional to each contract, aligned to customer specification and contractual requirements, and underpinned by the Serco Management System;

  • actively encourage input from employees, unions, customers and others to build sustainable solutions, helping us make decisions based on a deep understanding of work conditions and constraints;

  • promote a ‘just’ health and safety culture and a culture of environmental stewardship based on openness, transparency, active and caring leadership and mutual trust, innovation and pride; and

  • regularly review, learn and identify opportunities for continual improvement at all levels of governance.

Key components in our governance

  • The Serco plc Board has ultimate responsibility for HSE, assisted by our Corporate Responsibility Committee (CRC) – which provides formal review and oversight of HSE strategies and effective delivery against agreed objectives and targets – and Group Chief Operating Officer, Group Executive Sponsor for HSE;

  • The CRC, Executive Committee and Divisional Executive Management Teams (EMTs) review quarterly operational and strategic HSE performance reports. HSE data is also included in
    - monthly Business Performance Reviews by Divisional Chief Executive Officers (CEOs) and Business Unit Managing Directors; and
    - Divisional Performance Reviews by the Group CEO, Group Chief Financial Officer and Divisional CEOs.

  • Our Director of Group HSE is responsible for HSE strategy design, management and execution and the development and maintenance of associated policy and governance.

  • The Director of Group HSE chairs our global HSE Oversight Group (including Divisional HSE Leads), which meets regularly to discuss strategic and operational performance and share best practice.

  • The Group Head of Environment, Energy and Sustainability chairs the Group Environmental Oversight Committee, leading the continuous development of the Environmental agenda.

  • Divisional EMTs are responsible for appropriate Divisional adherence to strategy, policy and standards and managing associated risks, while Divisional HSE Leads are responsible for designing and delivering Divisional Strategy and implementing policy and governance across the Division. In addition, we have c.150 operational HSE SMEs across the business, supported by a team of Environment, Energy and Sustainability experts, advising on HSE issues whilst ensuring Company policy and management systems are properly applied and aligned to business requirements.

  • Our annual compliance assurance and internal audit programmes cover health and safety, whilst regulatory audit and external certifications provide independent review and assurance.

  • Our first, second and third line inspections, plus independent compliance assurance reviews and internal audit programmes, provide comprehensive coverage of environmental issues.

  • We gain external independent review of performance via certification to the ISO14001:2015 standard on Environmental Management in pertinent areas of our operations. We are also audited globally to the ISO14064-3:2006 standard on validation and verification of Greenhouse Gas assertions, providing assurance on our annual carbon reporting.

Employee health and wellbeing; Employee engagement and development; Diverse workforce and inclusive workplace

Our policy and commitment

Our commitments are defined within our Group People and HSE strategies, our People and Health, Safety and Environment (HSE) Policy Statements, supporting standards and related operating procedures.

In summary, we strive to:

Employee health and wellbeing

  • identify, assess and actively manage the employee health and wellbeing (EHW) hazards, impacts and risks arising from our operations, investigating incidents and monitoring performance and systems;

  • actively encourage input from employees, unions and others to build sustainable solutions, helping us make decisions based on a deep understanding of work conditions and constraints;

  • maintain a healthy and productive workforce through effective management of employee welfare and occupational health;

  • promote a culture of wellbeing based on openness, transparency, active and caring leadership and mutual trust, innovation and pride; and

  • regularly review, learn and identify opportunities for continual improvement at all levels of governance.

Employee engagement and development

  • regularly review and improve levels of employee engagement and performance, including the development of employee skills to meet current and future business needs;

  • strengthen dialogue and interconnectivity at all levels, amplify employee voice and cultivate more opportunities to harness employee insights and expertise;

  • address any behaviour identified as negatively impacting employee engagement in line with our policies and procedures;

  • provide relevant training and development where necessary to enable individuals to perform their duties within role; and

  • support the right of our employees to choose whether they are a member of a recognised trade union or employee representative body and deal constructively with such organisations in line with local legislation.

Diverse workforce and inclusive workplace

  • attract, develop and retain employees from the broadest possible talent pool;

  • proactively manage and regularly analyse the diversity of our workforce; and

  • promote equality of opportunity and create an inclusive and enabling environment in which all our people are treated fairly and with respect, dignity and zero tolerance for any form of discrimination.

Key components in our governance

  • Our Group Chief Executive is ultimately responsible for our people strategy objectives and ensuring our people strategy is reviewed annually. The plc Board validates the people strategy and receives quarterly reports on delivery across the Group. Our Corporate Responsibility Committee (CRC) provides formal review and oversight of strategy and effective delivery against agreed objectives and targets.

  • The CRC hosts our approach to Employee Voice on behalf of the plc Board, assisted by our Non-Executive Director for Employee Voice.

  • Our Group Chief Operating Officer is responsible for people strategy design, management and execution – including Employee Voice – supported by our Global HR Leadership Team, comprising Divisional Human Resources Directors (HRDs), Group HR Centre of Expertise Directors and HR Share Services leadership.

  • Our Group HR Centres of Expertise are responsible for policy, strategy and governance across the employee lifecycle.

  • Our Employee Relations Centre of Expertise, led by our Group Director of Employee Relations, is responsible for EHW and our trade unions policy, strategy and governance.

    - Reporting to the Group Director of Employee Relations, our Group Head of Workplace Health and Wellbeing is responsible for delivering our approach to EHW
    - Our Group Director of Employee Relations is responsible for managing relationships with our recognised trade unions in the UK and maintaining oversight of trade union relationships in all regions through close contact with our Divisional HRDs/Employee Relations leads.

  • Our Colleague Experience Centre of Expertise, led by our Group Director of Colleague Experience, is responsible for employee engagement, Employee Voice and Diversity & Inclusion (D&I)

    - Reporting to the Group Director of Colleague Experience, our Group Colleague Communications Manager is responsible for delivering our approach to Employee Voice and managing contact and communication between the plc Board and our workforce

    - Reporting to the Group Director of Colleague Experience, our Group Head of D&I is responsible for delivering our approach to D&I.

  • Our Talent & Capability Centre of Expertise, led by our Group Heads of Talent Acquisition and Development, is responsible for employee development.

    - Role-related training is managed at appropriate Divisional or Functional levels.

  • All Group HR Centres of Expertise chair global oversight group (including Divisional leads), which meet regularly to discuss strategic and operational performance and share best practice.

  • Divisional Executive Management Teams are responsible for appropriate Divisional adherence to policy and standards, while Divisional HRDs are responsible for implementing policy, strategy and governance across the Division, supported by their Divisional leads.

Duty of care; Social outcomes

Our policy and commitment

Our commitments are defined across our policy framework, principally our Policy Statements on: Business Conduct and Ethics; Business Development; Governance; Health, Safety and Environment; Operations; People; and Quality, as well as supporting standards and related operating procedures.

In summary, we strive to:

  • maintain a focus on delivering particularly complex and transformational services that are critical to the functioning of society;

  • maintain our public service ethos and aspiration to do the best for citizens, not just for our customers;

  • research, measure and improve our solutions so that they are citizen-centred and aligned to our commitment to quality service delivery;

  • prioritise, protect and promote the health, safety and wellbeing of the recipients of our services, whether they are those for whom we are directly responsible, such as individuals in our prisons or travelling on our transport, or those who are the direct beneficiaries of our services, such as patients in the hospitals that we clean and maintain;

  • design and deliver services in ways that focus on the needs and experiences of service users and enable and enhance service-related outcomes, including the provision of service environments, equipment and employees that are conducive and contribute to these imperatives;

  • ensure that service users are treated with consideration, courtesy, compassion and respect, and that our provisions and interactions exemplify our Value of Care, helping us to make a positive difference, including the maintenance of feedback channels to enable effective identification of and response to risks and improvement opportunities;

  • identify, assess and actively manage the health, safety and wellbeing hazards, impacts and risks arising from our operations, investigating incidents and monitoring performance and systems; and

  • regularly review, learn and identify opportunities for continual improvement at all levels of governance.

Key components in our governance

Our duty of care commitment benefits from the governance in place across other areas of our Corporate Responsibility framework. For example:

  • seeking to ensure we deliver contracted duty of care requirements is part of our commitment and approach to quality service delivery;

  • seeking to ensure the health and safety of our service users is part of our commitment and approach to safe operations;

  • seeking to ensure we treat service users with respect for their human rights and to a high moral standard is part of our commitment and approach to behaving with integrity and respecting human rights; and

  • the materiality of service user health, safety and wellbeing is recognised in our principal risks, ‘failure to act with integrity’, ‘health, safety and wellbeing’ and ‘catastrophic incident’. Mitigating these risks effectively is part of our duty of care commitment and approach.

In addition:

  • Divisional Business Lifecycle Review Teams help to ensure our duty of care is complied with during our Business Lifecycle, including solution design, implementation and operation.

  • Our Corporate Investigations Group Standard Operating Procedure sets out the standards and approach to be taken when investigating serious incidents and allegations, including those involving or reported by service users.

  • Our Value of Care is integrated into our Code of Conduct, Leadership Model, annual Performance and Development Review process and Pulse Awards recognition programme, enabling us to define and communicate our expectations of caring behaviour and helping to ensure these are met.

  • To enhance social outcomes across the services we provide, we aim to continuously evaluate and improve their design and delivery. We do this through our robust governance process and standardised programme management framework that manages the lifecycle of our business from bid through transition and the operating period of a contract.

In summary, we:

  • follow a governance framework and business development process that seeks to manage risk, enables transparent and well-informed decision making, and facilitates delivery of value and social outcomes;

  • monitor service user and customer satisfaction levels; and

  • meet regularly with our customers to openly review our performance and enable continuous improvement.

Quality service delivery; Value for public money

Our policy and commitment

Our commitments are defined across our policy framework, principally our Policy Statements on Business Development, Operations and Quality, as well as supporting standards and related operating procedures.

In summary, we strive to:

  • attract, develop and retain expert and empowered people from around the world;

  • employ an experienced, knowledgeable and well-trained frontline workforce;

  • establish appropriate benchmarks for services within our sectors;

  • select and bid for opportunities where we can achieve optimal balance of value creation for our stakeholders;

  • deploy quality systems that deliver excellent service usability for our service users;

  • work closely with our customers to anticipate, understand and review current and future needs and policy environments;

  • enable quick, proactive and cost-effective innovation through deployment of our Centres of Excellence (CoEs), test new ways of doing things and improve continuously throughout the lifetime of our contracts;

  • transfer international and cross-sector best practice and experience to scale and customise our solutions;

  • invest in research and design thinking through the Serco Institute and by utilising Serco ExperienceLab to deliver services that are citizen-centred and outcome-focused;

  • manage our business with commercial rigour;

  • regularly review our overheads and contract costs;

  • fully utilise our economies of scale and our international, transferable expertise; and

  • measure, monitor and report on key supplier performance to drive a cost-effective supply chain.

Key components in our governance

High quality services are delivered through good management and improved on through consistent research and evaluation.

In summary, we:

  • embed appropriate management systems that enable quality to be assessed and managed to drive and demonstrate continual improvement in line with customer needs and expectations;

  • deliver certification to appropriate industry standards; conduct formal monthly reviews of contracts and projects, held by Divisional Executive Management Teams, which ensure monitoring and reporting of performance against contract obligations;

  • hold regular meetings with customers, including contract performance reviews; and collate annual feedback from our customers on the quality of our services and deploy this insight to drive continual improvement.

We maintain a robust governance process and standardised programme management framework that manages the lifecycle of our business from bid through transition and through the operating period of a contract.

In summary, we:

  • apply principles of good programme and project management to all of our bids, sharing best practice and applying lessons learned;

  • fully apply operational expertise to business development decisions;

  • follow a governance framework and business development process that manages risk, uses resources effectively and enables transparent, robust and well-informed decision-making whilst maximising value;

  • balance innovation and our entrepreneurial spirit with robust risk management at all stages of business development, especially when entering new markets;

  • conduct Divisional Performance Reviews and Business Lifecycle Reviews of all contracts, held by Divisional Executive Management Teams;

  • oversee and assess all aspects of operational, financial and strategic performance of contracts, held by Business Units within each Division; and

  • ensure the transition of contracts is effective, implementing agreed solutions and delivering agreed customer requirements.

Responsible relationships and sustainable procurement

See also: Behaving with integrity and respecting human rights

Our policy and commitment

Our commitment is defined within our Ethics Compliance strategy, Business Conduct and Ethics and Procurement Policy Statements, supporting standards and related operating procedures.

In summary, we strive to:

  • only work with customers, partners and suppliers who respect our Values and meet our standards of business conduct and ethics;

  • complete legal, ethical and human rights due diligence on proposed key third parties, relating to any aspect of our Business Lifecycle, and conduct ongoing monitoring throughout the lifetime of the relationship;

  • complete robust analysis of requirements and establish a clear management structure (aligned to the Serco Management System and overall strategies for each business opportunity) for third-party arrangements considered necessary to meet contract requirements, including joint ventures, strategic partnerships and consortium arrangements;

  • apply robust supplier sourcing and selection criteria, and monitor supplier performance to inform relationship management and identify opportunities for improvement;

  • ensure small firms, voluntary and community organisations and social enterprises are actively encouraged to be members of Serco’s supply chain.

Key components in our governance

  • Our Investment Committee provides formal oversight and approval of contractual structures and arrangements for partner/ strategic relationships, whilst Divisional Executive Management Teams are responsible for managing these relationships, including regular strategy and performance review meetings with partners, supported by members of the Executive Committee and plc Board as appropriate.

  • Divisional Legal Representatives manage contractual arrangements with customers, partners and suppliers.

  • Our Procurement and Supply Chain Function delivers consistent procurement processes in the selection and management of suppliers, ensuring compliance with laws and regulations, our ethical standards, Code of Conduct and human rights throughout our supply chain.

  • Our Supplier Code of Conduct clarifies our requirements and expectations regarding our suppliers and their facilities, wherever they are located.

Shareholder returns

Our policy and commitment

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.

In summary, we strive to:

  • ensure a balanced performance framework that recognises value must be delivered to our shareholders as well as our customers and the people who work in the business;

  • align remuneration and incentive arrangements to long-term, sustainable value creation; and

  • implement the strategy previously presented to shareholders and deliver our plan to 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.

Key components in our governance

  • Our performance framework does not explicitly include ‘maximising shareholder value’. Instead, shareholder value is expected to coincide automatically with the appropriate achievement of ‘our deliverables’. Just as each component in the performance framework is expected to support achieving our deliverables, they are also expected to deliver shareholder returns in the long term.

  • Short-term incentives include a mix of financial measures as well as key strategic goals aligned to generating long-term shareholder value, whilst long-term incentives directly include: relative total shareholder return (TSR) as an explicit performance measure; earnings per share (EPS) growth; return on invested capital (ROIC); employee engagement; and progress with increasing our order book. Taken together, we consider these five measures to be the most appropriate for sustainable shareholder value generation.

  • Our Remuneration Committee has set personal shareholdings guidelines and requirements for our senior management team to support long-term commitment to Serco and the alignment of employee interests with those of our shareholders.

Safeguarding shareholders’ investments, along with our assets, our people and our reputation, is paramount. For more information about how we manage and mitigate our collective business risks, see: Managed risk.

Transparency

Our policy and commitment

We recognise that meaningful engagement with our institutional and retail shareholders is integral to our continued 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, both internal and external.

In summary, 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, including ensuring that Board members and the wider senior management team are available to address shareholder questions and views at our Annual General Meeting;

  • provide meaningful insight into our results and prospects, and have management information systems that enable efficient and effective internal and external reporting; and

  • base our approach to executive remuneration on a clear rationale in which the alignment of interests is recognisable and understandable.

Key components in our governance

  • Primary responsibility for day-to-day Investor Relations activities and engagement with shareholders rests with the Group Chief Executive, Group Chief Financial Officer and the Investor Relations function.

  • In addition, the Chairman may meet with some of our largest shareholders, whilst the responsibilities of the Senior Independent Director include providing an alternative point of contact for them. The Chair of the Remuneration Committee meets separately with advisory bodies and institutional shareholders to discuss our approach to remuneration.

  • In order to maintain effective and ongoing dialogue regarding our performance, we conduct regular presentations, meetings and calls with institutional investors and analysts in addition to our Stock Exchange Announcements.

  • Assurance of our reporting is a key responsibility of our Audit Committee, who in turn review guidance from bodies such as the Financial Reporting Council and are supported and challenged by our External Auditor.

  • Our management information framework includes the contract performance monitoring process (tracking performance measures specific to each customer operation), our monthly management accounts and our Divisional Performance Review (DPR) processes. Ongoing development of these is key to improving internal and external transparency.

  • The Board reviews regular Investor Relations reports, which highlight investor perspectives, share price movements, changes in the share register, our recent and planned Investor Relations activities, analyst recommendations and financial forecasts, and significant news from the market and the support services sector.

Corporate governance and control

Our policy and commitment

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 ensuring we fulfil our purpose.

We have a comprehensive corporate governance framework, with clearly defined responsibilities and accountabilities to safeguard long-term shareholder value. Below this our overarching management framework, the Serco Management System (SMS), describes what needs to be done, and by whom, through a range of policies, standards and procedures while our Code of Conduct defines how we expect our operations to be delivered and the behaviours we expect across our organisation, underpinned by our Values and commitment to behave with integrity and treat people with respect.

Our commitment to governance is defined within our Governance Policy Statement, supporting standards and related operating procedures.

In summary, 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 all our stakeholders, our assets and reputation;

  • create an open and transparent environment where good behaviour is recognised and where poor behaviour, non-compliance and breaches of our minimum standards can be reported without fear and dealt with effectively, consistently and appropriately without exception;

  • maintain a management system which sets the policies, minimum standards and procedures that the business will operate within;

  • manage our business within an organisational structure where responsibilities and accountabilities – including delegated levels of authority – 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 in relation to Serco’s listing on the London Stock Exchange.

Key components in our governance


 
Corporate governance: Board and Group level

  • The Company’s governance structure is illustrated above. There is a schedule of matters reserved for the Board, available on our Board and Governance page.

  • The Board has delegated certain of its responsibilities to the Audit, Corporate Responsibility, Group Risk, Nomination and Remuneration Committees. The terms of reference for each are available onr Board and Governance page.

  • In addition, there is a Disclosure Group which meets to consider the disclosure of information to meet legal and regulatory obligations under the Market Abuse Regulations.

  • The Executive Committee is chaired by the Group Chief Executive and additionally comprises the Group Chief Financial Officer, Divisional Chief Executives, the Group General Counsel and Company Secretary, the Group HR Director and the Group Director of Strategy and Communications. The Committee has delegated responsibility from the Board to ensure the effective direction and control of the business and to deliver the Group’s long-term strategy and goals.

  • The Investment Committee comprises the Group Chief Executive, the Group Chief Financial Officer, the Group General Counsel and Company Secretary, and other members of the management team. It acts on behalf of the Board to review, monitor and approve bids, mergers, acquisitions and disposals and other corporate activity within specific authority limits delegated by the Board.

  • The Approvals and Allotment Committee comprises the Group Chief Executive, the Group Chief Financial Officer and the Group General Counsel and Company Secretary. This Committee acts on behalf of the Board between Board meetings in respect of matters not specifically reserved to the Board.

Corporate governance: Divisional level

  • Each Division is under the direction and control of its Divisional Chief Executive Officer (CEO), whose responsibilities include: Divisional strategy and structure; large bids and major capital expenditures; Divisional business plans, operating plans and targets; financial statements; adoption of the SMS; Divisional operating procedures; Divisional statements on internal controls and audit; health, safety, environment and security strategy, objectives and targets; and the Division’s position on significant ethical issues.

  • Divisional CEOs will define the management structure required in their Divisions to ensure that the appropriate decision- making takes place, within defined delegated authorities, and that there is an acceptable line of sight and reporting of risk, issues and performance from the contract base, bids and within functions to Business Units and to Division.

  • Each Division maintains a Divisional Executive Management Team (EMT) to oversee and assess all aspects of operational, financial and strategic performance.

  • Each Divisional EMT will establish Business Unit management teams to oversee and assess all aspects of operational, financial and strategic performance of contracts belonging to their Business Units.

  • Each Business Unit Managing Director will appoint a Contract Manager or Director to manage the performance of a contract on a day-to-day basis, including managing employees, the customer, subcontractors and other relevant stakeholders, managing and reporting on operational and financial performance, and developing organic growth opportunities.

Serco Management System

The SMS is our overarching management framework. It describes what needs to be done, and by whom, through a range of policies, standards and procedures that define the rules governing all our operations. It provides direction on compliance with relevant laws and regulatory requirements.

  • Group Policies are owned by Group Functional Leads, signed by the Group Chief Executive and approved by the plc Board. They define our strategic commitments and apply across the Group.

  • Group Standards reflect our Values and define the minimum standards we must achieve, focusing on mandatory requirements applicable across the Group.

  • Group, Country, Divisional and Local Operating Procedures (GSOPs, CSOPs, DSOPs and LSOPs) build on these foundations within the SMS, providing direction and guidance on how to achieve mandatory requirements and comply with relevant laws and regulations in the countries where we operate. Standard Operating Procedures are sensitive to local customs, traditions and cultures.

All elements of the SMS and Code of Conduct are subject to a schedule of regular review to ensure they are up-to-date, relevant, appropriate and effective.

Employee and manager responsibilities regarding SMS compliance are clearly defined and all employees complete appropriate SMS, Code of Conduct and Values training on joining Serco and annually during their employment. Our Group Consequence Management Standard defines how instances of non-compliance are managed.

Three Lines of Defence

To provide management assurance, a ‘three lines of defence’ model has been implemented to test business compliance. Each level of assurance informs our risk management process and the delivery of local, regional and Group improvements.

  • 1st line of defence: At an operational level, local controls are implemented to seek to ensure customer, legal and regulatory requirements are met. An annual SMS self-assessment process is undertaken by all Contracts and support functions across the Group which helps managers increase their understanding of SMS requirements and improve compliance with SMS controls.

  • 2nd line of defence: A programme of Division-led compliance assurance reviews test compliance with SMS controls and risk mitigations. These are selected based on Group and Divisional risks and other priorities determined by risk owners and self-assessment results. These reviews are carried out at Contract, Business Unit and Divisional levels.

  • 3rd line of defence: Internal Audit provides independent reviews (sometimes delivered with support from external parties working under Internal Audit’s direction) of the design and operating effectiveness of our processes and controls. External Audit is also used to test control effectiveness in areas of the business where there is a customer or legal requirement.

Code of Conduct

Based on our Values, our Code of Conduct clearly and concisely defines how we expect our operations to be delivered and the behaviours we expect across our organisation. It provides direction to ensure we are sensitive to local customs, traditions and cultures.

Our Code applies to everyone who works for and on behalf of Serco, regardless of role, location and background, and confirms what they can expect of us as well as what we expect of them.

Managed risk

Our policy and commitment

Our commitment is defined within our Risk Management Policy Statement, supporting standards and related operating procedures.

In summary, we strive to embed an Enterprise Risk Management framework throughout the business that will:

  • support informed risk-taking that promotes business growth and success whilst recognising the risks associated with key decisions;

  • embed systematic, structured and timely risk management in our organisational processes, linked to achievement of our objectives;

  • gain early line of sight regarding increases in threat or exposure;

  • maintain a robust control environment that reduces negative impacts to our business performance; and

  • be dynamic, iterative and responsive to change, facilitating continuous improvement of our risk management through review and assurance.

Key components in our governance

  • The Board oversees the Company’s risk management and internal control processes within the Enterprise Risk Management framework, discharging its oversight responsibilities through the Group Risk Committee (GRC) and supported by the Corporate Responsibility Committee (CRC) and Audit Committee.

  • We undertake a bottom-up review of risks quarterly, with our Business Units identifying the main threats to achievement of their objectives, documenting and analysing their potential impact, and defining clear actions to reduce the likelihood of those risks materialising and/or the financial impact if they should still occur. The Business Unit risks are consolidated and reported to Divisional leadership teams in a check and challenge capacity to ensure that risks on the Business Unit risk registers accurately reflect the concerns of local senior leadership.

  • Once approved, the Divisional Risks are reviewed by the Group ERM team and help inform the principal risk updates. The Board are updated after each meeting. The Group Director Enterprise Risk is responsible for reviewing and maintaining the Risk Management Framework, providing oversight and reporting on business risk and the performance of the framework.

  • The Enterprise Risk Management (ERM) Function is custodian of the Group Risk Register and Compliance Assurance Programme, providing oversight and assurance over the effective implementation of material controls.

  • Our risk policy is set at a Group level with implementation and execution owned within each of our Divisions. The Serco risk management lifecycle process is mandated throughout the company to ensure a consistent approach to identifying, analysing, monitoring and reporting risks and to provide assurance that the risk mitigation in place is effective and appropriate.