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Our shareholders

We are determined to protect our shareholders’ interests and create long-term, sustainable value for them.

Our Shareholders - Shareholder returns segment of the CR framework

What shareholder returns means to us

We focus on creating long-term, sustainable value – seeking to protect the interests of our owners alongside those of our employees, customers and the communities in which we operate.

 Our Shareholders - Transparency segment of the CR framework

What transparency means to us

With investors, as with customers, we seek long-term relationships based on transparency, honesty and clarity – all of which are critical for building trust. We are therefore committed to open and regular engagement with our shareholders.

Our Shareholders - Corporate governance segment of the CR framework

What corporate governance and control means to us

We work within a structure of governance that seeks to enable ethical and effective direction, control and assurance of the business, including where we operate, who we serve and how we manage our responsibilities to stakeholders.

Our Shareholders - Managed risk segment of the CR framework

What managed risk means to us

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.

Our progress in 2020 and our next steps:

Shareholder returns

Progress in 2020

As shareholders have not received dividend income in recent years, TSR is reflected in share price performance (SPP) only. Point-to-point SPP has been -3%, +69% and -26% from start to end of the financial years 2018, 2019 and 2020, respectively.

SPP is influenced by many factors: financial and non-financial, historic and prospective, and related specifically to Serco and to the wider stock market. However, we consider earnings per share (EPS) and returns on invested capital delivered (ROIC) particularly important to SPP. Underlying diluted EPS performance was +55%, +18% and +37% for 2018, 2019 and 2020, respectively, whilst underlying ROIC has been at 13.6%, 15.4% and 19.1% for those years. The Group’s order book was £12.0bn, £14.1bn and £13.5bn at the end of 2018, 2019 and 2020, respectively, despite disruption from Covid-19.

Our next steps

As set out in our guidance and outlook, after the dramatic growth of the last three years – with 33% compound annual growth in Underlying Trading Profit (UTP) – we see 2021 as being a year of more normal rates of growth in revenues and profits. We will have some ‘drags’ on our profitability, notably only having six months of the AWE contract, and we expect revenues related to Covid-19 services to be much stronger in the first half than in the second. Nonetheless, we expect revenue of ~£4.2bn, including organic revenue growth of ~4%, and UTP of ~£175m, which equates to 10% constant currency growth in the year. In terms of our ambition of achieving margins of at least 5% over the longer term, we believe this is still achievable. We continue to deliver against our plans and make good progress against our strategy.

For more information and broader discussion and analysis on our progress and performance in 2020, as well as our guidance and outlook, see the Serco Annual Report (specifically: Key Performance Indicators, Chief Executive’s Report, Directors’ Report and Financial Statements).


Each year we deliver a comprehensive schedule of internal and external reporting, shareholder engagement and reporting assurance, which in 2020 included:

  • issuing regular trading updates in addition to the requirement to report half- and full-year results;

  • issuing 116 announcements throughout the year regarding Contract awards, Contract losses, changes to the Board, material shareholdings, refinancing and corporate transactions;

  • engaging with over 100 different investment funds – holding meetings with institutional investors and attending investor conferences as part of our programme of post-results roadshows and corporate access activity; and

  • hosting other events, such as meetings for analysts to engage with the wider operational management team of the business, or to hear broader perspectives on our sectors and markets, such as through the work of the Serco Institute.

Corporate governance and control

Progress in 2020

For details of the key activities of the Board of Directors in promoting effective governance and compliance with the UK Corporate Governance Code during 2020, see the Corporate Governance Report in our Annual Report.

In addition to embedding and building on previously reported progress, and delivering our standard processes and programmes, we have:

  • Corporate governance

    • delivered to the UK Serious Fraud Office our Year One report under the Deferred Prosecution Agreement (DPA);

    • continued to mature our governance structure around an increasingly integrated and clearly defined ESG agenda;

    • strengthened the use of ESG measures in our incentives through the incorporation of specific ESG scorecards into annual bonus and long-term incentive awards. In 2021 the scorecards are focused on governance processes, stakeholder engagement, operational health and safety, colleague diversity and engagement, and environmental performance and management of environmental risks;

    • been recognised for the second year in succession as the most admired company in our sector in Management Today’s ‘Britain’s Most Admired Companies Awards 2020’. We were also rated top in our sector for Quality of Management, Effective Use of Corporate Assets, Inspirational Leadership and Effective Corporate Governance;

  • Serco Management System and Code of Conduct

    • added, updated or retired Group Standard Operating Procedures (GSOPs) to suit evolving business needs; new GSOPs include:

      • Clinical risk assessment and governance;

      • Modern slavery response and remediation;

      • Serco Essentials training;

    • delivered Serco Management System (SMS) and Code of Conduct training for managers and employees – including new, refreshed and updated modules and refined content to drive engagement and impact in specific areas of focus – per our ongoing Group-wide programme of ‘Serco Essentials’ training;

  • Three lines of defence – internal control and compliance assurance

    • reviewed the maturity of our financial assurance programme, and prepared for any new requirements which may be legislated following the Independent Review into the Quality and Effectiveness of Audit performed by Sir Donald Brydon (the Brydon Review);

    • increased focus on critical controls within our annual SMS self-assessment process and implemented Group-wide refinements;

    • refined our compliance assurance reporting and corporate tool to improve action closure; and

    • commenced a Group-wide review of compliance assurance governance and capability and a multi-year plan to further enhance our internal audit capability.

Our next steps include plans to:

  • continue delivering our obligations under the DPA and report progress;

  • launch the next instalment of our ‘Living our Code of Conduct’ training;

  • review our approach to and content of mandated training for the next three years;

  • consult with frontline employees to inform a refresh of our Code of Conduct and how they engage with it;

  • maintain the effectiveness of our financial assurance programme and commence implementation of changes aligned to any internal control compliance requirements following the Brydon Review; and

  • continue working to enhance our three lines of defence.

For planned activities of the Board of Directors in promoting effective governance and how the Company will work to comply with the UK Corporate Governance Code during 2021, please see the Corporate Governance Report in our Annual Report.

Managed risk

Progress in 2020

Whilst the onset of the Covid-19 pandemic and our response to it has become a primary focus this year, it has not disrupted our risk and governance processes and we continue to monitor and respond to the impact of it on Group operations. We have:

  • reviewed Group principal risks as planned, seeking to ensure they remain current, taking into consideration Functional and Divisional risk registers and any emerging risks that could threaten our strategy execution, business model, future performance, solvency and liquidity; 

  • conducted in-depth reviews of our principal risks, focusing on the effectiveness of mitigation actions and the management of any gaps between current risk status and the Company’s risk appetite;

  • introduced additional in-depth reviews into topical risk themes delivered by Business Unit (BU) leads to improve assurance and oversight into how risk management is executed within BUs;

  • continued to assess the impact of Covid-19 and associated emerging risks as a coordinated Group and Divisional response, leveraging the increasing maturity of our Enterprise Risk Management (ERM) approach – in particular our crisis management and business continuity capability. Our risk management and governance processes have operated throughout, providing a risk-focused approach to stresses on our principal risks. We have reviewed the impact on key controls for each principal risk, assessed the coverage of our three lines of defence assurance mechanisms and adjusted our focus and plans accordingly. This has helped us to identify interdependencies between principal risks and place additional emphasis on the efficacy of common controls.

As of the end of 2020 our Group principal risks are:

  • Failure to grow profitably

  • Failure to manage our reputation

  • Financial control failure

  • Major information security breach or cyber attack

  • Contract non-compliance, non-performance or misreporting

  • Failure of business-critical partner, supplier or sub-contractor

  • Failure to act with integrity

  • Failure to attract, engage and retain key talent

  • Health, safety and wellbeing*

  • Catastrophic incident

  • Material legal and regulatory compliance failure

* We have established this as a standalone principal risk to more clearly articulate our focus and commitment to the health and wellbeing of our employees and service users.

Our next steps include plans to:

  • continue focusing on mitigation plan progress whilst conducting in-depth reviews of Group principal risks; and

  • continue to develop and implement our ERM model.

Further information about our ERM approach and principal risk mitigation plans is available in the Serco Annual Report 2020 (specifically: Principal Risks and Uncertainties and our Group Risk Committee report).