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Serco announces the key elements of its corporate renewal programme

Date: 25 Oct 2013

Update on corporate renewal programme

Serco Group plc (Serco), the international service company, today provides an update on its corporate renewal programme.  Serco clearly understands the need to be able to demonstrate to our UK Government customer substantive evidence of corporate renewal.  That is why we are today announcing the following comprehensive series of measures that reflect our commitment to improve transparency in our dealings with the UK Government.

In summary, these measures consist of:

  • A separation of the UK & Europe division into two, with one focused on our UK Central Government customer and the other on our activities in the wider public sector
  • Strengthening of contract level governance and transparency
  • The recruitment of three additional plc Board non-executives and a Group General Counsel
  • The establishment of a Board Committee for Corporate Responsibility, and in each of our divisions formal Ethics Committees and full time Ethics Officers
  • Updating Serco's Code of Conduct, Values Statement and Governing Principles, backed up by training, induction and performance management

These actions are in addition to the programme of corporate renewal already underway and as announced previously by Serco, which includes:

  • A specific Board Committee to oversee this programme and the appointment of Lord Gold as an independent third-party member of this Committee
  • The appointment of the Ethical Leadership Group to undertake a cultural review and EY to undertake systems and controls reviews

Taken together, these actions represent a comprehensive and tangible programme drawing upon the best advice and expertise available.

Since the announcements by the Ministry of Justice and Cabinet Office on 11 July, Serco has been cooperating fully with reviews and audits across a number of our central government contracts.  The reviews are ongoing, progressing satisfactorily and are expected to conclude in the autumn, following which the Board will provide a further update.

Alastair Lyons, non-executive Chairman, said: "The decisive and comprehensive actions we have set out today, alongside the programme already underway, should leave no-one in any doubt about how seriously Serco takes these issues and our commitment to rebuild the confidence of our UK Government customer.  Our focus now is on implementing these important changes that redefine the way in which we engage.  We see an opportunity to take a substantial step forward in public sector outsourcing through an open, transparent approach to business with our customers based upon mutual confidence."

Resignation of Christopher Hyman

Serco today announces the resignation of Christopher Hyman as Group Chief Executive.  Ed Casey, who has led Serco's Americas division since 2005, has been appointed Acting Group CEO and to the Serco Group plc Board with immediate effect.

Given the overriding objective of the renewal programme, Christopher Hyman believes that the Company will have the greatest chance of success with new leadership at the helm and he has, therefore, decided to step down with immediate effect, which has been accepted by the Board.

In turn, the Board believes it is appropriate to look outside of the business for a new Group CEO, and a search has already commenced.

Alastair Lyons said: "On behalf of the Board I would like to thank Chris for his enormous contribution to Serco over the last 19 years.  As CEO since 2002, he has taken Serco from a predominantly UK business with a turnover of £1.3bn to the £5bn international services business it is today.  He leaves with our very best wishes."

Christopher Hyman added: "Through the hard work and dedication of my colleagues, Serco over the last 25 years has achieved some significant milestones in delivering better services around the world.  In so doing we have grown into many new markets, become truly international and employ over 120,000 people delivering services in over 30 countries.

"I have always put the interests of Serco first.  At this time, nothing is more important to me than rebuilding the relationship with our UK government customer.  In recent weeks it has become clear to me that the best way for the Company to move forward is for me to step back.  I have been fortunate enough to have had the privilege of working at a great company with extremely talented people.  I wish everyone at Serco the very best for the future."


For further information please contact:

Stuart Ford, Serco Head of Investor Relations, T +44 (0) 1256 386 227

Marcus De Ville, Serco Head of Media Relations, T +44 (0) 1256 386 226

Jonathan Glass/Azhar Khan, Brunswick, T +44 (0) 207 4045959

Analyst and institutional investor conference call

There will be a conference call for analysts and institutional investors to discuss this statement at 12:30 BST.  The call will be hosted by Alastair Lyons, non-executive Chairman.  Analysts and institutional investors should dial UK toll number +44 (0)20 3139 4830 followed by participant pin code 84616886# to register for the call.  The call can also be listened to live via the Serco website a replay facility will be made available after the call with details posted on the website.

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Last Updated: 25 Oct 2013