Serco Group plc – Annual report – 31 December 2020
Industry: support services
Section 172 (1) Statement
The Directors of the Company are bound by their duties under the Companies Act 2006 and, in particular, must act in the way they consider, in good faith, would most likely promote the success of the Company for the benefit of its members as a whole, taking into account the factors listed in section 172(1)(a) to (f) of the Companies Act 2006.
The following disclosure describes how the Board has had regard to those matters and forms the Directors’ statement required under section 414CZA of the Companies Act 2006.
Board Engagement with Stakeholders
The Board is committed to enhancing engagement with all of our stakeholders. The Board considered that, during these unprecedented times, our stakeholders would benefit from understanding more about the approach taken by the Company to meeting the challenges and the impact on the ongoing performance of the Group due to Covid-19. The Board met virtually on some occasions during the year and a number of additional meetings were held to discuss how the Company was meeting the challenges it faced. The Board also received regular briefings from management in the form of written reports. Over the year, the Board met 16 times. There have been regular communications with the wider business over this time and members of the Board were able to attend divisional management conferences before the full impact of Covid-19 meant such events were not possible as well as attending Colleague ConneXion and Inclusion Hub events, management meetings and contract visits virtually. The Board prides itself on the Company’s strong focus on transparency and it was keen to keep the market aware of developments so, in addition to the Company’s scheduled programme of announcements, the Board approved the release of unscheduled Trading Updates which included the impact of Covid-19 on the business on 2 April 2020 and 16 October 2020.
Covid-19 has had a significant impact on all of the Company’s stakeholders and the Company’s response is set out throughout this year’s Annual Report and also in the Covid-19: Our response report on pages 38 and 39.
In addition to the methods of engagement described above and over the following pages, the interests of our stakeholder groups are considered by the Board through a combination of:
- Regular reports and presentations at scheduled Board and Committee meetings, including operational reports presented by the Chief Executive and updates from the Chief Financial Officer, Chief Operating Officer, Group General Counsel and Company Secretary and other senior management on a range of issues including financial matters, approach to ESG matters, health and safety, assurance and controls ethics and compliance, people matters (including employee engagement) and investor feedback.
- Unscheduled Board and Committee meetings if the Board needs to be informed of matters or when a decision is required before scheduled Board meetings such as Covid-19 developments, trading updates, bids, refinancing or M&A opportunities.
- Regular communication from the Executive Directors, senior management and subject matter expects in a number of areas.
- A rolling agenda of matters to be considered by the Board and Committees throughout the year, including a strategy review which considers the purpose of the Company and strategy to be followed by the Group, which is supported by a budget for the following year and a medium-term financial plan.
- Formal consideration of large bids, acquisitions, refinancing, share buybacks, dividends and other matters, including any factors which are relevant to major decisions taken by the Board through the year in line with the Delegation of Authority and Terms of Reference for each Board Committee.
- The risk management process and other routine Audit Committee, Corporate Responsibility Committee, Group Risk Committee, Nomination Committee and Remuneration Committee agenda items, as described later in this report on pages 91 to 102 and 105 to 133.
As with other large and complex companies, the Directors fulfil their duties partly through a governance framework which delegates day-to-day decision-making to the Executive Directors. The Board recognises that such delegation needs to be much more than simple financial authorities and it covers areas such as risk and new sector or country approaches. You will find detailed in the Annual Report a summary of the governance structure, which covers the values and behaviours expected of our employees; the standards they must adhere to; how we engage with stakeholders; and how the Board looks to ensure that we have a robust system of control and assurance processes (see pages 40 to 49).
Our Corporate Responsibility (‘CR’) framework is structured around our key stakeholders and this year we have focused even more on our approach to and progress in delivering our ESG commitments. We summarise our progress and performance in the ESG Impact and Integrity section of this Annual Report on pages 40 to 49.