Blog : BOARD TALK
|Posted on March 3, 2014 at 8:20 AM|
Serco Group plc the UK-based international services company, has been through a lot recently. But based on very recent events, it could teach other publicly listed businesses a thing or two when it comes to determination to 'make good.'
'A lot' includes botched contracts for the UK government, its biggest client. It was temporarily barred from bidding for new work after it was referred to the City of London police for manipulating the figures on a prison van escorting contract. If that were not bad enough, it was also referred to the Serious Fraud Office for overcharging on the electronic monitoring of offenders.
This has been expensive - it agreed to repay the government £68.5m for over-charging on the tagging contract, as well as to repay £2m of past profits from a prisoner escorting contract.
But the 'ban' period of six months on getting new work is over, and Serco has made substantive changes as part of a corporate renewal programme agreed with the government at the end of January. A focus on ethics is a key part of its strategy going forward.
It is appointing ethics officers to each of the five divisions within its business, says a spokesman. Having separated the UK and Europe business into two as part of the corporate renewal programme at the start of 2014, the appointment of these ethics officers began to be rolled out.
As you would expect, paying attention to the ethics is to come right from the top of the organisation - its boardroom. At the end of February Rupert Soames was appointed as Group CEO with effect from June 1, 2014. He is currently the Group CEO of Aggreko plc, the FTSE 100 support services company, and shares jumped 10% at news of his appointment, despite the revelation of a base salary of £850,000.
Today Serco announced the appointment of three heavyweight names as non-executive directors on its board - two of them women. Tamara Ingram, executive vice-president at WPP and Rachel Lomax, ex deputy governor of the Bank of England from 2003 to 2008 - as well as Mike Clasper, previously Group CEO of BAA plc from 2003 to 2006 and Chairman of HMRC from 2008-2012, are joining the board with immediate effect.
And here is what is really interesting. Rachel Lomax is to chair the Corporate Responsibility committee, "a new committee (which) will have responsibility for the ethical and governance oversight of the Group as well as consideration of health and safety, environmental and risk policy management", according to Serco.
Integrated thinking at the very top ? One to watch, certainly. You never know, a focus on ethics might even be catching on amongst corporate leadership at the banks.