FINAL ASSESSMENT SERCO GROUP PLC

SERCO 17/10/14 HTTP://WWW.SERCO.COM/

FINAL ASSESSMENT

SERCO GROUP PLC

The following pages contain the detailed scoring for your company based on

public information.

The following table represents a summary of your scores:

Topic Number of

questions

% score based

on public

information

Leadership, Governance and

Organisation

10 80%

Risk Management 5 80%

Company Policy and Codes 12 87.5%

Training 5 70%

Personnel and Helplines 7 78.6%

Total 39 80.8%

TI understands that the company is not involved in offsets and has therefore removed the two relevant questions (A13a and A13b).


A1:

Does the company publish a statement from the Chief Executive Officer or the Chair of the Board supporting the ethics and anti-corruption agenda of the company?

Score:

2

Comments:

Based on public information, there is evidence that the company publishes statements from both its Chief Executive as well as its Chairman strongly supporting the ethics and anti-corruption agenda of the company.

References:

Public:

Company Website, CEO Message (updated 2014):

‘Welcome

Welcome to Serco's Code of Conduct website. Our Code makes clear the standards and

behaviours expected of everyone who works for and on behalf of Serco. This website has

been created to provide universal access of Our Code to them.

Serco should be a business that always does the right thing.

A company that customers can trust to deliver on its promises and protect their interests.

And where people who work in the business feel confident, trusted and respected. In other

words, a place where we are all proud to work.

How can we make this happen?

The answer is not by fancy words, but by the way we behave each day towards our

customers, our colleagues, our suppliers and the wider community. If there is one phrase I'd

ask you to remember in your daily life at Serco, it would be, "Do as you would be done by".

Treat others as you would like them to treat you.

However, a single phrase is not enough to guide us in all circumstances, so I would like to

introduce you to Our Code of Conduct. It exists to help us understand the standards and


behaviours that are expected of us when we work at Serco. And I am completely serious

about setting the highest standards of behaviour for all of us.

However good our systems and processes, however clever our commercial proposals, these

will be useless and worthless if customers and colleagues cannot trust us. There are some

who believe that companies are two faced about this. That they say one thing, and do

another. Not here, not on my watch.

So please read Our Code of Conduct closely and abide by it. You will have all my support if

you do, and none if you do not.

Trust, respect, energy, enthusiasm, commitment, and delivering on our promises. These will

be the foundations of our Company.’

‘Rupert Soames

Group Chief Executive

Serco Group plc

and proud of it’

http://codeofconduct.serco.com/welcome.aspx

Corporate Responsibility Report (2013), Chief Executive Statement:

‘Although these issues related to two contracts out of a portfolio of more than 700 contracts, the actions and behaviours that occurred should never have happened and we have apologised unreservedly. I am sure we all agree that we must have a zero tolerance policy when it comes to compromises to our values.’

‘We are therefore doing everything we can to make sure such issues cannot happen again, anywhere in our business. I am proud of all the Serco people who yet again demonstrated outstanding commitment to their work, despite the pressures we have been under, quietly delivering excellent service to our customers around the world.’

‘The issues we faced in 2013 have only reinforced our view that we have to hold ourselves to the highest ethical standards, if Serco is to be successful and sustainable. This means living up to our responsibilities to our customers, the public, our employees, partners, suppliers, communities and the environment. If we do this, we will also enhance our financial performance and create sustainable value for our shareholders.’

‘Our people need to feel confident that they can raise potential ethical conflicts, so we can identify them early and take appropriate action. Towards the end of 2013, we appointed an ethical lead in each division, who is answerable to a divisional ethics committee. During 2014, we will also review our Code of Conduct and the way we define our values, provide ethical leadership training to all of our managers and make improvements to our performance management process.’

‘2013 was undoubtedly a difficult year for us. We will take the lessons learned and make the necessary changes to our business, as our stakeholders would expect. We intend to emerge stronger as a result, more committed to our values and better able to fulfil our corporate responsibilities.’

http://www.cr2013-serco.com/Commitment.html#.U3M2vPldWSp




Annual Report (2013), Chairman’s Statement, p.3:

‘Our objective continues to be the delivery of excellent public services with openness and transparency, and I believe the actions we have taken and are taking will support this now more than ever.’

‘I recognise that such inappropriate actions and decisions undermine the confidence people have in us. Our company relies upon the confidence of our customers and the confidence of the public, and anything that damages that, damages us.’

(p.61): ‘At Serco, we are committed to achieving high standards of corporate governance, integrity and business ethics in all our activities around the world. Governance is not an exercise in compliance nor is it a specific form of management. For Serco, our framework of governance is how we ensure the best interests of all our stakeholders – our customers, our employees, our shareholders, and the societies and communities of which we are a part – are uppermost in all our minds as we go about our business, and that where these interests are not directly aligned, we make decisions on the basis of what is right: this is an essential part of our public service ethos. During 2013, we found ourselves challenged at the heart of the way in which we do business. A number of individuals were found to be acting outside our values as epitomised by our Governing Principles and our framework of governance had not identified sufficiently clearly the root causes that had allowed this to happen. This challenged the trust in which we are held by our customers, our employees, and society at large. In response, the Company has designed and implemented a comprehensive programme of corporate renewal to ensure we respond appropriately to these root causes and put in place the actions, systems and processes to deliver stronger, more effective governance, organisational change and operational resilience across the Group.

In summary, this plan seeks to ensure that never again does someone amongst our 120,000 people do the wrong thing because they do not want to fail to meet their commercial objectives. And if they do the wrong thing, we will have the controls in place to make sure the problem is identified at an early stage, acted on, and the lessons learned.’

http://www.serco.com/Images/Serco_AR2013_tcm3-44453.pdf



A2:

Does the company’s Chief Executive Officer or the Chair of the Board demonstrate a strong personal, external facing commitment to the ethics and anti-corruption agenda of the company?

Score:

0

Comments:

Based on public information, there is no readily available evidence that the Chief Executive or the Chairman demonstrate a strong personal, external facing commitment to the ethics and anti-corruption agenda of the company, for example through public speeches or interviews, or personal involvement with industry anti-corruption initiatives. TI notes the recent public statements made by the Chairman, acting CEO and now new CEO; but understands these to have been made in connection with the public scrutiny the company has recently been under rather than as part of ordinary business.

References:

Public:

NA


A3:

Does the company’s Chief Executive Officer demonstrate a strong personal, internal-facing commitment to the ethics and anti-corruption agenda of the company, actively promoting the ethics and anti-corruption agenda at all levels of the company structure?

Score:

1

Comments:

Based on public information, there is some evidence that the CEO demonstrates a strong internal facing commitment to the ethics and anti-corruption agenda of the company. TI notes the video message to staff from the CEO. The company therefore scores 1.

References:

Public:

Highlights of the video message:

‘Serco should be a business that always does the right thing.

Where people feel confident, trusted, empowered and respected.

The way we behave each day towards our customers, colleagues, suppliers, towards the wider community.

If there is one phrase that I will ask you to remember in you daily life at Serco it will be this: ‘Do as you would be done by. Treat others as you would like them to treat you.’ However, a single phrase is really not enough to guide us under different circumstances. I would like to introduce you to our Code of Conduct.

I am completely serious at setting the highest standards of behaviour at Serco and for colleagues.

However good our systems and processes; however clever our technologies … this would be useless if our customers and colleagues cannot trust us.

Some say that companies are two-faced about this. That they say one thing and do another.

Not here. Not on my watch. So please read the Code of Conduct closely and abide by it. You will have all my support if you do, none if you do not.

Trust, respect, energy, enthusiasm, commitment, delivering on our promises, these will be the foundations of our company.

Our Code: Know it. Use it. Live it.’


Rupert Soames, Group Chief Executive, Serco Group plc

http://thisisrare.co.uk/serco/training_video/video.html



A4:

Does the company publish a statement of values or principles representing high standards of business conduct, including honesty, trust, transparency, openness, integrity and accountability?

Score:

2

Comments:

Based on public information, there is evidence of the company publishing statements representing high standards of business conduct, including integrity, trust, honesty, openness and transparency. The statements are published both in the Corporate Governance Report and also the Policy Statement on Governance and ethics.

References:

Public:

The Principles behind our Code of Conduct:

‘We foster an entrepreneurial culture

We enable our people to excel

We deliver our promises

We build trust and respect

We want to be known and trusted as the world's greatest service company, and make a positive difference to people's lives.

So we have a set of Governing Principles that tell us what matters to us and the behaviours we expect throughout Serco.

We must all live by these principles in our dealings with our colleagues, customers, suppliers, partners, shareholders and the communities we serve.’

http://codeofconduct.serco.com/OurPrinciples/index.aspx

We build trust and respect:

‘We build respect by operating in a safe, socially responsible, consistent and honest manner.

We never compromise on safety and we always operate in an ethical and responsible manner. We listen. In doing so, we treat others as we would wish to be treated ourselves and challenge when we see something is wrong. We integrate with our communities.’

http://codeofconduct.serco.com/OurPrinciples/index.aspx


http://codeofconduct.serco.com/OurPrinciples/WeBuildTrustAndRespect/index.aspx

Company Website, Culture and Values (updated 2014):

‘Our products and processes differentiate us from our competitors. But this goes deeper. The fundamental difference at Serco comes from the unique culture and values that underpin the way we run the company and the way we behave.

We value working with our customers in a collaborative, flexible and imaginative way. We understand the principles and passions that motivate public sector managers and we share their ethos and standards of conduct. We encourage social responsibility and try to treat people in the way we would wish to be treated. Our most powerful tool in improving performance is to instil a more stimulating culture where people feel they can personally make a difference. We have honed this tool into four Governing Principles that shape our individual behaviours and hence the way the company behaves.

The governing principles form one of the five Foundation Stones of the Company. Along with our business model, business offering, organisational model, and operating principles they define the way we run and grow Serco. They set out the services we wish to provide, our behaviours and the way we manage. They ensure we are all working from a commonly understood base that can be constantly applied across our organisation.

In this section you can learn more about the values that sustain our culture, our ethics and business principles, and the corporate governance processes that ensure we deliver our principles in practice.’

http://www.serco.com/about/culture/index.asp

Company Website, Governing Principles (updated 2014):

‘Governing Principles

Our Governing Principles are the behaviours we expect throughout Serco. We must all live by the Governing principles in our dealings with colleagues, customers, suppliers, partners, shareholders and communities.

The Governing Principles are:

Foster an entrepreneurial culture

We are passionate about building innovative and successful Serco Businesses. We succeed by encouraging and generating new ideas. We trust our people to deliver. We embrace change and, by taking measured risks, encourage creative thinking.

Enable our people to excel

Our success comes from our commitment and energy to go the extra mile. We are responsible to each other and can expect support when we need it most. We expect our people to achieve more by recognising and harnessing the power of individuals. We value people for their knowledge, and ideas and potential to contribute.

Deliver our promises

http://codeofconduct.serco.com/OurPrinciples/WeBuildTrustAndRespect/index.aspx



We do what we say we will do to meet expectations. We only promise what we can deliver. If we make mistakes we put them right. We are clear about what we need to achieve and we expect to make a fair profit.

Build trust and respect

We build respect by operating in a safe, socially responsible, consistent and honest manner. We never compromise on safety and we always operate in an ethical and responsible manner. We listen. In doing so, we treat others as we would wish to be treated ourselves and challenge when we see something is wrong. We integrate with our communities.’

http://www.serco.com/about/culture/principles/index.asp

Serco CR Framework:

Corporate Responsibility Report (2013):

‘The issues we faced in the second half of 2013 have only served to reinforce our view that for Serco to be successful and sustainable, we have to work in the right way. This means living up to our responsibilities to our customers, the public, our employees, partners, suppliers, communities and the environment.

Being a responsible business means ensuring that we:

always do the right thing

are open and transparent with our customers, our people and the societies we serve

deliver our commitments and comply with the law

engage with and motivate our people

act safely and with respect for the environment and those with whom we work

minimise business risks

achieve appropriate financial returns, and

develop and safeguard our reputation and brand.’

http://www.cr2013-serco.com/OurApproach.html#.U3NAIfldWSo

Company Website, Serco Code of Conduct:

‘Serco has a unique culture, based on our shared values and public service ethos. We are passionate about doing the right thing. Behaving in the right way is also good business sense. Our success depends on it.

Doing the right thing protects our reputation and benefits everyone connected with Serco - our customers, partners, suppliers, communities, shareholders and you.’

http://www.serco.com/about/sms/codeofconduct/index.asp

Group Policy Statement on Governance and Ethics:

‘We believe that the world’s leading companies must set and achieve high standards of performance, behaviour and governance. To achieve this we must be clear about what we believe in, the ethics and business standards we set ourselves and the good corporate governance practices we apply. We define this within our policies and will make sure these reflect our governing principles, comply with the relevant laws and regulatory requirements



http://www.serco.com/about/sms/codeofconduct/index.asp


of the countries in which we do business, are in line with principles of good corporate governance and are sensitive to local customs, traditions and cultures.’

http://www.serco.com/Images/PS%20-%20Governance_tcm3-36888.pdf

http://www.serco.com/Images/PS%20-%20Governance_tcm3-36888.pdf


A5:

Does the company belong to one or more national or international initiatives that promote anti-corruption or business ethics with a significant focus on anti-corruption?

Score:

2

Comments:

Based on public information, there is evidence that the company is a member of the DII and IFBEC, as well as other bodies promoting anti-corruption and business ethics.

References:

Public:

DII Signatory:

http://www.dii.org/groups/serco-inc


Membership of other initiatives:

‘Serco is an active member of a number of sectoral and business-led forums, which consider Corporate Responsibility as one of their key issues.

In the UK we are members of:

Institute of Business Ethics

Corporate Responsibility Group

All Parliamentary Corporate Responsibility Group

In India we are members of:

Business Process Industry Association (BPIA) which is part of CII

In the US we are members of:

Defense Industry Initiative on Business Ethics and Conduct (DII)

Public Affairs Council - http://pac.org/

In regard to global organisations we are members of:

International Forum on Business Ethical Conduct (IFBEC)’

http://www.cr2012-

http://www.dii.org/groups/serco-inc

http://pac.org/

http://www.cr2012-serco.com/?page=Leadershipincorporateresponsibility#sthash.ytjiIDdP.dpuf


serco.com/?page=Leadershipincorporateresponsibility#sthash.ytjiIDdP.dpuf



A6:

Has the company appointed a Board committee or individual Board member with overall corporate responsibility for its ethics and anti-corruption agenda?

Score:

2

Comments:

Based on public information, there is evidence that the company has appointed a Board level Executive Committee and a Corporate Responsibility Committee with responsibility for the company’s ethics agenda. There is evidence of Terms of Reference for these committees, as well as indications that they review and monitor the Company’s ethics and anti-corruption policies.

References:

Public:

Group Standard Internal Boards and Committees (July 2014), p.2:

‘At Serco, we are committed to achieving high standards of corporate governance, integrity and business ethics in all our activities around the world. Serco has a system of internal controls, including financial, operational and compliance controls, management assurance, risk management and internal audit that combine to ensure that Serco operates safely and ethically, delivers a great service that is valued by our customers, employees and shareholders and the societies and communities to which we belong. This ensures that their interests are uppermost in all our minds as we go about our business, and that where these interests are not directly aligned, we make decisions on the basis of what is right; this is an essential part of our public service ethos.’

(p.4): S9. Many key Board responsibilities are referred to by four standing

board committees:

a. Audit

b. Nomination

c. Remuneration and

d. Corporate Responsibility and Risk


(pp.4-5): S13. Various levels of operational responsibility are delegated through the Group Chief Executive to the Executive Committee, Divisional Chief Executives (CEO) and their Divisional committees. In turn, the Executive and divisional committees are supported by a specialist sub-committees and a number of processes that provide expertise and oversight in finance, risk management, and executive remuneration and succession planning

S14. The Executive Committee has delegated authority from the Serco Group plc Board

S15. The composition of the Executive Committee will be defined within the Committee’s terms of reference

S16. The Executive Committee will ensure the effective direction and control of the business and in particular will oversee the:

d. Succession and contingency planning of senior leadership within the Company and to approve the membership of the Executive Committee, Global Management Team and Divisional Executive

Management Teams

e. Structure and adequacy of the Serco Management System.

f. The values and ethical behaviour of the business, including determining the Company’s position in relation to markets, opportunities and activities that have been identified as presenting an ethical dilemma which have implications across or represent a significant reputational risk to the Group

g. Effective risk management of current and emerging risks facing the Group.

h. Systems to support business continuity and crisis management for the Group.

i. Effective management and monitoring of health, safety, environment and security performance.

j. Ensure that adequate procedures exist to meet legal and regulatory requirements such as bribery and corruption

k. Ensure appropriate remuneration and alignment of incentives of senior leadership within the Company

S18. The Executive Committee will define the structure of the organisation, including the establishment of Divisions and their responsibilities

S19. The Executive Committee annually will set objectives, targets and key performance indicators for the Group. Divisions will have regard to these when setting their own objectives, targets and key performance indicators

S20. The Executive Committee and the Divisions will monitor and review performance against key performance indicators, objectives and targets to identify trends and to assess and identify actions

S21. The Executive Committee will periodically provide reports to the plc Board and its Committees in respect of risk management, ethics, health, safety, environmental and security, corporate responsibility, financial and accounting judgements’

http://www.serco.com/Images/SMS-GS-G4_Internal%20Boards%20and%20Committees_Serco%20Public_tcm3-45715.pdf





‘In October 2013, we announced that we would establish a board committee for CR, to take

oversight of our approach to ethics, the structure of governance, risk management, health

and safety, and environmental matters. This committee, which met for the first time in

February 2014, will meet quarterly to receive formal progress reports against each element

of the CR framework. The CR Committee's terms of reference were formally approved in

February 2014 and are available here’

Rachel Lomax, one of our non-executive directors, is the board sponsor for CR and chairs the CR Committee. The Committee's other members are: Alastair Lyons, our chairman; Ed Casey, our acting Chief Executive; and two further non-executive directors, Mike Clasper and Tamara Ingram. The Chief Executive is responsible for promoting the Group’s CR strategy and its effective implementation across the Group. The Executive Committee is responsible for implementing our Group CR objectives’

‘The Director of Business Compliance and Ethics has responsibility for the Group’s Code of Conduct. Our Code and matters pertaining to our ethical position will be reviewed and monitored by the Corporate Responsibility Committee. We are clear on the ethical standards we expect from all employees and this is communicated through our Code of Conduct, which all employees receive. This is supported by training on the Code for all employees.’

http://www.cr2013-serco.com/CRGoverance.html#.U3NMAfldWSo

Annual Report (2013), p.73:

‘Recognising that ethical dilemmas may arise in a growing company, the Group has an ethics consultation process that is to be followed to determine the Group’s position on particular issues. To support this process the Investment and Ethics Committee, comprising members of the Executive Team with a quorum of three and chaired by the Director, Risk and Acquisitions, meets as required’


Group Standard on Business Conduct and Ethics (May 2013), p.12:

‘3.6 Investment and Ethics Committee

It is the responsibility of the Investment and Ethics Committee to:

S135. Review and approve the Company’s process for Dealing with Ethical Issues.

S136. Review and approve the Company’s Code of Conduct.

S137. Define, review and revise market guidance that is used by the business to identify ethical dimensions that need to be considered

S138. Maintain and review the ‘watch list’ of countries with poor human rights records

S139. Consider and define the Company’s position in relation to specific opportunities or

http://www.serco.com/investors/governance/termsreference/index.asp




issues raised by the business

S140. Consider and define the Company’s position on any other issues that present the organisation with an ethical dilemma.

Review issues that have been elevated through the whistleblowing process, monitor trends and review performance’

http://www.serco.com/Images/SMS_GS_G1-Business%20Conduct%20and%20Ethics_Serco%20Public_tcm3-36703.pdf




A7:

Has the company appointed a person at a senior level within the company to have responsibility for implementing the company’s ethics and anti-corruption agenda, and who has a direct reporting line to the Board?

Score:

2

Comments:

Based on public information, there is evidence that the Director of Business Compliance and Ethics is responsible for implementing the company’s anti-corruption agenda. The name of this individual is available on the company website: Robert Smith, Director of Business Compliance and Ethics.

References:

Public:


‘At Serco, we are committed to achieving high standards of corporate governance, integrity and business ethics in all our activities around the world. Serco has a system of internal controls, including financial, operational and compliance controls, management assurance, risk management and internal audit that combine to ensure that Serco operates safely and ethically, delivers a great service that is valued by our customers, employees and shareholders and the societies and communities to which we belong. This ensures that their interests are uppermost in all our minds as we go about our business, and that where these interests are not directly aligned, we make decisions on the basis of what is right; this is an essential part of our public service ethos.’

(p.4): S9. Many key Board responsibilities are referred to by four standing

board committees:

a. Audit

b. Nomination

c. Remuneration and

d. Corporate Responsibility and Risk

(pp.4-5): S13. Various levels of operational responsibility are delegated through the Group Chief Executive to the Executive Committee, Divisional Chief Executives (CEO) and their


Divisional committees. In turn, the Executive and divisional committees are supported by a specialist sub-committees and a number of processes that provide expertise and oversight in finance, risk management, and executive remuneration and succession planning

S14. The Executive Committee has delegated authority from the Serco Group plc Board

S15. The composition of the Executive Committee will be defined within the Committee’s terms of reference

S16. The Executive Committee will ensure the effective direction and control of the business and in particular will oversee the:

d. Succession and contingency planning of senior leadership within the Company and to approve the membership of the Executive Committee, Global Management Team and Divisional Executive

Management Teams

e. Structure and adequacy of the Serco Management System.

f. The values and ethical behaviour of the business, including determining the Company’s position in relation to markets, opportunities and activities that have been identified as presenting an ethical dilemma which have implications across or represent a significant reputational risk to the Group

g. Effective risk management of current and emerging risks facing the Group.

h. Systems to support business continuity and crisis management for the Group.

i. Effective management and monitoring of health, safety, environment and security performance.

j. Ensure that adequate procedures exist to meet legal and regulatory requirements such as bribery and corruption

k. Ensure appropriate remuneration and alignment of incentives of senior leadership within the Company

S18. The Executive Committee will define the structure of the organisation, including the establishment of Divisions and their responsibilities








Serco CR Governance:


‘In October 2013, we announced that we would establish a board committee for CR, to take

oversight of our approach to ethics, the structure of governance, risk management, health

and safety, and environmental matters. This committee, which met for the first time in

February 2014, will meet quarterly to receive formal progress reports against each element

of the CR framework. The CR Committee's terms of reference were formally approved in

February 2014 and are available here’

Rachel Lomax, one of our non-executive directors, is the board sponsor for CR and chairs the CR Committee. The Committee's other members are: Alastair Lyons, our chairman; Ed Casey, our acting Chief Executive; and two further non-executive directors, Mike Clasper and Tamara Ingram. The Chief Executive is responsible for promoting the Group’s CR strategy and its effective implementation across the Group. The Executive Committee is responsible for implementing our Group CR objectives’




http://www.serco.com/investors/governance/termsreference/index.asp



A8:

Is there regular Board level monitoring and review of the performance of the company’s ethics and anti-corruption agenda?

Score:

2

Comments:

Based on public information, there is evidence that the company monitors its ethics and anti-corruption agenda in a manner that is overseen and also reported back to the Board. Furthermore, TI notes that an independent review was carried out in 2013.

References:

Public:


‘S18. The Executive Committee will define the structure of the organisation, including the establishment of Divisions and their responsibilities






‘Review and Compliance audit

S39. Anti-bribery and corruption standards and procedures will be reviewed regularly to ensure their continuing suitability, adequacy and effectiveness in order to meet national legal and Group requirements.

S40. The review will consider any need for changes to policy and objectives and any other




elements in light of audit results, changing circumstances and the commitment to continual improvement.

S41. Reviews and significant findings will be documented.

S42. Anti-bribery and corruption controls will be periodically audited to provide a planned, independent and documented assessment of the compliance, effectiveness and adequacy of them.

S43. All audits will be completed in accordance with Internal Audit requirements defined in section 3.8 of the Group’s Internal Boards and Governance Group Standard.’



‘Following the challenges of 2013, we launched an independent review of our culture and ethics, and were reassured to find a workforce that believes strongly in Serco’s commitment to service excellence’

(p.53): ‘In October 2013, we announced that we would establish a Board committee for CR, to take oversight of our approach to ethics, the structure of governance, risk management and HSE matters. This committee, which met for the first time in February 2014, will meet quarterly to receive formal progress reports against each element of the CR framework.’






A8(a):

Is there a formal, clear, written plan in place on which the review of the ethics and anti-corruption agenda by the Board or senior management is based, and evidence of improvement plans being implemented when issues are identified?

Score:

1

Comments:

Based on public information, there is some evidence that the company has benchmarks and a review plan in place but its specific details remain unclear. The company therefore scores 1.

References:

Public:


‘S18. The Executive Committee will define the structure of the organisation, including the establishment of Divisions and their responsibilities






‘Following the challenges of 2013, we launched an independent review of our culture and ethics, and were reassured to find a workforce that believes strongly in Serco’s commitment to service excellence.”




“There was no evidence that Serco has a corrupt culture or that the Company knowingly encourages improper or unethical behaviour. What was identified was an environment in which Serco employees could make inappropriate decisions to achieve commercial success, and it is this environment that we are committed to change as a fundamental part of our corporate renewal.’

(p.53): ‘In October 2013, we announced that we would establish a Board committee for CR, to take oversight of our approach to ethics, the structure of governance, risk management and HSE matters. This committee, which met for the first time in February 2014, will meet quarterly to receive formal progress reports against each element of the CR framework.’

‘Towards the end of 2013, we therefore appointed an ethical lead in each division, who will be answerable to a divisional ethics committee, which has now been established.’




A9:

Does the company have a formal process for review and where appropriate update its policies and practices in response to actual or alleged instances of corruption?

Score:

2

Comments:

Based on public information, there is evidence that the company has a formal process that is concerned with the improvement and update of the ethics and anti-corruption plan. This can be seen particularly based on the company’s response to allegations that were made in 2013.

References:

Public:

Group Standard Speak Up (July 2014), p.4: ‘2.2 Complaint handling and investigation S6. A procedure will be implemented for the handling and reporting of malpractice or impropriety S7. Any manager notified of an issue will: a. ensure issues raised are taken seriously, properly reviewed with an objective assessment made or, where an independent investigation is conducted, ensure full provision of accurate and complete information and appropriate and timely participation of themselves and their employees b. inform the reporter whether an investigation will be conducted and timescales c. ensure that all necessary and appropriate actions to resolve valid issues are taken d. where appropriate, provide feedback to the reporter on the outcome and any action taken e. ensure there is no retaliation against any employee for raising an issue S8. All issues relating to the activities of the Company or individuals will be handled in accordance with Serco’s Speak Up issues handling procedures


S9. All issues will be reviewed and/or investigated by appropriate representative(s) of Serco S10. The purpose of any investigation will be to gather and establish the facts relating to specific incidents, events, claims or allegations S11. Investigations will be thorough, fair, balanced, transparent and, where appropriate, conducted under legal privilege S12. There should be no unreasonable delay in conducting and concluding any investigation S13. The investigator’s role will be to provide facts to enable informed decision making S14. Upon completion of an investigation, feedback will be provided to the original reporter of the issue S15. If the reporter is not satisfied with the outcome of the investigation and has appropriate grounds for appeal, this appeal will be submitted in writing, and will be reviewed by the Divisional CEO.’ (p. 5): ‘S19. Anonymous reports will be appropriately reviewed based upon the information reported; however Serco encourages individuals to report their issues directly since it believes that the ability to follow up with the reporting individual can aid in ensuring an appropriate review of issues raised S20. Serco will conduct an initial review in order to determine whether appropriate and adequate information exists upon which to conduct an investigation. In exercising this discretion, the factors to be taken into account will include the: a. seriousness of the issues raised, including determining whether the basis of the allegation more properly represents a divisional or contract management issue versus a malpractice or impropriety allegation b. credibility of the issue based upon the information presented and readily identifiable facts c. level of sufficient detail provided and whether an investigation can be initiated d. likelihood of confirming the issue from attributable sources or the ability to identify other information to assess the issue S21. The initial case review will also assess if the issue needs to be investigated under legal privilege S22. Where an investigation is undertaken under legal privilege all documentation will be marked ‘legally privileged and confidential’ and access to any investigation report and


associated documentation will be limited to thos who have specific involvement in the management of the case S23. If an individual makes malicious or vexatious allegations or otherwise acts in bad faith, they may be subject to disciplinary action.’

p. 9:

p.11:

http://www.serco.com/Images/SMS-GS-BC3_Speaking%20Up_Serco%20Public_tcm3-

http://www.serco.com/Images/SMS-GS-BC3_Speaking%20Up_Serco%20Public_tcm3-45746.pdf


45746.pdf


‘Review and Compliance audit

S39. Anti-bribery and corruption standards and procedures will be reviewed regularly to ensure their continuing suitability, adequacy and effectiveness in order to meet national legal and Group requirements.

S40. The review will consider any need for changes to policy and objectives and any other elements in light of audit results, changing circumstances and the commitment to continual improvement.

S41. Reviews and significant findings will be documented.

S42. Anti-bribery and corruption controls will be periodically audited to provide a planned, independent and documented assessment of the compliance, effectiveness and adequacy of them.

S43. All audits will be completed in accordance with Internal Audit requirements defined in section 3.8 of the Group’s Internal Boards and Governance Group Standard.'

http://www.serco.com/Images/SMS%20GSG1_

Jan11_Business%20Conduct%20and%20Ethics_Serco%20Public_tcm3-36703.pdf


‘Following the challenges of 2013, we launched an independent review of our culture and ethics, and were reassured to find a workforce that believes strongly in Serco’s commitment to service excellence.’

‘There was no evidence that Serco has a corrupt culture or that the Company knowingly encourages improper or unethical behaviour. What was identified was an environment in which Serco employees could make inappropriate decisions to achieve commercial success, and it is this environment that we are committed to change as a fundamental part of our corporate renewal.’

(p53):‘In October 2013, we announced that we would establish a Board committee for CR, to take oversight of our approach to ethics, the structure of governance, risk management and HSE matters. This committee, which met for the first time in February 2014, will meet quarterly to receive formal progress reports against each element of the CR framework.’

‘Towards the end of 2013, we therefore appointed an ethical lead in each division, who will be answerable to a divisional ethics committee, which has now been established.’





A9(a):

Does the company have a formal anti-corruption risk assessment procedure implemented enterprise-wide?

Score:

2

Comments:

Based on public information, there is evidence that the company has a formal risk assessment procedure for assessing ethics and corruption risks with plans and regular reviews in place.

References:

Public:

Group Standard Code of Business Conduct and Ethics (July 2014), pp.3-4:

‘2.3 Risk management and controls

S8. Ethical risks, including those of bribery, corrupt behaviour and human rights will be:

a. identified and assessed for existing business operations and markets

b. identified and assessed, along with appropriate due diligence, for new markets,

geographies, acquisitions, bids and rebid opportunities

c. identified and assessed, along with appropriate due diligence, for business partners and

agents as part of the procurement process and prior to entering into working arrangements

with them

S9. If a significant ethical risk or issue is raised, it will be reviewed by Divisional executive

management and direction agreed with the Divisional CEO. Agreed direction will be

reported to the Group CEO and Chief Operating Officer (COO), recorded and, subject to any

limitations and appropriate preservation of company legal or other privileges,

communicated to management and reported to the Executive Committee

S10. If the Divisional CEO and the Divisional Executive Management Team requires further

guidance, the issue will be raised to the Executive Committee for a final decision

S11. All significant ethical risks will be recorded within risk registers, with appropriate


controls implemented to manage the risk, in accordance with the Risk Management Group

Standard

S12. Ethical risks will be reviewed as part of the regular review of business risks

S13. Standards defined for risk management will be applied

2.4 Objectives targets and plans

S14. The Corporate Responsibility and Risk Committee will set and periodically review the

Group’s ethics strategy, objectives and targets

S15. Each Division will develop an ethics and compliance programme which will include

objectives and targets aligned to the Group strategy

S16. Each Division will monitor and report against agreed objectives and targets and their

ethics and compliance programme’

http://www.serco.com/Images/SMS-GS-

BC2_Business%20Conduct%20and%20Ethics_Serco%20Public_tcm3-45732.pdf


‘2.2.3.5 Business Lifecycle Reviews

S39. For all bids, projects and contracts in transition, the Divisional CEO will establish a

Business Lifecycle Review Team that will follow the requirements of the

Bidding/Transition/Operations Group Standards

S40. The Team will provide direction and lead each opportunity through its lifecycle, whilst

ensuring appropriate governance and Gate authorisation

S41. The Team will be led by the Divisional CEO and is accountable for acceptance and

mitigation of project risks

S42. The Team will be composed of people who together have the collective competency,

experience and expertise to direct the opportunity to a successful outcome and to ensure

the appropriate compliance with Contract Gate governance through the whole business

lifecycle, but as a minimum must include the following divisional representation:

a. CEO;

b. CFO;

c. General Counsel;

d. Chief Technology Officer;

e. Risk Officer

f. HR Director;

g. Business Development Director and

h. the relevant Business Unit Managing Directors.

http://www.serco.com/Images/SMS-GS-BC2_Business%20Conduct%20and%20Ethics_Serco%20Public_tcm3-45732.pdf



S43. Additional members of the Team will be dependent on the size, complexity, technical

and management solution required for the opportunity and to be determined by the

Divisional CEO

S44. Members must obtain prior permission from the Divisional CEO should they wish to

nominate a substitute to attend Team meetings in their place

S45. The Team will agree at Gate 1, the frequency at which subsequent bid reviews will be

held between Gates

S46. The Divisional CEO will set clearly defined roles, responsibilities and accountabilities of

all members and other stakeholders who may become involved in reviews and the defined

mechanisms by which these will be met, documented and agreed by the Team

S47. During the lifecycle process (at a point referred to as Gate 5), it is possible that the

composition of the Team will start to evolve to carry out transition reviews (as prescribed by

the Transition Group Standard7), or adopt agreed formal governance and oversight

processes (as outlined elswhere in this standard or in the Operations Group Standard8),

which after Gate 7 will have responsibility for service delivery, each as required and

determined by Divisional management’

(p.13): ‘A Group Internal Boards and Committees

Policy Lead is appointed by the Group CEO with responsibility for:

reflect legislative and regulatory requirements and effectively manage risks

f Boards and Committees

Ensuring Boards and Committees:

- are held at the required frequency

- are quorate

- have agreed terms of reference

- maintain a membership list

- follow stipulated agendas

- produce and retain accurate minutes detailing issues and decisions’


G4_Internal%20Boards%20and%20Committees_Serco%20Public_tcm3-45715.pdf

Annual Report (2013), p.71: ‘Whilst Divisional Boards review quarterly the risks they face,

the Group Risk Management and Safety Committee (GRMSC), a formal committee of the

Executive Committee, meets quarterly to provide governance and oversight of risk across




the Group. The Corporate Responsibility Committee of the Board receives a quarterly report

on the GRMSC’s assessment of the principal risks facing the Group and the action being

taken by management to mitigate risks that are outside of the Group’s risk appetite.

Our risk management policies, systems and processes align to the guidance contained

within the UK Corporate Governance Code and form part of the Serco Management System

(SMS).

Such systems and processes, however, can only be designed to mitigate, rather than

eliminate the risk of failure to achieve business objectives, and can only provide reasonable

and not absolute assurance against misstatement or loss. The Board confirms that this

process has been in place for the year under review and up to the date of approval of the

2013 Annual Report and Accounts.’




A10:

Does the company have a formal anti-corruption risk assessment procedure for assessing proposed business decisions, with clear requirements on the circumstances under which such a procedure should be applied?

Score:

2

Comments:

Based on public evidence, there is evidence that the company has a formal risk assessment procedure and that it conducts an ethical risk assessment to inform business decisions.

References:

Public:


‘2.2.3.5 Business Lifecycle Reviews

S39. For all bids, projects and contracts in transition, the Divisional CEO will establish a

Business Lifecycle Review Team that will follow the requirements of the

Bidding/Transition/Operations Group Standards

S40. The Team will provide direction and lead each opportunity through its lifecycle, whilst

ensuring appropriate governance and Gate authorisation

S41. The Team will be led by the Divisional CEO and is accountable for acceptance and

mitigation of project risks

S42. The Team will be composed of people who together have the collective competency,

experience and expertise to direct the opportunity to a successful outcome and to ensure

the appropriate compliance with Contract Gate governance through the whole business

lifecycle, but as a minimum must include the following divisional representation:

a. CEO;

b. CFO;

c. General Counsel;

d. Chief Technology Officer;

e. Risk Officer


f. HR Director;

g. Business Development Director and

h. the relevant Business Unit Managing Directors.

S43. Additional members of the Team will be dependent on the size, complexity, technical

and management solution required for the opportunity and to be determined by the

Divisional CEO

S44. Members must obtain prior permission from the Divisional CEO should they wish to

nominate a substitute to attend Team meetings in their place

S45. The Team will agree at Gate 1, the frequency at which subsequent bid reviews will be

held between Gates

S46. The Divisional CEO will set clearly defined roles, responsibilities and accountabilities of

all members and other stakeholders who may become involved in reviews and the defined

mechanisms by which these will be met, documented and agreed by the Team

S47. During the lifecycle process (at a point referred to as Gate 5), it is possible that the

composition of the Team will start to evolve to carry out transition reviews (as prescribed by

the Transition Group Standard7), or adopt agreed formal governance and oversight

processes (as outlined elsewhere in this standard or in the Operations Group Standard8),

which after Gate 7 will have responsibility for service delivery, each as required and

determined by Divisional management’

(p.13): ‘A Group Internal Boards and Committees

Policy Lead is appointed by the Group CEO with responsibility for:

ng standards and associated procedures and key controls remain fit for purpose,

reflect legislative and regulatory requirements and effectively manage risks

Ensuring Boards and Committees:

- are held at the required frequency

- are quorate

- have agreed terms of reference

- maintain a membership list

- follow stipulated agendas

- produce and retain accurate minutes detailing issues and decisions’


G4_Internal%20Boards%20and%20Committees_Serco%20Public_tcm3-45715.pdf




Company Website, Dealing with ethical issues (updated 2014):

‘We are transparent about our handling of ethical, social and human rights issues so that we are clear about how we have reached our decisions.

Each Divisional Board reviews ethical and social considerations as part of its annual strategic planning round. Ethical dilemmas are also assessed and considered within the Business Lifecycle process.

All new geographic markets are assessed for potential human rights issues by applying our Human Rights Decision Tree process.

Serco will consider operating in countries with known human rights issues, provided we are not connected to abuses. This includes abuses by third parties which we are associated with through our operations. Serco does not intend to work in countries where: we would be breaching international sanctions, or the local population has shown (for example through fair elections) that it does not want foreign businesses operating in the country.

Where we have influence and believe we can use that influence to improve others' respect for human rights, we have the option but not the requirement to do so.

If a significant ethical or human rights consideration is raised, it is reviewed by Divisional executive management. Agreed direction is then communicated to management. Where a significant ethical issue arises it is raised for debate by the Divisional Board.

If the Divisional Board requires further guidance, the issue is raised to the Ethics Committee for a final decision.

The Ethics Committee determines Serco's position in relation to new geographic markets, opportunities and activities that have been identified as presenting an ethical dilemma which:

have implications across the Group

represent a significant reputational risk to the Group

a Divisional or Group Function wishes to seek clarification on the Company's position on

The Ethics Committee regularly reviews and approves a 'watch list' of countries with poor human rights records. All opportunities in countries on the 'watch list' are approved by the Ethics Committee.’

http://www.serco.com/about/sms/businessconductandethics/dealingwithethicalissues/

Annual Report (2013),,p. 60: ‘Going forward, through leadership, training and guidance, and appropriate incentivisation, we will change the balance of drivers within our business such that the commitment to do what is right and to deal with our customers fairly and transparently always transcends that sustained drive to succeed. This will be supported by the right management structures and controls and best-in-class lines of assurance to ensure that through early identification of risks and issues and their swift resolution we never again compromise on our values and ethics.’

(p.65): ‘We have clearly defined roles and responsibilities at Board level and below it, to seek to ensure that decisions throughout the organisation are soundly based and risks are appropriately controlled and monitored.’

http://www.serco.com/about/sms/businessconductandethics/dealingwithethicalissues/


(p. 71): ‘In identifying the potential risks associated with the achievement of our business objectives, we consider both external factors arising from the environment within which we operate, and internal risks arising from the nature of our business, its controls and processes, and our management decisions.’

(p.73):‘Serco Group operates within a management system that defines the policies, standards and processes to be applied wherever we operate. Integral to this is our policy on Business Conduct and Ethics that applies to all business divisions, operating companies and business units throughout the world. This policy outlines the Group’s position on a wide range of ethical and legal issues including conflicts of interest, financial inducements, human rights and legal and regulatory compliance. It applies to directors and to all employees regardless of their position or location. Recognising that ethical dilemmas may arise in a growing company, the Group has an ethics consultation process that is to be followed to determine the Group’s position on particular issues’




A11:

Does the company conduct due diligence that minimises corruption risk when selecting or reappointing its agents?

Score:

1

Comments:

Based on public information, there is evidence that the company does carry out a process of due diligence in reference to selecting or re-appointment of its agents. However, it is not clear that the due diligence is refreshed at least every three years or when there is a significant change in the business relationship. The company therefore scores 1.

References:

Public:


‘Risk assessment

S29. The risks of bribery and corrupt behaviour will be understood for existing markets and assessed for new markets, bids and rebid opportunities as part of the Business Lifecycle Governance Process.

S30. Appropriate assessments of risks related to business partners will be conducted as part of the procurement process and prior to entering into working arrangements with them, see section 3.7 in Internal Boards and Governance.’

‘2.4.4 Use of third parties and agents

S78. The selection of agents or other third parties to represent Serco’s interests will include: – a thorough check of the representative’s reputation and qualifications of each such agent or other third party representative. Proper consideration will be given to any history of improper business practices. No relationships should exist that could improperly influence decisions – a clear, written statement of the work to be conducted by such individuals or entities; a requirement to have regular reports of the actions completed; and agreement to comply with sound standards of business conduct and ethics that are consistent with Serco’s Group Standard on Business Conduct and Ethics – an assessment that the proposed fee is reasonable for the services being rendered and that it does not provide incentives to act improperly nor provide reimbursement for a facilitation payment.’

http://www.serco.com/Images/SMS_GS_G1-



Business%20Conduct%20and%20Ethics_Serco%20Public_tcm3-36703.pdf



A12:

Does the company have contractual rights and processes for the behaviour, monitoring, control, and audit of agents with respect to countering corruption?

Score:

1

Comments:

Based on public information, there is evidence that the company has contractual rights and processes for the behaviour of agents with respect to countering corruption. However, the extent to which the company has monitoring and auditing rights is not clear. The company therefore scores 1.

References:

Public:

Group Standard Code of Business Conduct and Ethics (July 2014), p.11:

‘2.15 Use of third parties and agents

S94. The selection of agents or other third parties to represent Serco’s interests will include:

a. a thorough check of the representative's reputation and qualifications of each such agent or other third party representative.

Proper consideration will be given to any history of improper business practices. No relationships should exist that could improperly influence decisions

b. a clear, written statement of the work to be conducted by such individuals or entities; a requirement to have regular reports of the actions completed; and agreement to comply with sound standards of business conduct and ethics that are consistent with this standard

c. an assessment that the proposed fee is reasonable for the services being rendered and that it does not provide incentives to act improperly nor provide reimbursement for a facilitation payment

S95. Before entering into any commercial agreements with third parties, any competition concerns will be raised with the Divisional Legal Representative as soon as they are known

S96. The following will always be cleared with the Divisional Legal Representative, except pursuant to a fully executed joint venture, and any teaming agreement or subcontract issued there under where the joint venture has received independent legal counsel concerning the business opportunity in question:


a. any understanding with a non-Serco company on Serco’s contract pricing except in the ordinary course of dealings with Serco’s customers

b. agreements with business partners of longer than 5 years duration

c. exclusive agreements, i.e. agreements under which suppliers are not allowed to purchase or provide supplies or services to any of Serco’s competitors (or vice versa)

d. any situation in which Serco is able to exercise market power by agreement with others or because of Serco’s own position in the market

e. agreements tying the supply of one service or product with another (e.g. catering and cleaning services). However, agreements under which Serco provides a range of services may well be acceptable so long as the provision of one service is not conditional upon the customer also engaging Serco for other services

f. joint venture agreements, teaming agreements and subcontracts with competitors of Serco, except as authorised in accord with the Joint Ventures and Alliances section in the Business Development Group Standard’


Supplier Code of Conduct (August 2014), Section 6, p.14:

‘Communication, Monitoring and Compliance

Serco Suppliers should communicate, through its existing ethical operating standards/practices or through this Code that its workers, supervisors and its permitted subcontractors are aware of the requirements detailed in this Code.

Serco reserves the right to do such things as announced and unannounced inspections of facilities, to ensure compliance with this Code. Serco Suppliers must maintain at each facility all documents necessary to demonstrate compliance with the Code. Serco Suppliers must allow representatives from Serco and, if requested, Serco’s customers, full access to facilities, documents, worker records and workers for confidential interviews in compliance with local laws.

Serco Suppliers are expected to take necessary corrective actions to promptly remedy any identified non-compliance. Serco reserves the right to terminate its business relationship with any Serco Supplier who is unwilling or unable to comply with this Code when termination is allowed by local laws. We encourage Serco Suppliers to communicate to us any actions taken to improve its business practices and to send us suggestions about how Serco can best contribute to the implementation of the principles set out in this Supplier Code of Conduct.

Full details of Serco’s Governing Principles, Code of Conduct, Policies and Standards are available on www.serco.com.

If you have questions about our Supplier Code of Conduct, please contact Serco at [email protected].’

http://www.serco.com/Images/Serco%20Supplier%20Code%20of%20Conduct_tcm3-41455.pdf






Group Standard on Business Conduct and Ethics (May 2013), p. 6:

'S34. Suppliers and other business partners will be informed about Serco’s expectations in respect of bribery and corruption and the consequences if any of their employees were found to be involved in such practices.'

'S34. Suppliers and other business partners will be informed about Serco’s expectations in respect of bribery and corruption and the consequences if any of their employees were found to be involved in such practices.'

(p.9): ‘2.4.4 Use of third parties and agents

S78. The selection of agents or other third parties to represent Serco’s interests will include: – a thorough check of the representative's reputation and qualifications of each such agent or other third party representative. Proper consideration will be given to any history of improper business practices. No relationships should exist that could improperly influence decisions – a clear, written statement of the work to be conducted by such individuals or entities; a requirement to have regular reports of the actions completed; and agreement to comply with sound standards of business conduct and ethics that are consistent with Serco’s Group Standard on Business Conduct and Ethics – an assessment that the proposed fee is reasonable for the services being rendered and that it does not provide incentives to act improperly nor provide reimbursement for a facilitation payment.’





A13:

Does the company make clear to contractors, sub-contractors, and suppliers, through policy and contractual terms, its stance on bribery and corruption and the consequences of breaches to this stance?

Score:

2

Comments:

Based on public information, there is evidence detailing the company’s policy to convey its stance on corruption to its suppliers and other associated parties and the consequences of breaches to this stance.

References:

Public:

Supplier Code of Conduct (August 2014), p.8:

‘3.1 Bribery, Corruption and Facilitation Payments

Bribery is offering, providing or receiving something of value – including cash, gifts, hospitality or entertainment – as an inducement or reward for something improper. Usually, but not always, it’s to obtain or retain business or some other illegitimate advantage. Bribes are against the law and against our code, no matter what the “local custom” may be.

A facilitation payment refers to the practice of paying a small sum of money to (usually) an official as a way of ensuring they perform their duty. UK legislation forbids facilitation payments anywhere in the world.

Corruption involves any of these activities: bribery, extortion, fraud, deception, collusion, cartels, abuse of power, embezzlement and money laundering.

Engaging in bribery and corruption and making facilitation payments can seriously damage our reputation and business relationships.

We never offer, give or receive bribes or improper payments, or participate in any kind of corrupt activity, either directly or through any third party.

We expect our suppliers to apply the same stringent principles.

Serco Suppliers should not engage in any form of commercial bribery or kick-back scheme. Suppliers acting on behalf of the company must comply with applicable anti-bribery laws as well as all local laws dealing with bribery of government officials.

In connection with any transaction related to the manufacture, distribution or delivery of


goods or services to the company or that otherwise involves the company the supplier must not offer, promise, authorise, give, demand or accept any gift, loan, fee, reward or other advantage to or from any person as an inducement; to do something which is dishonest, illegal or a breach of trust; to obtain, retain or direct business; or to secure any other improper advantage.

Under these standards, improper payments include offers,promises, authorisations or payments of anything of value to expedite routine government actions.

We expect our suppliers to implement appropriate and adequate procedures for their employees to comply with applicable anti-corruption laws and these standards.

The help, advice and local knowledge of agents and other consultants or contractors can sometimes be essential. However, we require them to operate at all times in accordance with our standards, particularly in relation to bribery and corruption.’

(p.14): Section 6:

‘Communication, Monitoring and Compliance

Serco Suppliers should communicate, through its existing ethical operating standards/practices or through this Code that its workers, supervisors and its permitted subcontractors are aware of the requirements detailed in this Code.

Serco reserves the right to do such things as announced and unannounced inspections of facilities, to ensure compliance with this Code. Serco Suppliers must maintain at each facility all documents necessary to demonstrate compliance with the Code. Serco Suppliers must allow representatives from Serco and, if requested, Serco’s customers, full access to facilities, documents, worker records and workers for confidential interviews in compliance with local laws.

Serco Suppliers are expected to take necessary corrective actions to promptly remedy any identified non-compliance. Serco reserves the right to terminate its business relationship with any Serco Supplier who is unwilling or unable to comply with this Code when termination is allowed by local laws. We encourage Serco Suppliers to communicate to us any actions taken to improve its business practices and to send us suggestions about how Serco can best contribute to the implementation of the principles set out in this Supplier Code of Conduct.

Full details of Serco’s Governing Principles, Code of Conduct, Policies and Standards are available on www.serco.com.

If you have questions about our Supplier Code of Conduct, please contact Serco at [email protected].’



‘S34. Suppliers and other business partners will be informed about Serco’s expectations in respect of bribery and corruption and the consequences if any of their employees were found to be involved in such practices.

S29. The risks of bribery and corrupt behaviour will be understood for existing markets and assessed for new markets, bids and rebid opportunities as part of the Business Lifecycle




Governance Process.

S30. Appropriate assessments of risks related to business partners will be conducted as part of the procurement process and prior to entering into working arrangements with them, see section 3.7 in Internal Boards and Governance’





A13(a):

Does the company explicitly address the corruption risks associated with offset contracting?

Score:

NA

Comments:

The company has informed TI that it does not engage in offset contracting.

References:

NA


A13(b):

Does the company conduct due diligence that minimises corruption risk when selecting its offset partners and offset brokers?

Score:

NA

Comments:

The company has informed TI that it does not engage in offset contracting.

References:

NA


A15:

Does the company have an anti-corruption policy that prohibits corruption in its various forms?

Score:

2

Comments:

Based on public information, there is evidence that the company has an anti-corruption policy that prohibits corruption in its various forms.

References:

Public:

Company Website, Our Code (July 2014):

‘Bribery and Corruption

Even on the smallest scale, corruption is corrosive, and just the suspicion of it can severely

damage our reputation.

No matter what "local custom" may be, all forms of bribery and corruption, and even the

smallest facilitation payment, are forbidden. Corruption Corruption is any unlawful or improper behaviour that seeks to gain an advantage through illegitimate means. Bribery, abuse of power, extortion, fraud, deception, collusion, cartels, embezzlement and money laundering are all forms of corruption. Bribery Bribery means giving or receiving an unearned reward to influence someone's behaviour. One common form of bribery is a "kickback" - an unearned reward following favourable treatment. Both are corrupt. Facilitation Payments Facilitation Payments are sums of money paid to an official to speed up or "facilitate" their actions. That's why they are sometimes referred to as "grease" or "speed" payments. Whatever the local custom, Our Code forbids facilitation payments to be made anywhere in the world. We make no distinction between them and bribes, no matter how small the amount. UK Bribery Act As a UK based Company we must comply with the UK Bribery Act. It applies to every Serco


employee wherever they work around the world, and anyone who works on our behalf. Even if you’re not a UK national and the offence is outside the UK you could be prosecuted, and Serco could receive serious fine and damage to our reputation.

We will not offer, accept, solicit or pay a bribe or facilitation payment.

Stop and Think! Sometimes doing wrong can seem right. For instance, when a small illegitimate payment would prevent a project falling behind schedule, it may seem harmless to pay up. Never be tempted to do so. Remember: we would rather forego business or lose money than become involved in corruption even on the smallest scale. Be very cautious when giving or receiving gifts or entertainment. (See "Gifts and Hospitality") A partner's giving bribes, but not on our contract. Not our business? Not sure if it's right or wrong? Check out our SayNo Toolkit and App. You can find it online athttp://serco.saynotoolkit.net For more information visit:

Business Conduct and Ethics Group Standard Or download the Bribery and Corruption fact sheet.’

http://codeofconduct.serco.com/OurCode/index.aspx

http://codeofconduct.serco.com/OurBusiness/BriberyAndCorruption/index.aspx

Group Standard on Business Conduct and Ethics (May 2013), p. 5:

‘2.1.7 Anti-bribery and corruption

S25. Serco supports the aims of global bodies such as the Organisation for Economic Co-operation and Development (OECD) to combat bribery and corruption. We will comply with national anti-bribery and corruption legislation that is applicable to our business, at a minimum.

S26. No Serco employee, its agents, representatives, joint venture partners or other third parties employed by Serco will:

– offer, promise, give, accept, condone, approve or knowingly benefit from an improper business gratuity, a bribe, ‘kickback’ or other improper advantage, benefit or reward, or otherwise apply inappropriate influence;'


http://serco.saynotoolkit.net/


http://codeofconduct.serco.com/Assets/05_Factsheet_Bribery.pdf





A16:

Is the anti-corruption policy explicitly one of zero tolerance?

Score:

2

Comments:

Based on public information, there is evidence that the company has a zero tolerance against corruption. Its anti-corruption stance is clear and visible throughout the company’s policies.

References:

Public:

Supplier Code of Conduct (August 2014), p.8:

‘We never offer, give or receive bribes or improper payments, or participate in any kind of corrupt activity, either directly or through any third party.’



‘2.9 Anti-bribery and corruption

S33. Serco operates a policy of zero tolerance in regard to bribery and corruption

S34. Serco supports the aims of global bodies such as the Organisation for Economic Co-operation and Development (OECD) to combat bribery and corruption. Serco will comply as a minimum with national anti-bribery and corruption legislation that is applicable to the business

S35. No Serco employee, their agents, representatives, joint venture partners or other third parties employed by Serco will:

a. offer, promise, give, accept, condone, approve or knowingly benefit from an improper business gratuity, a bribe, ‘kickback’ or other improper advantage, benefit or reward, or otherwise apply inappropriate influence; or

b. make a ‘facilitation payment’. A facilitation payment refers to the practice of paying a small sum of money to (usually) an official as a way of ensuring they perform their duty.




Current UK legislation forbids facilitation payments anywhere in the world’


Code of Conduct, p.22:

‘We will never offer, accept, solicit or pay a bribe or facilitation payment.

Under no circumstances will Serco approve any irregular payment or payment in kind (such as gifts or favours) to win business, encourage others to act improperly or influence a decision in our favour. If you give or take bribes or engage in any other corruption, you will face disciplinary action and, if appropriate, criminal proceedings.

Paying a small sum of money to an official to speed up their actions is known as a facilitation payment. We make no distinction between facilitation payments and bribes, no matter how small the amount. Facilitation payments are illegal in most countries in which we operate and UK law forbids them anywhere in the world.

Our position is clear: we will not make facilitation payments and we do not allow others who work for or represent us to make them’

http://codeofconduct.serco.com/


‘2.1.7 Anti-bribery and corruption

S25. Serco supports the aims of global bodies such as the Organisation for Economic Co-operation and Development (OECD) to combat bribery and corruption. We will comply with national anti-bribery and corruption legislation that is applicable to our business, at a minimum.

S26. No Serco employee, its agents, representatives, joint venture partners or other third parties employed by Serco will:

– offer, promise, give, accept, condone, approve or knowingly benefit from an improper business gratuity, a bribe, ‘kickback’ or other improper advantage, benefit or reward, or otherwise apply inappropriate influence;'







A17:

Is the company's anti-corruption policy easily accessible to Board members, employees, contracted staff and any other organisations acting with or on behalf of the company?

Score:

2

Comments:

Based on public information, there is evidence that the company’s anti-corruption policy contained in its Code of Conduct and Group Standard on Business Conduct and Ethics are easily available and accessible online. TI notes that the Code of Conduct is available in Arabic, Brazilian Portuguese, Chinese, Dutch, English, Flemish, French, German, Italian, Polish and Spanish.

References:

Public:



Group Standard on Business Conduct and Ethics


http://www.serco.com/about/sms/businessconductandethics/



Five Foundation Stones:

http://www.serco.com/about/culture/foundation/index.asp











A17(a):

Is the company’s anti-corruption policy easily understandable and clear to Board members, employees and third parties?

Score:

2

Comments:

Based on public information, there is evidence that the company’s anti-corruption policy easily is understandable and clear to Board members, employees and third parties.

References:

Public:



Group Standard on Business Conduct and Ethics





Five Foundation Stones:












A18:

Does the anti-corruption policy explicitly apply to all employees and

members of the Board?

Score:

1

Comments:

Based on public information, there is evidence that the company’s anti-corruption policy applies to all employees regardless of their position. However, it is not clear from publicly available information that this also applies to Board members. The company therefore scores 1.

References:

Public:

Company Website, Code of Conduct (July 2014):

‘When Our Code refers to "You" that doesn't mean some people don't have to comply. "You" means all of us, whatever job we do at Serco. It also includes everyone who works with us in a full time, part time or temporary job, and all the contractors we work with around the world. We are also determined to only work with partners, third parties and customers whose standards are consistent with ours.’ http://codeofconduct.serco.com/OurCode/KnowIt/index.aspx Group Standard Consequence Management (July 2014), p.3: ‘The provisions of the Code and the Policies apply to every employee without exception. If any employee violates the Code or the Company’s policies, or otherwise acts illegally, or in breach of any applicable law or regulations, the violation will be investigated and, where the investigation has confirmed a violation, the employee will be subject to disciplinary action Company training video: ‘Wherever we work, whatever our position, the Code applies to all’ (14:58) http://thisisrare.co.uk/serco/training_video/video.html

Code of Conduct:

‘The Code, along with our policies and standards, apply wherever Serco operates around the

http://codeofconduct.serco.com/OurCode/KnowIt/index.aspx



World. Each country has its own laws, regulations, customs and expectations. You must apply either the Code or your local requirements, whichever sets the higher standard’



‘It is the responsibility of all employees to:

S103. Conduct business in accordance with the laws of the country in which business is being transacted and that are otherwise applicable to our work.

S104. Comply with the Company's published procedures and policies.’





A20:

Does the company have a policy on potential conflicts of interest, and does it apply to both employees and board members?

Score:

2

Comments:

Based on public information, there is evidence that the company has a policy on potential conflicts of interest, and it applies to both employees and Board members. TI notes that a definition of conflict of interest is provided.

References:

Public:

Company Website, Code of Conduct, Conflicts of Interest (updated 2014):

Conflicts of interest lead to unfair, dishonest and even corrupt behaviour. They can also

break the law. They can cause serious problems for you and real damage to our integrity

and reputation.

Even when there's no actual conflict just the appearance of one can do serious harm. A Conflict of Interest When your private interests interfere, or could appear to interfere, with the best interests of Serco, it's a conflict of interest. Your own business judgement may be improperly influenced as result of the conflict, or because you or someone you know may benefit to the expense of the company or another employee. Organisational Conflicts of Interest When a company could end up with an unfair competitive advantage in the market, it's an Organisational Conflict of Interest (OCI). If we don't identify and resolve these, they can do enormous harm. One example is when we employ someone who has access to proprietary information or who might be able to influence government decisions that could benefit Serco. This is called "Unequal Access to Information". But there are other kinds of OCIs as well. Whenever you think there may be an OCI you should raise it at once. Just the appearance of a conflict of interest can do serious damage.

Examples of actual or potential conflicts of interest

Serco is competing for work from a customer you are advising. You have secondary employment. You, your spouse, partner or family member:


o has a financial interest in any company or business venture we do business with.

o is employed by any other Serco business or joint venture. o is employed by a direct competitor to any other Serco business or joint

venture. o is employed by a supplier of goods or services to Serco.

As a leader or manager you find yourself making an employment decision relating to a spouse, partner, close family member or friend.

You become aware of conditions that might compromise impartiality or neutrality so Serco will benefit unfairly.

You know competitive terms are unequal, favouring one company over another.

My ex-partner supplies a Serco business. Should I declare that?

Not sure if there's a conflict? Ask.

Could it look like a conflict? Declare it.

For more information, help and advice, check out our SayNo Toolkit and App.

You can find it online athttp://serco.saynotoolkit.net

Download the Conflicts of Interest fact sheet.

http://codeofconduct.serco.com/OurBusiness/ConflictsOfInterest/index.aspx


‘A conflict of interest is a situation in which an employee has competing professional or personal interests. Such competing interests can make it difficult for individuals to fulfil their duties impartially. A conflict of interest may exist even if no unethical or improper act results from it.

S59. All actual and potential conflicts of interest will be identified, declared, recorded, monitored and managed

S60. Where employees, directors or officers have an actual, potential or suspected conflict of interest, or discover or suspect others of having an actual or potential conflict of interest, they will put the interests of the Company first and report it to their line manager and their next level manager.

S61. Employees, directors and officers acting as a member of a committee or board will raise the actual or potential conflict of interest at the earliest opportunity at a meeting of the committee or board and the item will be minuted.

S62. Approval from an employee’s line manager, their next level manager and HR department will be gained before an employee starts any work with another company, whilst working for Serco.

S63. Ownership by an employee, their partner, spouse or family member of a significant financial interest (5% of outstanding stock of a public company or any ownership interest in a company that is not publicly traded) in a competitor, or in a customer, consultant, subcontractor, supplier or other business partner must be declared to the employee’s line manager and their next level manager if they or one of their subordinates deals with such


http://codeofconduct.serco.com/Assets/08_Factsheet_conflicts.pdf

http://codeofconduct.serco.com/OurBusiness/ConflictsOfInterest/index.aspx


individuals or entity.’



‘A conflict of interest occurs when your private interests interfere, or appear to interfere, with the best interests of Serco. A conflict of interest may also arise when your personal interests adversely impact your business judgement. Conflicts of interest can cause serious problems for you and damage our reputation. You should avoid actual conflicts of interest as well as the appearance of them. Make business decisions on behalf of Serco rather than your own personal interests or the interests of your family or friends.’






A21:

Does the company have a policy for the giving and receipt of gifts to ensure that such transactions are bona fide and not a subterfuge for bribery?

Score:

1

Comments:

Based on public information, there is evidence that the company has a policy on the giving and acceptance of gifts that guards against corruption. However, information on upper limits or authorisation thresholds of the same is not clear. The company therefore scores 1.

References:

Public:

Code of Conduct, Gifts and Hospitality Factsheet (July 2014), p.2:


(p. 3): To gift or not to gift, that is the question.


Equally, what constitutes a non-trivial gift or hospitality? One way to determine what is legitimate is to assess whether such act would alter or influence a business relationship. If so, then a gift is not a gift, it becomes a form of bribery. To help employees manoeuvre this complicated terrain, some companies choose to place a monetary limit on the value of gifts that can be offered or accepted. At first this may seem to be the perfect solution to the problem, but it soon becomes obvious that what may seem to be a symbolic monetary value to a senior executive, could be worth significantly more to a junior employee.

In addition, senior managers may be required to attend or sponsor a VIP-type event where hospitality cost can easily surpass the established cap. Subsequently, it can get very complicated if different monetary values are designated according to different management levels. Especially, as the exact value of a high-profile event is hard to determine. In addition, multinational companies need to consider how monetary values are perceived in the different countries where they operate. For example, a £30 limit on gifts in the UK may be considered lavish to some employees in developing countries.’

http://codeofconduct.serco.com/Assets/06_Factsheet_Gift_Hospitality.pdf


‘2.10 Gifts, gratuities and entertainment

S38. Gifts, gratuities or entertainment of any kind will not be requested, given or accepted if this action could be reasonably regarded as unduly influencing the recipient or creating a business obligation on the part of the recipient. This applies to direct payments and payments in kind, including the provision of goods or services, personal favours, and entertainment (e.g. meals, travel, etc.)

S39. Accepting or offering gifts of nominal value or entertainment that is of a reasonable nature, infrequent in nature and in the course of a meeting or another occasion for the purpose of bona fide business discussions or to foster better business relations may be acceptable in situations where it is legal and in accordance with local business practice (i.e. where the exchange of gifts is customary and the gifts are appropriate for the occasion)

S40. Serco may be restricted in its ability to offer certain types of payments or other things of value to government employees or public officials by international anti-corruption and/or anti-bribery standards and various, related national laws. Company representatives will obtain guidance and approval before making such payments or offering items of value

S41. The monetary value of the gift, local customs and legal requirements will be considered when determining whether a gift should be retained by an employee, handed to the Company, or returned. Employees should consult Serco management for guidance

S42. If it is decided that a gift can be retained and is handed to the Company, the gift should be donated to a nominated charity or made available to all employees in the work unit

S43. In no event will an employee offer or accept a gift where it is prohibited by law or is known by the individual to be contrary to law or the corporate business practices of the company employing the person offering or accepting the gift

S44. When accepting or offering gifts or entertainment it is important that the action is free from even the perception that it may infer that favourable treatment was sought, received



or given in exchange for receipt of a business courtesy

S45. The marketing and sale of Serco’s products and services must be free from even the perception that favourable treatment was sought, received, or given in exchange for the offering of business courtesies.

No business courtesies will be offered that would constitute, or could reasonably be determined to constitute, unfair business inducements, that are otherwise prohibited by law, regulation, or the policies of customers or business partners, or that could otherwise negatively affect the reputation of Serco

S46. The following items will not be given or accepted under any circumstances, regardless of their value: cash, securities, personal cheques or payments to or for the benefit of individuals

S47. Special consideration must be given by Serco employees who are involved in the acquisition or other purchase of goods or services for Serco to ensure uniform and fair treatment for all suppliers. Therefore, any person involved in procurement or related actions, not just the Procurement Function, must not accept gifts from consultants, subcontractors, suppliers or other vendors, with the exception that they may accept advertising or promotional items of nominal value, such as pens, key chains, coffee mugs, or similar items displaying a company’s logo

S48. Gifts and hospitality over an agreed value(10) must be approved and registered(11)

10 All items valued at £250 or above although local procedures may set lower limits

11 Gifts and hospitality should be registered at https://gandh.serco.com



'2.4.5 Gifts, gratuities and entertainment

S81. Gifts, gratuities or entertainment of any kind will not be requested, given or accepted if this action could be reasonably regarded as unduly influencing the recipient or creating a business obligation on the part of the recipient. This applies to direct payments and payments in kind, including the provision of goods or services, personal favours, and entertainment (e.g. meals, travel, etc.).

S82. Accepting or offering gifts of nominal value or entertainment that is of a reasonable nature, infrequent in nature and in the course of a meeting or another occasion for the purpose of bona fide business discussions or to foster better business relations may be acceptable in situations where it is legal and in accordance with local business practice (i.e. where the exchange of gifts is customary and the gifts are appropriate for the occasion). S83. Serco may be restricted in its ability to offer certain types of payments or other things of value to government personnel or public officials by international anti-corruption and/or anti-bribery standards and various, related national laws. Company representatives will obtain guidance and approval before making such payments or offering items of value.

S84. The monetary value of the gift, local customs and legal requirements will be considered




when determining whether a gift should be retained by an employee, handed to the Company, or returned. Company representatives should consult Serco management for guidance. If it is decided that a gift can be retained and is handed to the Company, the gift should be donated to a nominated charity or made available to all employees in the work unit. In no event will a Company representative offer or accept a gift where it is prohibited by law or is known by the individual to be contrary to law or the corporate business practices of the company employing the person offering or accepting the gift.

S85. When accepting or offering gifts or entertainment it is important that the action is free from even the perception that it may infer that favourable treatment was sought, received, or given in exchange for receipt of a business courtesy.

S86. The marketing and sale of Serco’s products and services must be free even from the perception that favourable treatment was sought, received, or given in exchange for the offering of business courtesies. No business courtesies will be offered that would constitute, or could reasonably be determined to constitute, unfair business inducements, that are otherwise prohibited by law, regulation, or the policies of our customers or business partners, or that could otherwise negatively affect the reputation of Serco.

S87. The following items will not be given or accepted under any circumstances, regardless of their value: cash, securities, personal cheques or payments to or for the benefit of individuals.

88. Special consideration must be given by Serco personnel who are involved in the acquisition or other purchase of goods or services for Serco to ensure uniform and fair treatment for all suppliers. This requires that such individuals objectively and impartially weigh appropriate facts and avoid the appearance of favouritism and ensure that proper procurement practices be followed. Therefore, any person involved in procurement or related actions, not just the Procurement Function, must not accept gifts from consultants, subcontractors, suppliers or other vendors, with the exception that they may accept advertising or promotional items of nominal value, such as pens, key chains, coffee mugs, or similar items displaying a company’s logo.'



‘Gifts and hospitality mean anything of value that you give or receive, either directly or in kind. They include: • goods or services • hospitality and entertainment, such as meals, travel or tickets to events • gratuities • discounts • personal favours • loans, or • anything else with a monetary value.

You must be careful when you give or accept business-related gifts or hospitality. You should know what is acceptable and consider the monetary value involved, as well as local customs and laws. If the gift or hospitality is of more than modest value, or you are unclear whether it is appropriate, ask your line manager.

Any gift or hospitality you accept must be of a type that you could also give as a proper business expense. Local rules may limit the value of gifts or hospitality you can accept. If you keep a gift, you should donate it to a nominated charity or make it available to everyone in your unit. If you return a gift, you should do so immediately, along with a written




explanation. You should take particular care if items of value are offered when we are negotiating or considering contracts and the recipient could influence the outcome, either directly or indirectly.’




A22:

Does the company’s anti-corruption policy include a statement on the giving and receipt of hospitality that ensures that such transactions are bona fide and not a subterfuge for bribery?

Score:

1

Comments:

Based on public information, there is evidence that the company has a policy on the giving and acceptance of hospitality that guards against corruption. However, information on upper limits or authorisation thresholds of the same is not clear. The company therefore scores 1.

References:

Public:

Code of Conduct, Gifts and Hospitality Factsheet (July 2014), p.2:


(p. 3): To gift or not to gift, that is the question.


Equally, what constitutes a non-trivial gift or hospitality? One way to determine what is legitimate is to assess whether such act would alter or influence a business relationship. If so, then a gift is not a gift, it becomes a form of bribery. To help employees manoeuvre this complicated terrain, some companies choose to place a monetary limit on the value of gifts that can be offered or accepted. At first this may seem to be the perfect solution to the problem, but it soon becomes obvious that what may seem to be a symbolic monetary value to a senior executive, could be worth significantly more to a junior employee.

In addition, senior managers may be required to attend or sponsor a VIP-type event where hospitality cost can easily surpass the established cap. Subsequently, it can get very complicated if different monetary values are designated according to different management levels. Especially, as the exact value of a high-profile event is hard to determine. In addition, multinational companies need to consider how monetary values are perceived in the different countries where they operate. For example, a £30 limit on gifts in the UK may be considered lavish to some employees in developing countries.’



‘2.10 Gifts, gratuities and entertainment

S38. Gifts, gratuities or entertainment of any kind will not be requested, given or accepted if this action could be reasonably regarded as unduly influencing the recipient or creating a business obligation on the part of the recipient. This applies to direct payments and payments in kind, including the provision of goods or services, personal favours, and entertainment (e.g. meals, travel, etc.)

S39. Accepting or offering gifts of nominal value or entertainment that is of a reasonable nature, infrequent in nature and in the course of a meeting or another occasion for the purpose of bona fide business discussions or to foster better business relations may be acceptable in situations where it is legal and in accordance with local business practice (i.e. where the exchange of gifts is customary and the gifts are appropriate for the occasion)

S40. Serco may be restricted in its ability to offer certain types of payments or other things of value to government employees or public officials by international anti-corruption and/or anti-bribery standards and various, related national laws. Company representatives will obtain guidance and approval before making such payments or offering items of value

S41. The monetary value of the gift, local customs and legal requirements will be considered when determining whether a gift should be retained by an employee, handed to the Company, or returned. Employees should consult Serco management for guidance

S42. If it is decided that a gift can be retained and is handed to the Company, the gift should be donated to a nominated charity or made available to all employees in the work unit

S43. In no event will an employee offer or accept a gift where it is prohibited by law or is known by the individual to be contrary to law or the corporate business practices of the company employing the person offering or accepting the gift

S44. When accepting or offering gifts or entertainment it is important that the action is free from even the perception that it may infer that favourable treatment was sought, received



or given in exchange for receipt of a business courtesy

S45. The marketing and sale of Serco’s products and services must be free from even the perception that favourable treatment was sought, received, or given in exchange for the offering of business courtesies.

No business courtesies will be offered that would constitute, or could reasonably be determined to constitute, unfair business inducements, that are otherwise prohibited by law, regulation, or the policies of customers or business partners, or that could otherwise negatively affect the reputation of Serco

S46. The following items will not be given or accepted under any circumstances, regardless of their value: cash, securities, personal cheques or payments to or for the benefit of individuals

S47. Special consideration must be given by Serco employees who are involved in the acquisition or other purchase of goods or services for Serco to ensure uniform and fair treatment for all suppliers. Therefore, any person involved in procurement or related actions, not just the Procurement Function, must not accept gifts from consultants, subcontractors, suppliers or other vendors, with the exception that they may accept advertising or promotional items of nominal value, such as pens, key chains, coffee mugs, or similar items displaying a company’s logo

S48. Gifts and hospitality over an agreed value(10) must be approved and registered(11)

10 All items valued at £250 or above although local procedures may set lower limits

11 Gifts and hospitality should be registered at https://gandh.serco.com



‘Gifts and hospitality mean anything of value that you give or receive, either directly or in kind. They include: • goods or services • hospitality and entertainment, such as meals, travel or tickets to events • gratuities • discounts • personal favours • loans, or • anything else with a monetary value.

You must be careful when you give or accept business-related gifts or hospitality. You should know what is acceptable and consider the monetary value involved, as well as local customs and laws. If the gift or hospitality is of more than modest value, or you are unclear whether it is appropriate, ask your line manager.

Any gift or hospitality you accept must be of a type that you could also give as a proper business expense. Local rules may limit the value of gifts or hospitality you can accept. If you keep a gift, you should donate it to a nominated charity or make it available to everyone in your unit. If you return a gift, you should do so immediately, along with a written explanation. You should take particular care if items of value are offered when we are negotiating or considering contracts and the recipient could influence the outcome, either directly or indirectly.’

http://www.serco.com/Images/Code_of_Conduct_UK_tcm3-36896.pdf





A23:

Does the company have a policy that explicitly prohibits facilitation payments?

Score:

2

Comments:

Based on public information, there is evidence that the company has a clear policy against facilitation payments across the geographies it operates.

References:

Public:


‘Bribery and Corruption

Even on the smallest scale, corruption is corrosive, and just the suspicion of it can severely

damage our reputation.

No matter what "local custom" may be, all forms of bribery and corruption, and even the

smallest facilitation payment, are forbidden. Corruption Corruption is any unlawful or improper behaviour that seeks to gain an advantage through illegitimate means. Bribery, abuse of power, extortion, fraud, deception, collusion, cartels, embezzlement and money laundering are all forms of corruption. Bribery Bribery means giving or receiving an unearned reward to influence someone's behaviour. One common form of bribery is a "kickback" - an unearned reward following favourable treatment. Both are corrupt. Facilitation Payments Facilitation Payments are sums of money paid to an official to speed up or "facilitate" their actions. That's why they are sometimes referred to as "grease" or "speed" payments. Whatever the local custom, Our Code forbids facilitation payments to be made anywhere in the world. We make no distinction between them and bribes, no matter how small the amount.’






Code of Conduct, p. 22:

We will never offer, accept, solicit or pay a bribe or facilitation payment.

‘Under no circumstances will Serco approve any irregular payment or payment in kind (such as gifts or favours) to win business, encourage others to act improperly or influence a decision in our favour. If you give or take bribes or engage in any other corruption, you will face disciplinary action and, if appropriate, criminal proceedings.

Paying a small sum of money to an official to speed up their actions is known as a facilitation payment. We make no distinction between facilitation payments and bribes, no matter how small the amount. Facilitation payments are illegal in most countries in which we operate and UK law forbids them anywhere in the world.

Our position is clear: we will not make facilitation payments and we do not allow others who work for or represent us to make them’



'S26. No Serco employee, its agents, representatives, joint venture partners or other third parties employed by Serco will: – make a ‘facilitation payment’. A facilitation payment refers to the practice of paying a small sum of money to (usually) an official as a way of ensuring they perform their duty. Current UK legislation forbids facilitation payments anywhere in the world.'






A24:

Does the company prohibit political contributions, or regulate such contributions in order to prevent undue influence or other corrupt intent? Does the company record and publicly disclose all political contributions?

Score:

2

Comments:

Based on public information, there is evidence that the company has a detailed policy in reference to political contributions. Whenever political contributions or appearances at political functions are required, the company provides guidance on the process and limits of the company policy for the concerned employee.

References:

Public:

Group Standard Code of Business Conduct and Ethics (July 2014), pp. 9-10:

‘2.14.1 Political activity

S79. Whilst remaining impartial in dealings with political parties, Serco may choose to contribute to the public debate of policy issues that directly affect the Company in the countries in which it operates. Such activity will only be done by employees specifically authorised by the country head, Divisional CEO or appropriate lead on Government Relations

S80. Employees who provide information to governments and regulatory bodies on behalf of Serco will ensure that all information is accurate and complete

S81. At times, attendance at events hosted by a political party may be required for briefing or other legitimate business purposes, but should not be attended if it might compromise Serco’s impartiality

S82. Employees who lobby on behalf of the Company or represent Serco in government and regulatory matters will comply with all applicable laws and regulations relating to corporate participation in public affairs

S83. Employees attending an event hosted by, or in aid of, a political party in their capacity as a Serco employee will declare this to the Divisional Government Relations lead

S84. Employees attending an event on their own account will do so out of office hours, in


their own time, or when on leave. Any opinions expressed will not represent Serco’s position, and will not be presented as doing so

S85. Employees will not be reimbursed by Serco for any personal contributions, expenditure or gifts associated with political activity

2.14.2 Political donations

S86. Serco maintains a position of impartiality with respect to party politics.

Accordingly, Serco will not contribute corporate funds, either direct or in-kind, or solicit funds for the contribution to any political party, politician or candidate for public office, save in the USA or other jurisdictions that permit political contributions under a voluntary Political Action Committee (PAC) or like scheme where employees may freely contribute donations. The PAC, whilst in the Company’s name, is run independently and the Company does not influence its management.

Where properly formed and governed, this Standard permits the Divisional CEO to authorise such a scheme and to permit appropriate political contributions strictly in accordance with applicable laws and regulations.

2.14.5 Current Political Activity

S92. Serco employees may engage in political activities, including standing for election to public office, provided that it is:

a. undertaken in their own personal capacity

b. carried out in their own time

c. a right conferred by law

d. not explicitly prohibited by contract

e. not in conflict with their obligations to Serco or applicable laws and other circumstances

S93. Employees engaging in political activities are asked to discuss, as appropriate, with their line management and/or the Divisional Government Relations Lead if these activities could lead to adverse public comment for Serco or our customers, and, in any event, to consider and raise to management how their individual political activities may create an actual or potential conflict with Serco’s business based upon their employment by Serco.’



‘2.1.3 Political donations

S17. Serco maintains a position of impartiality with respect to party politics. Accordingly, Serco will not contribute corporate funds, either direct or in-kind, or solicit funds for the contribution to any political party, politician or candidate for public office, save in the USA or other jurisdictions that permit political contributions under a voluntary Political Action Committee (PAC) or like scheme where employees may freely contribute donations. The PAC, whilst in the Company’s name, is run independently and the Company does not influence its management. Where properly formed and governed, this Standard permits the Regional CEO to authorise such a scheme and to permit appropriate political contributions




strictly in accordance with applicable laws and regulations.'

2.1.6 Current Political Activity

S23. Serco employees may engage in political activities, including standing for election to public office, provided that it is: – undertaken in their own personal capacity – carried out in their own time – a right conferred by law – not explicitly prohibited by contract – not in conflict with their obligations to Serco or applicable laws and other circumstances.

S24. Employees engaging in political activities are asked to discuss, as appropriate, with their line management and/or the Divisional Government Relations lead if these activities could lead to adverse public comment for Serco or our customers, and, in any event, to consider and raise to management how their individual political activities may create an actual or potential conflict with Serco’s business based upon their employment by Serco.'

'2.1.2 Political activity S10. Whilst remaining impartial in our dealings with political parties, we may choose to contribute to the public debate of policy issues that directly affect the Company in the countries in which we operate. Such activity will only be done by employees specifically authorised by the country head, Regional CEO or appropriate lead on Government Relations. S11. Employees who provide information to governments and regulatory bodies on behalf of Serco will ensure that all information is accurate and complete.

S12. At times, attendance at events hosted by a political party may be required for briefing or other legitimate business purposes but should not be attended if it might compromise Serco’s impartiality.

S13. Employees who lobby on behalf of the Company or represent Serco in government and regulatory matters will comply with all applicable laws and regulations relating to corporate participation in public affairs.

S14. Employees attending an event hosted by, or in aid of, a political party in their capacity as a Serco employee will declare this to the Divisional Government Relations lead.

S15. Employees attending an event on their own account will do so outside of office hours, on their own time, or when on leave. Any opinions expressed will not represent Serco’s position, and will not be presented as doing so. S16. Employees will not be reimbursed by Serco for any personal contributions, expenditure or gifts associated with political activity.’





A25:

Does the company have a clear policy on engagement in lobbying activities, in order to prevent undue influence or other corrupt intent, and discloses the issues on which the company lobbies?

Score:

2

Comments:

Based on public information, there is evidence that the company has a policy in place that regulates lobbying activity and also provides guidelines on its application.

References:

Public:


‘2.14.1 Political activity

S79. Whilst remaining impartial in dealings with political parties, Serco may choose to contribute to the public debate of policy issues that directly affect the Company in the countries in which it operates. Such activity will only be done by employees specifically authorised by the country head, Divisional CEO or appropriate lead on Government Relations

S80. Employees who provide information to governments and regulatory bodies on behalf of Serco will ensure that all information is accurate and complete

S81. At times, attendance at events hosted by a political party may be required for briefing or other legitimate business purposes, but should not be attended if it might compromise Serco’s impartiality

S82. Employees who lobby on behalf of the Company or represent Serco in government and regulatory matters will comply with all applicable laws and regulations relating to corporate participation in public affairs

S82. Employees who lobby on behalf of the Company or represent Serco in government and regulatory matters will comply with all applicable laws and regulations relating to corporate participation in public affairs’






‘2.1.1 Relationships with government

S8. We respect the authority of governments. Wherever we conduct business we will maintain appropriate relationships with these governments and their agencies, officials and personnel

S9. Serco employees planning to meet with an elected politician, their adviser, or another government official who is covered by local lobbying laws and who is not a direct customer will notify or otherwise co-ordinate with their Divisional lead on Government Relations. These meetings will be logged and minuted.

2.1.2 Political activity

S13. Employees who lobby on behalf of the Company or represent Serco in government and regulatory matters will comply with all applicable laws and regulations relating to corporate participation in public affairs individuals in political office will not be employed to act as consultants, advising Serco on how it may lobby or otherwise influence the work of the organisation or body to which that employee belongs. This includes seeking by means of their participation in that organisation’s proceedings to confer exclusive benefit upon Serco, making use of their position to arrange meetings with a view to lobbying members of that organisation, or connected to that organisation.

3.4 Divisional Government Relations Leads It is the responsibility of Divisional Government Relations leads to:

S129. Establish a Government Relations approach and co-ordinate contact with elected politicians, their advisers and government officials who are covered by local lobbying laws’





A25(a):

Does the company prohibit charitable contributions, or regulate such contributions in order to prevent undue influence or other corrupt intent?

Score:

2

Comments:

Based on public information, there is evidence of guidance to control and regulate charitable contributions. TI notes that the company declared charitable contributions made to the Serco foundation in 2013.

References:

Public: Company Website, Code of Conduct (updated 2014): ‘Charitable Activities, Donations and Sponsorship We actively encourage involvement and participation in charitable activities and causes. But we do need to make sure that the charity in question is legal and appropriate, its activities are proper, and it really is raising money for good causes. We should not end up supporting something we don't want to support, or cannot support for legal or ethical reasons (for example, donations to political causes).

We have a responsibility to support the communities we work among.

Stop and Think! As a private individual of course you can raise money, make donations or participate in charitable activities for any legitimate cause you believe in. However, if you're involved in activities or raising money for a charity on behalf of Serco, always make sure it is legitimate, and always get approval from your manager.’ Group Standard Operations (July 2014), p. 11: ‘2.11 Community engagement S98. The Serco Executive Committee will set annual corporate responsibility (including community engagement) objectives and targets for the Group and monitor performance against them S99. Divisions will consider community engagement, appropriate to business operations, within their strategic planning process and set objectives and targets for the Division based upon Group objectives and targets,local risks and community engagement opportunities S100. Based on Divisional objectives and targets Contracts will identify initiatives to engage


with the local community. These will: a. be monitored, recorded and reported on ASSURE b. demonstrate achievement of benefits to the community and to the business in line with financial commitments and the efforts of our employees c. enable activities to be reviewed to ensure continuous improvement’ http://www.serco.com/Images/SMS-GS-O1_Operations_Serco%20Public_tcm3-45742.pdf Code of Conduct, p. 26: ‘You are free to make personal investments and enjoy both social and normal business relations. We also encourage you to participate in community, charitable and professional organisations. However, you must avoid all business and personal relationships that may create an actual or potential conflict of interest.’ http://www.serco.com/Images/Code_of_Conduct_UK_tcm3-36896.pdf Annual Report (2013), p. 137: ‘To mark Serco’s 25th year as a publicly traded company dedicated to service excellence, we established the Serco Foundation as an independent charitable foundation. An exceptional payment of £5.0m was made in the prior year to establish the charitable foundation.’


http://www.serco.com/Images/SMS-GS-O1_Operations_Serco%20Public_tcm3-45742.pdf




A26:

Does the company provide written guidance to help Board members and

employees understand and implement the firm’s ethics and anti-corruption

agenda?

Score:

2

Comments:

Based on public information, there is evidence that the company provides written guidance to help employees and Board members understand and implement the company’s ethics and anti-corruption agenda. This includes access to an app designed to help employees implement the company’s ethics and anti-corruption agenda.

References:

Public:

Company Website, Code of Conduct:

Video and examples with navigation to the various sections


Factsheets on the various policies:

http://codeofconduct.serco.com/OurCode/Factsheets/index.aspx


‘S33. All new and existing employees will be informed about Serco’s position on bribery and corruption. Such information will include, amongst other things: – what to look out for to identify such activities – how to report suspicions of such activities either directly to a member of the management team or anonymously through the whistleblowing process – the consequences of failure to observe Serco’s standards on anti-bribery and corruption. Training and communication

S36. The needs of employees will be assessed and, where appropriate, training will be given to help them understand what constitutes a bribe and what to do if they are offered a bribe or if they believe co-workers are subject to bribes.

S37. New employees will be advised, and employees generally regularly reminded, of the




Company’s Policy, Standards and procedures or provided updates to those policies or changes in local requirements.’


The Say No Toolkit:

‘The Say No Toolkit was launched in Serco in August 2013 and the app is now available to over 100,000 Serco employees around the globe. Commenting on the Toolkit, Robert Smith, Director Business Compliance and Ethics at Serco says:

Difficult situations may arise when least expected and we want every employee to make the right decision. In looking at how we could strengthen our adequate procedures we wanted to take a step beyond the usual training and general guidance that was available. Working with the IBE we were able to shape a solution that is now available to all staff, providing them with easily accessible and practical advice through their smart phones, tablets and the internet.’

http://saynotoolkit.net/img/4012_IBE_SNT_A4_v11.pdf







A27:

Does the company have a training programme that explicitly covers anti-corruption?

Score:

2

Comments:

Based on public evidence, there is evidence available that the company has a training programme that covers anti-corruption as its component.

References:

Public:

Group Standard Code of Business Ethics and Conduct (July 2014), p.4:

‘2.5 Training awareness and competence

S17. The needs of employees will be assessed against identified ethical risks and, where appropriate, training will be given to help them understand and manage the ethical risks being faced

S18. New employees will be advised, and existing employees regularly reminded, of the Company’s policies, standards and procedures and will be provided with updates to those policies or changes in local requirements

S19. All suppliers, agents, third parties and business partners will be made aware of Serco’s Code of Conduct and the consequences of Serco severing business relationship for failure to meet the standards expected to be met

S20. As part of their ongoing training and awareness, employees and business partners will be advised of how they can alert the Company to potential areas of misconduct through the use of the Speak Up process that Serco has set up to provide a blame-free method of reporting genuine issues or concerns they may have’



'Training and communication

S36. The needs of employees will be assessed and, where appropriate, training will be given to help them understand what constitutes a bribe and what to do if they are offered a bribe




or if they believe co-workers are subject to bribes. S37. New employees will be advised, and employees generally regularly reminded, of the Company’s Policy, Standards and procedures or provided updates to those policies or changes in local requirements.'



‘As a Serco employee, you must:

participate in training, to learn about business ethics, compliance, laws and regulations’ http://codeofconduct.serco.com/welcome.aspx Annual Report (2013), p.3:‘During the fourth quarter of last year, we developed and set in train a comprehensive programme of corporate renewal. At its heart this programme aims – through leadership, training, guidance, and appropriate performance management – to change the balance of drivers within our business, such that the commitment to do what is right and to deal with our customers fairly and transparently always transcends that sustained drive to outperform’ (p.60): ‘Going forward, through leadership, training and guidance, and appropriate incentivisation, we will change the balance of drivers within our business such that the commitment to do what is right and to deal with our customers fairly and transparently always transcends that sustained drive to succeed.’ http://www.serco.com/Images/Serco_AR2013_tcm3-44453.pdf





A28:

Is anti-corruption training provided in all countries where the company operates or has company sites?

Score:

2

Comments:

Based on public information, there is evidence that anti-corruption training is provided in all countries where the company operates or has company sites, to both new and existing employees. The company therefore scores 2.

References:

Public:

Training video:



‘Serco Management System, Our Code of Conduct, The Code, along with our policies and standards, apply wherever Serco operates around the World. Each country has its own laws, regulations, customs and expectations. You must apply either the Code or your local requirements, whichever sets the higher standard.’

(p.6): ‘Serco will: • provide a working environment which reflects high ethical standards • ensure that all employees understand the Code and have appropriate training As a Serco employee, you must: • read, understand and regularly review this Code and our Governing Principles • participate in training, to learn about business ethics, compliance, laws and regulations’


Group Standard on Business Conduct and Ethics (May 2013), pp.5-6:

“S33. All new and existing employees will be informed about Serco’s position on bribery and corruption. Such information will include, amongst other things: – what to look out for to identify such activities – how to report suspicions of such activities either directly to a member of the management team or anonymously through the whistleblowing process –




the consequences of failure to observe Serco’s standards on anti-bribery and corruption.'














A29:

Does the company provide targeted anti-corruption training to members of the Board?

Score:

0

Comments:

Based on public information, there is some evidence of training being provided to members of the Board on matters of risk. However, it is not sufficiently clear that this training includes components on issues of bribery and anti-corruption.

References:

Public:

TI notes:


‘Induction, training and ongoing development

On joining the Board, each director receives a personalised induction programme including:

● An overview of the Group’s businesses, risks, governance arrangements and relations with investors…

All Board members are encouraged to attend relevant external training courses at the Company’s expense’




A30:

Does the company provide tailored ethics and anti-corruption training for employees in sensitive positions?

Score:

1

Comments:

Based on public information, there is limited evidence that the company provides specific and tailored training to employees in sensitive positions. The company therefore scores 1.

References:

Public:









‘Training and communication

S36. The needs of employees will be assessed and, where appropriate, training will be given to help them understand what constitutes a bribe and what to do if they are offered a bribe




or if they believe co-workers are subject to bribes.

S37. New employees will be advised, and employees generally regularly reminded, of the Company’s Policy, Standards and procedures or provided updates to those policies or changes in local requirements.’





A31:

Does the company have a clear and formal process by which employees declare conflicts of interest?

Score:

1

Comments:

Based on public information, there is evidence that the company has a clear and formal process by which employees declare conflicts of interest. However, it is not clear that the declaration should be made to an independent department. The company therefore scores 1.

References:

Public:

Group Standard Business Conduct and Ethics (July 2014), p.9:

‘S72. All actual and potential conflicts of interest will be identified, declared, recorded, monitored and managed

S73. Where employees, directors or officers have an actual, potential or suspected conflict of interest, or discover or suspect others of having an actual or potential conflict of interest, they will put the interests of Serco first and report it to their line manager and their next level manager

S74. Employees, directors and officers acting as members of a committee or board will raise actual or potential conflicts of interest at the earliest opportunity at a meeting of the committee or board and these will be noted in the minutes

S75. Depending on the situation, appropriate approval such as employee’s line manager, Contract Manager and or HR department will be gained before an employee starts any work with another company, whilst working for Serco

S76. Ownership by an employee, their partner, spouse or family member of a significant financial interest (greater than 5% of outstanding stock of a public company or any ownership interest in a company that is not publicly traded) in a competitor, or in a customer, consultant, subcontractor, supplier or other business partner must be declared to the employee’s line manager and their next level manager if they or one of their subordinates deals with such individuals or entity’






'A conflict of interest is a situation in which an employee has competing professional or personal interests. Such competing interests can make it difficult for individuals to fulfil their duties impartially. A conflict of interest may exist even if no unethical or improper act results from it.

S59. All actual and potential conflicts of interest will be identified, declared, recorded, monitored and managed

S60. Where employees, directors or officers have an actual, potential or suspected conflict of interest, or discover or suspect others of having an actual or potential conflict of interest, they will put the interests of the Company first and report it to their line manager and their next level manager.

S61. Employees, directors and officers acting as a member of a committee or board will raise the actual or potential conflict of interest at the earliest opportunity at a meeting of the committee or board and the item will be minuted.

S62. Approval from an employee’s line manager, their next level manager and HR department will be gained before an employee starts any work with another company, whilst working for Serco.

S63. Ownership by an employee, their partner, spouse or family member of a significant financial interest (5% of outstanding stock of a public company or any ownership interest in a company that is not publicly traded) in a competitor, or in a customer, consultant, subcontractor, supplier or other business partner must be declared to the employee’s line manager and their next level manager if they or one of their subordinates deals with such individuals or entity.'





A32:

Is the company explicit in its commitment to apply disciplinary procedures to employees, Directors and Board members found to have engaged in corrupt activities?

Score:

1

Comments:

Based on public information, there is evidence that the company commits to take disciplinary action against employees found to have engaged in corrupt activities. However, it is not clear that this also extends to Board members. The company therefore scores 1.

References:

Public:

Group Standards Consequences Management (July 2014), p.3:

‘S6. The provisions of the Code and the Policies apply to every employee without exception. If any employee violates the Code or the Company’s policies, or otherwise acts illegally, or in breach of any applicable law or regulations, the violation will be investigated and, where the investigation has confirmed a violation, the employee will be subject to disciplinary action

S7. The managers and supervisors of an employee who has violated these rules may also be disciplined if they have failed properly to supervise or oversee the employee’s conduct or have created a system of work which led to or encouraged the employee to breach his or her obligations. Enforcement action will be taken in every case of a proven violation, regardless of the employee’s position or seniority in the Company

S8. In determining the appropriate disciplinary action to take, the Company will have regard to the employee’s contract of employment and will follow the Human Resources Disciplinary Procedures to ensure a proportionate, clear and consistent approach is taken to all violations

S9. The nature of the disciplinary action will depend upon the facts of the individual case and the Company will consider all relevant factors, including the following:

a. the employee’s intentions when committing the violation

b. whether the employee knew that he or she was acting in violation

c. whether the employee has been disciplined previously for other violations


d. if the employee acted dishonestly or with bad intent or was open and transparent in his or her actions

e. whether the employee’s conduct was criminal

f. the employee’s response to the violation including whether the employee self-reported the violation and sought guidance on what steps to take to remedy the position or whether the employee took steps to conceal or cover up his or her actions or those of someone else

g. the employee’s willingness to assist in managing the consequences of the breach, including cooperating fully and frankly with any subsequent investigation

h. the severity of the violation

S10. Employees who are responsible for taking enforcement action in respect of breaches will themselves be in breach of the Policies if they fail to enforce these procedures rigorously and appropriately in every case and without exception. The enforcement process will be subject to regular assurance review and audit and remedial action will be taken promptly in response to any concerns raised’

http://www.serco.com/Images/SMS-GS-G1_Consequence%20Management_Serco%20Public_tcm3-45735.pdf

Code of conduct, p.22:

‘If you give or take bribes or engage in any other corruption, you will face disciplinary action and, if appropriate, criminal proceedings.’



'S35. Serco’s terms and conditions of employment will clearly state that the giving or acceptance of bribes to any third party in exchange for a business courtesy are unacceptable. Any employee found to have engaged in such conduct will be subject to disciplinary action.'







A33:

Does the company have multiple, well-publicised channels that are easily accessible and secure, to guarantee confidentiality or anonymity where requested by the employee (e.g. web, phone, in person), to report concerns or instances of suspected corrupt activity?

Score:

2

Comments:

Based on public information, there is evidence that the company has several confidential and anonymous channels which are also well publicised through which an employee can report suspected instances of corruption.

References:

Public:

Company Website, Code of Conduct, Speak Up (updated 2014):

‘If you think you should report something...

No matter where you work in Serco, if you believe Our Code is being broken, then you

should report it.

We absolutely prohibit retaliation towards anyone who reports a violation or helps an

investigation, and we will protect you and respect you for having the courage to live Our

Code.

...here's how to Speak Up. First speak to local management (your supervisor, manager, HR or Ethics Lead). If you're not comfortable doing that, then you can contact the company in confidence through the Serco Ethics Hotline. To call toll free use the numbers provided below. Or you can report online by going to: www.tnwinc.com/serco (for Serco Americas usewww.reportlineweb.com/serco) You can also email a report, or problems with the hotline numbers, to [email protected] (for Serco Americas use [email protected]) Or you can write to: Company Secretary, Serco Group plc, Serco House 16 Bartley Wood Business Park, Bartley Way, Hook, RG27 9UY, UK General Notes:

http://www.tnwinc.com/serco

http://www.reportlineweb.com/serco

mailto:[email protected]



Callers to the hotline numbers should ensure first that their landline or mobile phone is enabled for international dialling.

When dialling from an office phone, the caller should dial a zero or a nine or whatever is required locally, to get an outside line.

Note the specific restrictions that apply to your listed country hotline. Airtime charges may apply to mobile phone calls. If local IT restrictions prevent access to online contact it is permissible to use an

alternative, 'non-work' machine.’

http://codeofconduct.serco.com/OurCode/SpeakUp/index.aspx

Group Standard Speaking Up (July 2014):

Group Standard:

‘Whistleblowing (SMS GS-G4).

2.1 Contacting the Company

As a first step employees are encouraged to talk to their line manager. If this is uncomfortable, impractical or employees otherwise believe matters should be reported outside of their line management, they are reminded that numerous avenues for communication of concerns exist, including reporting to a member of the Human Resources department, an Ethics/Compliance representative, a Serco legal representative or to the Company Secretary. Some divisions may provide country specific ethics hotlines to meet local requirements, or other reporting mechanisms which employees are encouraged to use.

Employees may also report concerns:

– by calling the Serco Ethics Hotline within their region;

– using a secure web-based self-reporting system at www.tnwinc.com/serco; – emailing: [email protected]

– or writing to: Company Secretary, Serco Group plc, Serco House, 16 Bartley Wood Business Park, Bartley Way, Hook, Hampshire, RG27 9UY’







A33(a):

Are the whistleblowing channels available to all employees in all geographies?

Score:

2

Comments:

Based on public information, there is evidence that the company whistleblowing channels are available to all employees and are also freely accessible on the internet.

References:

Public:

Company Website, Code of Conduct, Speak Up (updated 2014):

‘If you think you should report something...

No matter where you work in Serco, if you believe Our Code is being broken, then you

should report it.

We absolutely prohibit retaliation towards anyone who reports a violation or helps an

investigation, and we will protect you and respect you for having the courage to live Our

Code.

...here's how to Speak Up. First speak to local management (your supervisor, manager, HR or Ethics Lead). If you're not comfortable doing that, then you can contact the company in confidence through the Serco Ethics Hotline. To call toll free use the numbers provided below. Or you can report online by going to: www.tnwinc.com/serco (for Serco Americas usewww.reportlineweb.com/serco) You can also email a report, or problems with the hotline numbers, to [email protected] (for Serco Americas use [email protected]) Or you can write to: Company Secretary, Serco Group plc, Serco House 16 Bartley Wood Business Park, Bartley Way, Hook, RG27 9UY, UK General Notes:

Callers to the hotline numbers should ensure first that their landline or mobile phone is enabled for international dialling.

When dialling from an office phone, the caller should dial a zero or a nine or

http://www.tnwinc.com/serco

http://www.reportlineweb.com/serco




whatever is required locally, to get an outside line. Note the specific restrictions that apply to your listed country hotline. Airtime charges may apply to mobile phone calls. If local IT restrictions prevent access to online contact it is permissible to use an

alternative, 'non-work' machine.’


Group Standard


2.1 Contacting the Company

As a first step employees are encouraged to talk to their line manager. If this is uncomfortable, impractical or employees otherwise believe matters should be reported outside of their line management, they are reminded that numerous avenues for communication of concerns exist, including reporting to a member of the Human Resources department, an Ethics/Compliance representative, a Serco legal representative or to the Company Secretary. Some divisions may provide country specific ethics hotlines to meet local requirements, or other reporting mechanisms which employees are encouraged to use.

Employees may also report concerns:

– by calling the Serco Ethics Hotline within their region;

– using a secure web-based self-reporting system at www.tnwinc.com/serco; – emailing: [email protected]

– or writing to: Company Secretary, Serco Group plc, Serco House, 16 Bartley Wood Business Park, Bartley Way, Hook, Hampshire, RG27 9UY’







A33(b):

Does the company have formal and comprehensive mechanisms to assure itself that whistleblowing by employees is not deterred, and that whistleblowers are treated supportively?

Score:

1

Comments:

Based on public information, there is some evidence from the company of putting in place an international standard whistleblowing process and practise. TI notes particularly that the company runs a periodic review of cases to monitor the impact on whistleblowers. However, to what extent employees are encouraged or treated in a supportive manner cannot be fully ascertained. The company therefore scores 1.

References:

Public:

Group Standard:


2.3 Safeguards S4. Serco will protect any employee who discloses concerns provided from adverse employment action unless it is proved they have been made in bad faith S5. Direct or indirect victimisation of any person using this Standard will be regarded as a serious disciplinary offence S6. The identity of the individual making the allegation may be kept confidential so long as it does not compromise, hinder or otherwise frustrate any investigation S7. Anonymous allegations will be appropriately reviewed based upon the information reported; however Serco encourages individuals to report their concerns directly since it believes that the ability to follow up with the reporting individual can aid in ensuring an appropriate review of allegations made’

Group Standard: Speaking Up (July 2014), pp. 4-5:

‘2.3 Safeguards

S16. Serco will protect any employee who discloses issues provided from adverse employment action unless it is proved they have been made in bad faith

S17. Direct or indirect victimisation of any person using this Standard will be regarded as a serious disciplinary offence


S18. The identity of the individual raising the issue may be kept confidential so long as it does not compromise, hinder or otherwise frustrate any investigation

S19. Anonymous reports will be appropriately reviewed based upon the information reported; however Serco encourages individuals to report their issues directly since it believes that the ability to follow up with the reporting individual can aid in ensuring an appropriate review of issues raised

S20. Serco will conduct an initial review in order to determine whether appropriate and adequate information exists upon which to conduct an investigation.

2.4 Non-retaliation

S24. Periodic assessment of cases will be undertaken to ensure that reporters of issues have not been retaliated against

S25. Where retaliation has been alleged it will be investigated and if found to be valid, appropriate disciplinary action will be taken against those involved.’


Annual Report (2013), p. 61:

‘Board focus

Establishing formal Ethics Committees and Ethics Officers in each division, accompanied by the redesign of our whistle-blowing process to the highest international standards,’

(p.73): ‘Under the Corporate Renewal Programme, we have established the Corporate Responsibility Committee of the Board to take the lead in determining the Group’s ethical compass, supported by the creation of formal Ethics Committees and the appointment of Ethics Officers in each division. We have also redesigned our whistle-blowing process, with input from the Institute of Business Ethics, to benchmark against the highest international standards’




A34:

Does the company have well-publicised resources available to all employees where help and advice can be sought on corruption-related issues?

Score:

2

Comments:

Based on public information, there is evidence that the company has well-publicised resources where advice can be sought on corruption-related issues.

References:

Public:

Group Standard Speaking Up (July 2014), p.3:

‘Speaking up (or whistleblowing) is the responsibility of every employee. This Standard covers those concerns that:

including failure to comply with a legal obligation or statutes or criminal activity

-compliance with company policies; or are violations of our Code of Conduct Reports submitted to Serco that allege malpractice or impropriety will be investigated and depending on the results of such investigations may lead to other actions by the Company. Circumstance, in relation to the business of Serco, which should be reported include:

unethical behaviour

-trust violations to health and safety or the environment


reputation

Reports submitted to Serco that allege malpractice or impropriety will be investigated and depending on the results of such investigations may lead to other actions by the Company. The tools Serco has provided to allow employees to report misdeeds or improper behaviour are not designed to question financial or business decisions when properly taken by the Company nor should it be used to reconsider any matters which have already been addressed under grievance, disciplinary or any other Company procedures.’ (pp. 4-5): 2 Policy Standards 2.1 Contacting the Company S1. In the first instance employees are encouraged to talk to their line manager if they have information which demonstrates malpractice, wrongdoing or violations of our Code of Conduct or Governing Principles S2. If this is uncomfortable for the employee, impractical or if the employee believes matters should be reported outside of their line management, a variety of options to communicate concerns exist, including reporting to: a. a member of the Human Resources department b. an Ethics/Compliance representative c. a Serco legal representative or d. the Company Secretary S3. Some divisions may provide country specific ethics hotlines to meet local requirements, or other reporting mechanisms which employees are encouraged to use S4. In addition to those mechanisms for reporting concerns above, employees or external third parties may also use the following: a. calling the appropriate confidential Speak Up Hotline (provided by an independent third party offering free phone numbers on countries where we operate and language translation as appropriate) b. using a secure web-based self-reporting system c. emailing; or d. writing S5. It is a fundamental requirement of an employee’s obligations that they professionally carry out their duties and not disclose confidential information about the employer’s affairs. Nevertheless, where an individual discovers information that they believe demonstrates malpractice or wrongdoing anywhere within the Company, then this information must be disclosed without fear of reprisal and, where appropriate, independently of line


management 2.2 Complaint handling and investigation S6. A procedure will be implemented for the handling and reporting of malpractice or impropriety S7. Any manager notified of an issue will: a. ensure issues raised are taken seriously, properly reviewed with an objective assessment made or, where an independent investigation is conducted, ensure full provision of accurate and complete information and appropriate and timely participation of themselves and their employees (Footnote: Details of free phone numbers are detailed in Serco’s Code of Conduct and www.serco.com/codeofconduct 2 www.tnwinc.com/serco 3 [email protected] or [email protected] for Serco Americas 4 Company Secretary, Serco Group plc, Serco House, 16 Bartley Wood Business Park, Bartley Way, Hook, Hampshire RG27 9UY or 1818 Library Street, Suite 1000, Reston, VA 20190 United States for Serco Americas) b. inform the reporter whether an investigation will be conducted and timescales c. ensure that all necessary and appropriate actions to resolve valid issues are taken d. where appropriate, provide feedback to the reporter on the outcome and any action taken e. ensure there is no retaliation against any employee for raising an issue S8. All issues relating to the activities of the Company or individuals will be handled in accordance with Serco’s Speak Up issues handling procedures S9. All issues will be reviewed and/or investigated by appropriate representative(s) of Serco S10. The purpose of any investigation will be to gather and establish the facts relating to specific incidents, events, claims or allegations S11. Investigations will be thorough, fair, balanced, transparent and, where appropriate, conducted under legal privilege


S12. There should be no unreasonable delay in conducting and concluding any investigation S13. The investigator’s role will be to provide facts to enable informed decision making S14. Upon completion of an investigation, feedback will be provided to the original reporter of the issue S15. If the reporter is not satisfied with the outcome of the investigation and has appropriate grounds for appeal, this appeal will be submitted in writing, and will be reviewed by the Divisional CEO’

Code of conduct, p.58:

‘Our speak up process includes;

- speak to your manager

- email a specific email

- register your issue on line at a web address

- write to the Company Secretary

- call an in country toll free number

If a business opportunity raises any of the issues above, you must refer it to your line manager. If the issue is significant, your divisional executive management will review it, and may refer it to the Ethics Committee for a final decision.’


Group Standard on Business Conduct and Ethics (May 2013), p.6: ,

‘S105. Seek guidance from line management and legal advisers if there are any doubts or clarifications appropriate to determine what is required to comply with the laws’





A35:

Is there a commitment to non-retaliation for bona fide reporting of corruption?

Score:

2

Comments:

Based on public information, there is evidence that the company has safeguards in place to protect whistleblowers with disciplinary measures in place for cases of retaliation.

References:

Public:

Group Standard: Speaking Up (July 2014), pp. 4-5:

‘2.3 Safeguards

S16. Serco will protect any employee who discloses issues provided from adverse employment action unless it is proved they have been made in bad faith


S18. The identity of the individual raising the issue may be kept confidential so long as it does not compromise, hinder or otherwise frustrate any investigation

S19. Anonymous reports will be appropriately reviewed based upon the information reported; however Serco encourages individuals to report their issues directly since it believes that the ability to follow up with the reporting individual can aid in ensuring an appropriate review of issues raised

S20. Serco will conduct an initial review in order to determine whether appropriate and adequate information exists upon which to conduct an investigation.

2.4 Non-retaliation

S24. Periodic assessment of cases will be undertaken to ensure that reporters of issues have not been retaliated against

S25. Where retaliation has been alleged it will be investigated and if found to be valid, appropriate disciplinary action will be taken against those involved

2.5 Reporting and oversight

S26. The Corporate Responsibility and Risk Committee, Executive Committee and Divisional


Executive Management Team will receive reports on issues raised, ensure agreed actions have been taken and monitor trends that may require management action

S27. Serco will include within its Corporate Responsibility Report an overview of issues raised and their status

S28. On a periodic basis completed issues will be used as anonymous case examples to raise awareness of the system and its effective management’




2.3 Safeguards

S4. Serco will protect any employee who discloses concerns provided from adverse employment action unless it is proved they have been made in bad faith


S6. The identity of the individual making the allegation may be kept confidential so long as it does not compromise, hinder or otherwise frustrate any investigation

S7. Anonymous allegations will be appropriately reviewed based upon the information reported; however Serco encourages individuals to report their concerns directly since it believes that the ability to follow up with the reporting individual can aid in ensuring an appropriate review of allegations made’

http://www.serco.com/Images/SMS_GS_G4-Whistleblowing_Serco%20Public_tcm3-36704.pdf






Information Sources:

Company website:

www.serco.com



Annual Report (2013):


Our Code (July 2014):


Factsheets on the various policies:


Group Standard on Business Conduct and Ethics (2013):


Governing Principles:


Serco CR Framework:


Corporate Social Responsibility Report (2012):


The Say No Toolkit:


http://www.serco.com/











FINAL ASSESSMENT SERCO GROUP PLC

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