Consequence Management

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Group Standard

Consequence

Management

Serco is committed to creating an open and transparent environment,

where good behaviour is rewarded and where employees feel safe in the

knowledge that poor behaviour can be reported without fear, and that all

instances of such behaviour will be dealt with effectively

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Document Details

Document Details Serco Public

Reference

SMS GS-G1: Consequence Management Version 1

Approval Date

July 2014 Date for next review July 2016

Applicability

Serco Group covering all business regions, operating companies and business units throughout the world1

Authority

Chief Executive, Serco Group plc

Accountable Policy Owner (Group)

HR Director, Serco Group plc

Additional Information

Supporting standards, standard operating procedures and guidance relating to this Group Standard are available on ‘Our World’ under Serco Management System

Governance

Our policies and standards, together with any regional or market requirements and enhancements to them, are authorised through a robust governance process. The SMS Quality Manual describes this process and is available on Our World under Serco Management System

1_{As used herein, Serco Group and its affiliates, subsidiaries and operating companies are referred}

to as ‘Serco’, the ‘Company’ or ‘company’, or ‘we’, ‘us’ or ‘our’.

1 Objectives

Serco is committed to creating an open and transparent environment where good behaviour is rewarded and where employees feel safe in the knowledge that poor behaviour can be reported without fear, and that all instances of such behaviour will be dealt with effectively, consistently and appropriately, without exception.

This Standard covers how instances of non-compliance with legislation and regulations, Serco’s Code of Conduct (the ‘Code’) or the Serco Management System will be dealt with.

This Standard should be read in conjunction with:  Serco Group Policy Statements

 The Serco Code of Conduct  The Speaking Up Group Standard1

 The Speaking Up-Issues Handling Group Standard Operating Procedure2

1_{See Speaking Up Group Standard Ref: SMS-GS-BC3} 2_{See Speak Up Issues Handling GSOP Ref: SMS GSOP BC3-1}

2 Policy Standards

2.1 Compliance

S1. Non-compliance with this Group standard carries risk to the business and the individual(s) concerned. Employees have a number of specific duties to minimise this risk, including the requirement to:

a. comply with all applicable laws and regulations b. adhere strictly to all Policies and the SMS c. adhere strictly to the Code

d. behave in a manner that is consistent with Serco’s values and ethical standards

e. report promptly any breaches that relate to any of the above f. enforce remedial action where a violation has taken place

S2. It is an employee’s duty to understand his or her obligations arising as a result and to act at all times in an open and transparent manner, in accordance with the Governing Principles (which are set out in the Code3_{), and to exercise good judgement}

S3. The managers and supervisors of an employee must properly supervise or oversee their conduct and ensure systems of work enable employees to meet their obligations

2.2 Addressing potential consequences

S4. Questions regarding the laws, regulations, the Code and Policies applicable should be raised in the first instance with an employee’s line manager and, if necessary, with the relevant head (on matters

concerning the Code and Policies) or with the Company’s legal

department (regarding law and regulations). It is an employee’s duty to exercise good judgement when deciding whether to seek guidance or support on such matters, and to take the appropriate action to ensure compliance

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S5. Reporting of concerns regarding breaches of laws, regulations, the Code and Policies should be raised in accordance with Serco’s Speaking-Up Standard4 _{and Procedure}5

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

4_{See Speaking Up Group Standard Ref: SMS-GS-BC3} 5_{See Speak Up Issues Handling GSOP Ref: SMS GSOP-BC3-1}

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

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3 Responsibilities & Accountabilities

S11. The following responsibilities will apply to the delivery of the defined

standards. If these are not completed effectively, the person responsible will be accountable for any consequences.

Group

S12. The Group CEO will appoint a Group Consequence Management Lead responsible for:

a. developing and maintaining Group Consequence Management policy b. ensuring the Consequence Management standard and associated

procedures and key controls remain fit for purpose, reflect legislative and regulatory requirements and effectively manage business risks

c. providing oversight and reporting consequence management performance

All managers and supervisors

S13. All managers and supervisors of an employee must properly supervise or oversee their conduct and ensure systems of work enable employees to meet their obligations

S14. All managers are responsible for:

a. investigating all reported violations and, where proven, invoking the disciplinary procedure

b. considering all relevant factors during an investigation when determining future action

c. implementing remedial action and local controls where a violation has taken place to reduce the risk of violations occurring in the future

All employees

S15. All employees are responsible for:

a. complying with all applicable laws and regulations

b. strictly adhering to all Policies, including all systems and controls governing the business, such as accounting, billing and performance standards, procedures and work instructions

c. strictly adhering to the Code of Conduct

d. behaving in a manner that is consistent with Serco’s values and ethical standards

e. promptly reporting any breaches that relate to any of the above f. implementing remedial action where a violation has taken place

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4 Processes and Controls

4.1 Governance processes and controls

Process

A set of related activities that must be carried out to achieve policy outcomes

Ref Description

Controls

The action we put in place to mitigate a risk(s) within a key process and/or the delivery of policy outcomes. These are mandated and are the minimum that should be implemented regardless of any local difference

Ref Description

Responsibility for ensuring controls are in place and

operating effectively G ro u p (S 1 2 S 14 ) Di vi si o n (S 1 3 & S 1 4 ) Bu si n es s U n it (S 1 3 & S 1 4 ) Co n tr ac t (S 1 3 & S 14) A ll E mp lo ye es (S 1 5 )

P1 Responsibilities are defined and understood  C1 The Group Consequence Management Lead is responsible for:

 Developing and maintaining Group Consequence Management policy  Ensuring the Consequence Management

standard and associated procedures and key controls remain fit for purpose, reflect legislative and regulatory requirements and effectively manage business risks

 Providing oversight and reporting consequence management performance

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Process

Ref Description

Controls

Ref Description

 C2 All managers and supervisors are responsible for:

 Investigating all reported violations and, where proven, invoking the disciplinary procedure

 Considering all relevant factors during an investigation when determining future action

 Investigating all reported violations and, where proven, invoking the disciplinary procedure

 Implementing remedial action and local controls where a violation has taken place to reduce the risk of violations occurring in the future

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Process

Ref Description

Controls

Ref Description

 C3 All employees are responsible for:

 Complying with all applicable laws and regulations

 Strictly adhering to all policies, including all systems and controls governing the business, such as accounting, billing and performance standards, procedures and work instructions

 Strictly adhering to the Code of Conduct  Behaving in a manner that is consistent

with Serco’s values and ethical standards  Promptly reporting any breaches that

relate to any of the above

 Implementing remedial action where a violation has taken place

    

P2 Establish policy  C4 Policy, standards and group procedures are

defined and published

    

 C5 Policy, standards and group procedures, defined in the Serco Management System and Serco’s Code of Conduct, are

communicated and implemented

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Process

Ref Description

Controls

Ref Description

P3 Establish systems and process  C6 Appropriate systems and procedures are in place to enable breaches to be reported, investigated and disciplinary action taken

    

 C7 Systems and procedures are periodically reviewed and updated

    

P4 Compliance assessment and audit  C8 A compliance plan is in place which includes assessment of systems and procedures to enable violations to be reported, investigated and disciplinary action taken

    

 C9 Compliance and audit reports have action plans to address non-conformities

    

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5 Supporting documentation and

guidance

The following should be read in conjunction with this standard:

Ref Document

Serco Group Policy Statements Serco Code of Conduct

SMS-GS-BC3 Speaking Up Group Standard SMS GSOP- BC3-1 Speaking Up Issues Handling

6 Definitions

Term Definition

Accountability Being accountable means being not only

responsible for something but also answerable for your actions.

Responsibility A responsible person is the individual who

completes the task required. Responsibility can be shared and delegated.

All responsible persons will also be accountable for completing tasks effectively. Non-compliance will have consequences which may include disciplinary action as defined within the Consequence

Management Group Standard.

Group Serco Group plc is the administrative centre of the organisation, responsible for setting corporate strategy, defining governance requirements and supporting the business in its day to day operations

Division The Group will define a set of business divisions which will be responsible for business delivery within a defined set of markets or geographies.

Business Unit A Business Unit is a cluster of Contracts which provide a similar service e.g. Health, Defence, Transport etc.

Where appropriate, a separate legal entity wholly owned or where Serco has a controlling share may also be referred to as a Business Unit, where appropriate.

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Term Definition

Contract A Contract provides specified requirements to a customer (either directly with Serco or to a

consortium/Joint Venture in which Serco is a party) A Contract will also refer to a corporate/functional area.

Corporate/functional areas are functions which support the business and they include finance, HR, procurement etc.

Contract Manager This refers to a manager with responsibility for managing the performance of a contract and can include a Contract Manager on a day-to-day basis (or Operational Manager with devolved

responsibility), a Contract Director, Partnership Director and/or a Business Unit Managing Director

7 Further information and support

If you require any further information or support regarding this Group

Standard, or if you have any suggestions for improvement, please contact the Accountable Policy Owner (Group) or email [email protected]

Consequence Management

Group Standard

Consequence

Management

Document Details

Contents

1

Objectives

2

Policy Standards

2.1

Compliance

2.2

Addressing potential consequences

3

Responsibilities & Accountabilities

4

Processes and Controls

4.1

Governance processes and controls

Process

Ref Description

Controls

Ref Description

Process

Ref Description

Controls

Ref Description

Process

Ref Description

Controls

Ref Description

Process

Ref Description

Controls

Ref Description

5

Supporting documentation and

guidance

6

Definitions

7

Further information and support