Serco has announced the resignation of its group chief executive Christopher Hyman, the same day that rival G4S confirmed the departure of its CEO Richard Morris.
Both companies have been embroiled in controversy surrounding the government’s electronic contract for criminals in England and Wales, where they have been accused of overcharging the government for years. Serco also faces possible exclusion from all current and future government contracts after it emerged that the Ministry of Justice (MoJ) asked the police to investigate alleged fraudulent activity by Serco staff.
In a statement, Hyman, who leaves after 19 years at Serco, said: “I have always put the interests of Serco first. At this time, nothing is more important to me than rebuilding the relationship with our UK government customer.
“In recent weeks it has become clear to me that the best way for the company to move forward is for me to step back.”
Hyman will be replaced by Ed Casey, who has led Serco’s Americas division since 2005. Casey will be acting group CEO and appointed to the board with immediate effect.
Serco said that Hyman is stepping down to give the company the best chance to carry out the corporate renewal programme it announced today, which aims to improve transparency in its dealings with the UK government.
As part of its renewal programme, Serco is separating the UK and Europe division into two, with one focused on its UK central government customer and the other on other public sector customers.
It has also pledged to strengthen contract-level governance and transparency, and to establish a board committee for corporate responsibility and appoint full-time ethics officers.
Furthermore, it is updating Serco’s code of conduct, values statement and governing principles, and providing training and performance management to help uphold these.
The company said that it has been cooperating fully with the Ministry of Justice and Cabinet Office on reviews and audits across a number of its central government contracts. It said the reviews are ongoing, progressing “satisfactorily” and expected to finish in the autumn.
Alastair Lyons, non-executive chairman at Serco, said: "The decisive and comprehensive actions we have set out today, alongside the programme already underway, should leave no-one in any doubt about how seriously Serco takes these issues and our commitment to rebuild the confidence of our UK Government customer.
“Our focus now is on implementing these important changes that redefine the way in which we engage. We see an opportunity to take a substantial step forward in public sector outsourcing through an open, transparent approach to business with our customers based upon mutual confidence."
Meanwhile, Serco said that it has started to look for a new group CEO “outside of the business”.
Serco recently dropped out of the FTSE 100 after its share price slumped following the fraud allegations.
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