The Board of G4S announces the principal findings of its review of the London Olympic and Paralympic Games Security Contract (the ‘Olympic contract’) together with its overall conclusions and a number of key actions arising out of that review (the ‘Review’)
The key points can be summarised as follows:
* The Olympic contract was unique in terms of scale and complexity, but notwithstanding this, the Company was capable of fulfilling the contract; the issue was in its delivery.
* Although the Company recognised the unique and complex nature of the Olympic contract from an early stage, this was not properly reflected in its handling of the contract. The Company has management and other structures and processes that have proved highly effective in delivering the Company’s regular business over many years but it did not recognise these structures and processes needed augmenting for the Olympic contract.
* The monitoring and tracking of the security workforce, management information and the project management framework and practices were ineffective to address the scale, complexities and dependencies of the Olympic contract. Together this caused the failure of the Company to deliver the contract requirements in full and resulted in the identification of the key problems at a very late stage.
* The successful execution of the Home Office/LOCOG contingency plan including deployment of additional military and police together with a substantial contribution from the thousands of G4S employees who worked alongside them, led to a safe and secure games with continuously positive ratings on venue security from games visitors.
* The Board confirms that it is in the best interests of the Company and of all its stakeholders that Nick Buckles should remain Group CEO. Whilst the CEO has ultimate responsibility for the Company’s performance, the Review did not identify significant shortcomings in his performance or serious failings attributable to him in connection with the Olympic contract.
* The Board has accepted the resignations of David Taylor-Smith, Chief Operating Officer and Regional CEO – UK and Africa and of Ian Horseman Sewell, Managing Director, G4S Global Events.
* Richard Morris, currently the Group Managing Director of G4S Care & Justice Services in the UK, has been appointed as the CEO, UK Region. Kim Challis, who currently runs a portfolio of UK commercial and Government businesses, will take on direct line management responsibility for all Government businesses in the UK as CEO, G4S Government and Outsourcing Solutions – a new role created to enhance our focus on this critically important area of our business.
* The Group Executive will also be strengthened with the appointment of a Group Chief Operating Officer, who will work closely with the CEO, with responsibilities to include a specific focus on operational procedures, risk management and quality customer service and delivery. The Group COO role will be an external appointment.
* The contract failings are largely specific to the Olympic contract. However, G4S will take a number of further actions, learning lessons from this contract, to ensure that best practices are applied across the entire business. Actions will include: more rigorous risk assessment for new contracts and improved contract take-on processes and project management. Board oversight will be enhanced including review and approval of contracts where annual revenues exceed £50m.
* The Board will be strengthened by the addition of at least two new non-executive directors. The recruitment process is underway.
John Connolly, who joined G4S as Chairman on June 8, said:
“G4S has accepted responsibility for its failure to deliver fully on the Olympic contract. We apologise for this and we thank the military and the police for the vital roles they played in ensuring the delivery of a safe and secure Games.
Our Review of the company’s performance on this contract has been extremely thorough and, whilst the failures are largely specific to the very special nature of this contract, we will learn from mistakes made. We are taking actions in relation to both the management and governance of G4S to ensure we continue to deliver the highest standards of customer service and contract delivery across the Group.”