Security firm G4S have stood by its chief executive Nick Buckles but have confirmed two other senior executives would leave following its investigation into the Olympic contract blunder.
The whole blunder emerged just two weeks before the Olympic opening ceremony when G4S admitted that it would not be able to fulfil it’s contractual obligation in providing 10,400 security operatives forcing soldiers to fill the gap.
The review which, can be viewed here, stated that: “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 two other senior executives that are to go are David Taylor-Smith, chief operating officer, and Ian Horseman Sewell, a managing director.
MPs on the Home Affairs Select Committee last week called for the company to hand back the £57m management fee the company was paid to supply Olympics security staff, but G4S has said it lost £50m on the £235m contract to supply security staff, almost half of whom were not able to take up their posts.
The key points of the review 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 under way.
The report found G4S did not track its workforce effectively and failed to realise the problem until too late.
“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,” said Chairman John Connolly.
G4S said it would carry out more vigorous risk assessment in future, with greater board oversight of large contracts.
It also tasked Kim Challis with repairing relations with the government, creating a new role of CEO for UK government opportunities and outsourcing.
The full report is available here.