Lyons quits over Serco ‘mis-steps’

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Published: Monday 17th November 2014 by The News Editor

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The chairman of scandal-hit outsourcing firm Serco is to step down, saying he takes ultimate responsibility for the group’s “strategic and operational mis-steps”.

Alastair Lyons made the announcement a week after the firm slashed profits guidance and wrote down its value by £1.5 billion, sending shares plunging by a third.

Mr Lyons has chaired the group for more than four years, including a scandal-hit 2013 when it had to repay the Government £68.5 million for overcharging on criminal tagging contracts as well as £2 million from past profits for a prisoner-escort deal.

Serco announced that he would step down once a new chairman had been appointed.

New chief executive Rupert Soames, who took over in May, warned last week that Serco faced two more difficult years as it battles to rectify the mistakes of the past

He is now seeking to make the business “smaller and more focused” and said it had been concentrating too much on winning new business and diversifying.

Mr Lyons said that, since last year’s events, he had sought to beef up the company’s management and board, improve its relationship with the Government and clarify its strategic direction.

He said ongoing moves to review and shake up the group were “necessary steps in putting Serco back on an even keel”.

But Mr Lyons added: “The initial findings of the strategy and balance sheet review point to strategic and operational mis-steps at Serco for which, as chairman of the board since 2010, I take ultimate responsibility.

“It is also the right thing for Serco to select a new chairman, to take the helm for the future.

“Whilst colleagues have asked me not to resign, it has been my intention to step down once a new strategy and direction for the business were in place.

“I am therefore taking the necessary steps to ensure an orderly process for my own succession during the first half of 2015.”

Mr Soames said: “Whilst I respect Alastair’s decision, I want to put on record the fact that he has done an outstanding job stewarding the Company through the travails of the last 12 months.

“Nobody could have worked harder or done more to get us to the point where we can now concentrate on building a solid future for Serco.”

Published: Monday 17th November 2014 by The News Editor

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