G4S Public Limited Company the Secret of Dominance in the Security in Many Countries - Report Example

G4S Public Limited Company

Company Background

G4S public limited company is a British company that provides multinational security services with its headquarters in central London. It is the largest security company in the world in terms of revenues. The company operates in over 125 countries with over 620000 employees. It is also the second largest private employer in the world and the largest private company in the London Stock Exchange. It was founded in 2004 after a merger between the United Kingdom based Securicor public company and the Denmark based Group 4 Falck.

The company works to protect the welfare and prosperity of millions of people globally be helping to establish safer and better environments where people live and work. G4S has a range of services and a broad geographic footprint (operates in six continents) to meet the security demands across the world. The company provides services across numerous sectors that include; government, oil and gas, mining, retail, leisure and tourism, transport and logistics, private energy and utilities, ports and airports, financial institutions and corporates and industrials. G4S has a diverse range of services that meets the requirements of its customers. The five primary services line are; cash solutions, security systems and technology, care and justice services, secure solutions and security systems and technology. The company has a primary listing in the London Stock Exchange and it is a principal of the FTSE 250 Index after it was relegated from the FTSE 100 index in December 2015.

Static Analysis

G4S is administered through a function and regional structure that enables it to deliver its strategic objectives, maintain strong governance framework, build customer relationships, establish integrated solutions and target productive regional markets. The regional chief executives officers are members of the Group Executive team and at the operational level, G4S is managed on geographical basis.

Management and Board of Directors

Name

Audit committee

Nomination committee

Risk Committee

Remuneration committee

CSR committee

John Connolly

√*

√*

Ashley Almanza

√

Adam Crozier

√

√

John Daly

√

√

Mark Elliott

√*

Winnie Kin Wah Fok

√

√

Himanshu Raja

√

Paul Spence

√

√

√

Clare Spottiswoode

Tim Weller

√*

√

*committee chairman

Officers and Directors

• Ashley Almanza, Chief Executive Officer
• Claude Allain, Regional President Middle East & India
• Martin Alvarez, Regional President, Latin America & Caribbean
• Mel Brooks - Regional President, Africa
• Jon Corner, Regional President, Asia Pacific
• John Kenning, Regional CEO North America & Technology
• Graham Levinsohn, Regional CEO – Europe
• Jenni Myles, Group HR Director
• Søren Lundsberg-Nielsen, Group General Counsel
• Peter Neden, Regional President - UK & Ireland
• Himanshu Raja, Group Chief Financial Officer
• Jesus Rosano, Group Strategy and Commercial Director
• Debbie Walker, Group Communications Director

To appoint an auditor, the board of directors at G4S announces its intention to appoint an auditor and recommends to the shareholders the audit company they prefer as the Company’s auditor for the financial year. The company then gives reason as to why a new audit company should be appointed. The audit committee must provide a recommendation to the board after it has conducted a formal tender process of the auditors. PwC replaced KPMG after auditing for the company since 2005.

The members of the Remuneration/Compensation committee at G4S are Mark Elliot who is the chairman, Mark Seligman, John Daly and Winnie Fok. The compensation committee handles all the elements of remuneration of the executive directors, chairperson of the board as well as all the members of the executive committee. When devising the remuneration, it takes considers the structure and approach of employee reward across the company and payment decisions of the larger workforce and the results of applicable benchmarking data. The intention of the remuneration committee at G4S is that the pay reflects the responsibility that is attached to roles achieved, personal performance and the appropriate market information. G4S’s remuneration allows the company to attract, retain and motivated executive directors who will guide the company to the long-term interests of the stakeholders. The committee also follows recommendations for salary increase for various directors. For example, the salary of the CEO was increased to £890000.

Shareholders and Corporate Governance

As of 15 March 2016, the G4S’s major shareholdings (institutional holdings) are;

Name

Equities

%

Invesco

201,914,456

13.01%

BlackRock Inc.

88, 726,926 (ordinary shares)

5.71%

Mondrian Investment Partners Limited

78,613,679

5.07%

Tweedy, Brown Company, LLC

71,420,862

5.06%

Harris Associates LP

78,143,564

5.04%

Woodford Investment Management LLP

78,247,804

5%

Skagen Global

46,872,279

3.02%

In most cases, the annual general meeting at G4S takes place in June for instance; in 2015, it took place on 4 June 2015. A notice of annual general meeting is sent to all the shareholders. It contains the location, the date and time of the meeting. In addition, it has the resolutions or agendas that if thought fit will be passed during the meeting. Among the items that are included in the AGM include the report of accounts, remuneration (approve the director’s remuneration report), dividend (declaration of final dividend), Directors (to reelect directors), Auditor (determine whether to retain or appoint another auditor) and notices of other meetings other than the annual general meetings

Dynamic Analysis

G4S has been subject to numerous litigations it its different operations across the world. It has been accused of violation of numerous laws including labor laws in the different countries. There are fraud cases that the company has dealt with including gross misconduct of its employees. In this section, various litigation that G4S has been involved will be discussed.

G4S faced fraud probes after fraud allegations arose in 2013 after Chris Grayling, the British Justice Secretary demanded the Serious Fraud Office to look into the company for overcharging for tagging criminals in the country. The claimed that the company charged the government for tagging individuals who were not being monitored since 2005, for instance people who were in prison, others had died and others were in prison. The company was asked to take part in a forensic report but declined. However, after the completion of the review by the cabinet, no evidence of deliberate acts of omissions were confirmed. The company agreed to pay a settlement to the government worth £109 million for all the disputed services.

G4S was accused of child abuse in Israel. G4S secured a contract to supply security services and security equipment for prisons in Israel, settlements and checkpoints in the West Bank. G4S Israel signed up an agreement with the prisons authority in 2007, to provide security services and systems in major prisons in the country. In 2012, the company released a report that detailed all of its activities in Israel that included the maintenance of electronic security system at a prison, several checkpoints and police stations in the West Bank. However, human rights activists lodged a protest on the involvement of the company with the Israel prisons. They later wrote a document to the company asking it to stop its involvement in abuse of Palestinian children in the Israel prisons. A report by a G4S correspondent indicated that the firm had not contributory or causal role in any human rights abuse in the country. However, the report indicated that there were human rights violations is some part of the security systems in Israel but the role of the company was far removed from the causes and impact of human rights violations. In 2015, another human rights campaign targeted the company led by the Boycott, Divestment and Sanctions Movement that asked the United Nations to terminate its indentures with G4S. Days later, numerous trade unions joined the demonstration. Amidst constant allegation of human rights violations in the region, on March 2016, G4S retracted its agreements with Israel. Ashley Almanza, the chief executive officer at G4S stated that G4S wanted to exit a several businesses with G4S Israel included. However, human rights activists associated the withdrawal with the increased international campaigns against Israel.

G4S was also linked with the wrongful killing of Jimmy Mubenga. In 2010, three security guards from G4S aggressively restrained and held down John Mubenga, a 46 year-old Angolan expatriate at the Heathrow Airport after he departed flight 77 of the British Airways. Security guards held him down in his assigned seat after he started to shout and resist his extradition. After Mubenga lost consciousness, medical officers at the airport were called and the airplane that was approaching departure retired to the terminal. Later at the Hillingdon, Mubenga died. The passengers aboard the flight reported that they would hear Mubenga crying that they were trying to kill him. A homicide investigation began after Mubenga’s death was categorized as unexplained. The three G4S security guards who had be contracted to provide escort for expatriates were set free on bond after questioning. The incident attracted the attention of the media and The Guardian reported in February 2011 that the security guards had been advised about the use of lethal forces when handling asylum seekers and deportees. Eventually, after six weeks of trials the security guards were found not guilty

Critical conclusion

G4S is a company that has established its dominance in the security in many countries in the world. The company publishes its financial reports annually and makes it available for the public and its shareholders. People can get a copy of these reports from the company website or in some of the newspapers. The report incorporates numerous aspects of the company including the profits, shareholders and dividends among other elements. However, corporate disclosure is not fully practiced by the company. For example, it was hard to get enough data on the names of individual shareholders of the company.