G4S under close scrutiny
With a licence to demand any document, interview any colleague, enter any building and expect the co-operation of every executive and manager, the G4S Internal Audit team is the impartial judge of how well each business is managed.
They are not lawyers, but they probe legal matters. They are not human resources experts, but they check out contracts and staffing. They are not statisticians but they study performance figures. And though many are highly qualified accountants, looking at the books is just one part of their enormous remit.
Their work is so important that, along with the Board of Directors, executive management and external audit, they are considered one of the four cornerstones of good corporate governance in G4S.
Their task is daunting by any standards. Checking out the performance of 170 different businesses in 110 countries and reporting back to the G4S Audit Committee, they range the world in a sort of perpetual motion.
Each year they complete 120 audits in roughly 50 countries. No sooner has one year’s programme been completed, than they are off on the next year’s trail of research and report.
It is a gruelling schedule. Phil Summerton, head of Group Internal Audit, is a 16-year veteran of the internal audit business.
“Doing our job becomes a lifestyle,” he says, “involving 50 per cent of the time travelling. You can do it for three or four years but then it does become tough. It does not mix with family and home life. People think it is a really exotic way to live, but after a while a hotel is just a hotel and the work is hard with long hours.
“It can be lonely, too, but it is a great development area. Aspiring people come in, progress, see the world … and get head hunted by a business. The thing that gives me greatest pleasure is watching someone blossom in the department.”
Totally independent, internal audit does not run any operations itself, nor is it responsible for the activities it reviews. It is a task calling for a special sort of operator.
Much more than just accountants
Phillip Summerton sums it up: “Traditionally, we have recruited top accountants with good internal or external experience, but the job requires far more than that. We need somebody who is a jack of all trades who can look at, say, contract law or the working of a security business.“They have to understand, among many other things, the different tax, business and human resources laws of each country they visit. If we simply took on a lawyer, a cash or security expert, they would be very good at single subjects but might not give us the breadth that we need. What we look for are people who are intelligent, have the ability to think analytically and work their way through broad and often complex problems.
“We need people who have influence and can network so that if they do not know a business they can call other people and get help. For example, when we look at certain elements of contract law we talk to specialists who will tell us the sort of things to look for. These days, the internet is a great help as well. The important thing is to understand our limitations and be open to suggestions.
“We do not go in and say we are the experts. Managers should not see us as arrogant intruders but as members of the G4S team, coming in to help. They certainly should not regard us as the police or feel they should hide everything away.”
Sometimes shortcomings are unearthed. They have found cases, for example, where people need to comply more strictly with local tax laws. In some cases, managers did not fully understand the law and needed guidance. But often their role is to provide G4S businesses with reassurance, as well as enhancing their strengths.
“If a manager has accidentally overcharged a client, for example, our job is to see that the matter is put right rather than ignored. We cannot allow things like that to be swept under the carpet.
“We also have a whistle-blowing telephone hotline and e-mail facility – which come in directly to me – where people can report major non-compliance or even allegations of fraud. ”
The biggest challenge for the team was helping to reconcile the control practices of both Group 4 and Securicor after they merged to become G4S in 2004.
“We played our part in achieving big improvements in Group standards and best practice,” Phillip observes.
“Since then, we have provided ideas for a tailor-made internet system for risk management. Like much of our work, it gives assurance to top management that the business is well on course.
“It means they can sleep more soundly at night.”
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G4S under close scrutiny
