Governance
Our Approach
Our responsible business approach is integral to everything we do, and effective governance is central to achieving our objectives here as in all other elements of our vision of becoming a world-class service company. Our strong governance policies and practices, under the umbrella of our Code of Conduct, underpin the achievements outlined in other parts of this Report. Whether winning awards for rigour in health and safety, for diversity and inclusion, for setting standards for our supply chain or for our market-leading attractiveness as an employer of choice. It is also recognised in our strong scores in leading indices such as Dow Jones Sustainability Index (DJSI).
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Our Approach
Our responsible business approach is integral to everything we do, and effective governance is central to achieving our objectives here as in all other elements of our vision of becoming a world-class service company. Our strong governance policies and practices, under the umbrella of our Code of Conduct, underpin the achievements outlined in other parts of this Report, whether winning awards for rigour in health and safety, for diversity and inclusion, for setting standards for our supply chain or for our market-leading attractiveness as an employer of choice. It is also recognised in our strong scores in leading indices such as the Dow Jones Sustainability Index (DJSI).
The Chief Executive has Board responsibility for our environmental, social and governance (ESG) approach, and the Executive Leadership Team governs the introduction of responsible business approaches as well as reviewing progress and performance against our targets and metrics, in particular in relation to health, safety and the environment.
The Board reviews specific areas of the responsible business agenda regularly and considers all areas at least annually. It operates in compliance with the UK Corporate Governance Code and to the highest corporate governance standards. In 2019, in addition to the normal governance calendar, it had a dedicated session as part of the annual strategy review specifically in relation to environmental performance and strategy. The Audit Committee considers the structure and effectiveness of the company’s internal controls framework and risk management processes, with management’s Group Risk Committee reviewing key areas of risk (including safety, people, operations, IT etc) and monitors the external environment to identify emerging risks as well.
The Senior Leadership Forum (the 26 most senior executives across the business) meets in person at least three times per year and monthly by telephone to address key issues and ensure alignment of responsible business activities to the business plan. Health, safety and the environment are always the first agenda item in all Board and senior management meetings, to ensure governance of this area is accorded the highest priority. The Investment Committee manages investments in acquisitions and expenditure on property assets, as well as risks from environmental exposures, disputes and contracts, in accordance with a defined Group Authority Schedule.
Governance Model
Rentokil Initial’s governance model identifies the roles of the Board, functions (determining best practice and governance) and country and regional teams (delivery within the framework of policies and local laws). The Company’s risk management process includes consideration of material ESG issues, with appropriate detailed management by dedicated functions (for example technical and safety teams), together with monitoring against group standards and policies on a periodic basis by Internal Audit.
An update on Safety, Health and Environment (SHE) performance is provided to the Board at each meeting, with a specific environmental review at least annually. The award-winning SHE team’s remit includes developing Health and Safety standards with appropriate colleague training, reviewing performance and initiating remedial activity in under-performing parts of any business.
The Company does not permit political lobbying on its behalf by colleagues, although responding to new regulations through trade associations is acceptable. The Company has membership of trade associations around the world but does not employ any public affairs consultancy as a means of influencing political decision making.
Policy Framework
Rentokil Initial has a robust policy framework for each of the Responsible Business areas.
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Rentokil Initial has a robust policy framework for each of the Responsible Business areas, covering:
- Anti-corruption and bribery
- Health and safety
- Environmental management
- People matters
- Human rights
- Modern Slavery
- Supplier Code
- Relationships with customers and suppliers
- Community involvement
- External affairs and political lobbying
Our key policies are available on the Company’s website (https://www.rentokil-initial.com/responsible-delivery/policies.aspx). They are reviewed periodically to ensure they meet current good practice and legislative needs.
The cornerstone of this policy framework is the Code of Conduct which is available both on our website and intranet and published in multiple languages. It articulates a commitment not just to comply with all applicable legal requirements but also with high standards of professional conduct. It outlines responsibilities to colleagues, customers, suppliers and communities as well as to the Company. It highlights our determination to embed our values of Service, Relationships and Teamwork and a culture of integrity across the Company. A Code of Conduct training programme helps to support new colleagues and includes regular refresher programmes for existing colleagues.
We also operate an annual Letter of Assurance process, which is required to be signed by all senior management to confirm they comply personally with key corporate policies and the Code of Conduct, and that the colleagues for whom they are responsible are aware of and understand what is required of them. Details must be provided of any areas of non-compliance or uncertainty. The process is monitored by the Company’s Group General Counsel with review of the process and a report being provided to the Company’s Audit Committee each year.
Rentokil Initial’s statement on its approach for the avoidance of Modern Slavery is also published on its website (https://www.rentokil-initial.com/responsible-delivery/modern-slavery-statement.aspx). This covers its Global Procurement operations and major local suppliers. Also on the website are the Company’s Gender Pay Reports for UK colleagues.
In 2019, Rentokil Initial retained its membership of the Dow Jones Sustainability Index Europe for the thirteenth year, and also retained membership of STOXX ESG Leaders Index, CDP and FTSE4Good. These indices are of importance to the Company because they enable us to benchmark our performance in this area against other business services companies, as well as reinforcing the importance of the elements assessed.
Adhering to the Policies
Adherence to these policies is monitored through a number of methods, including tracking completion of mandatory training modules (including the Code of Conduct) on our U+ platform, through monitoring of key targets and KPIs through the Company’s Internal Audit team.
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Adherence to these policies is monitored through a number of methods, including tracking completion of mandatory training modules (including the Code of Conduct) on our U+ platform, through monitoring of key targets and KPIs and through the Company’s Internal Audit team, who conducted 29 audits in 22 countries in 2019.
The Audit Committee also receives regular reports of matters reported via Speak Up, our internal whistleblowing process, as well as reports on the effectiveness of internal controls and any control failures. The number of Speak Ups increased in 2019 to 65 compared with previous years, but the nature of the matters reported indicates that this increase is likely to be the result of better awareness of the Speak Up facility rather than a worsening of the internal control environment. All Speak Ups are investigated and the majority of them relate to routine employment matters; very few relate to allegations of fraudulent activity, which remains at a very low level across the Group. They are distributed broadly in line with the distribution of our global workforce, indicating better internal communication of this facility and the absence of particular concern in any specific part of the business.
In order to reinforce policy adherence, mandatory core compliance training for all colleagues is undertaken by online U+ training modules in the following:
- Code of Conduct
- Preventing bribery and corruption
- Preventing anti-competitive practice
- Conflicts of interest
- Securing Information and protecting privacy
Online training modules are also provided on modern slavery, preventing the facilitation of tax evasion, data privacy, and preventing insider trading, as well as on many other topics from safety to HR process adherence.
Our human rights policy outlines the human rights principles that reinforce colleagues expected behaviours. It acknowledges our responsibility to respect human rights, acting with due diligence to avoid infringing on human rights. There were no human rights violations reported in 2019. As a result of our actions, two of our suppliers have changed their practices which contravened our modern slavery statement, returning passports to their workers.
Anti-Bribery and Corruption policy and controls are addressed within the Code of Conduct and a separate Anti-Corruption policy, and these are reinforced by mandatory training, reviews and supplier audits, tracking registers and Speak Up.
c.16,600 Core Corporate Compliance training courses were completed by colleagues in 2019, with a 96% completion rate overall. There were no fines, penalties or settlements for corruption reported in 2019.
Operational policy procedures strengthen formal compliance. An example is Rentokil’s ‘Pink Note’ system, explicitly governing activities relating to technical processes including for example the use of chemical products, conducting services on aircraft. These are prohibited unless approved in line with the Pink Notes, which detail the risks and relevant operational issues, set out the internal approvals required before proceeding, and link to more detailed operational procedures for carrying out the activities themselves.
Our Stakeholders
We engage with stakeholders regularly in different ways to gather their opinions and inform our decision making. This includes contact during business activities, face-to-face meetings and engagement on specific issues such as regulation.
Materiality
The Company considers the materiality of its Responsible Business impacts and the importance of each impact to the business as a whole. This process includes analysing questions posed by major customers in contract tendering processes; reviewing colleagues’ responses to corporate responsibility related questions in Your Voice Counts; and reviewing questions received from socially responsible investment third parties.
Our materiality matrix was reviewed in 2019 in light of the divestment of major workwear facilities in European countries (excluding France), and the increasing digitalisation of the business operations. The revised chart showing priorities of greatest potential importance to stakeholders is shown below:
Responsible Approach to M&A
The Company takes a rigorous approach to the governance of its acquisitions (M&A) strategy including detailed requirements and processes for all its acquisitions. In 2019, the Company acquired 41 businesses.
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The Company takes a rigorous approach to the governance of its acquisitions (M&A) strategy including detailed requirements and processes for all its acquisitions. In 2019, the Company acquired 41 businesses.
The Investment Committee is required to approve entering into discussions or executing a transaction with any potential seller or buyer. Before purchases are finalised, the merger and acquisitions team reviews the business to be acquired to assess its ability to meet the standards of Rentokil Initial’s ESG policies and practices, as well as meeting strictly defined investment case criteria. Most of the businesses we buy do not operate to standards as high as those at Rentokil Initial. In this case, the decision of whether or not to proceed will depend upon a view of the acquired management’s ability, with our local management’s and central function’s support through our defined integration process, to upgrade its practices to meet or exceed our minimum standards. In more than one case, an acquisition was abandoned because the acquired management was not considered to have the ability to successfully adapt its existing policies and practices, or where a governance and compliance issue in the target business did not meet our Code of Conduct requirements.
Once the acquisition has occurred, the internal audit teams will make several visits – at least 30 days after acquisition and then 100 days after acquisition to ensure the Company’s policies and practices are being integrated within the new acquisition. If the acquisition is sufficiently large, as was the case with the formation of the Rentokil PCI joint venture in India then specialists from outside the country will be brought on board to support the existing country management and the newly acquired management in the integration of the new business to meet the Company’s standards.
Performance and Remuneration
Across the Company, many colleagues have personal development goals in areas such as training, retention, safety, sustainable product launches and supply chain management, in addition to operational or other business performance objectives. However in 2019 for the first time, the Remuneration Committee added the following three responsible business elements to the range of strategic measures over the three-year performance period for the Company’s Performance Share Plan award:
- Employee Retention – based on our average sales and service colleague retention
- Customer Satisfaction – based on our average Customer Voice Counts (a Net Promoter Score metric)
- Environment improvements – based on the average reduction in our CO2 emissions index
Operational Targets
During 2019, we have made significant progress in our key sustainability priority areas – in particular: Safety, People and diversity, Service and innovation, Environment, Digital and Communities.
| 2019 Targets | Progress in 2019 | Targets for 2020 |
| 8% reduction in Lost Time Accident rate and an 11% reduction in Working Days Lost rate compared with 2018. | We delivered our safest year with Lost Time Accidents down by 16% and a 26% reduction in Working Days Lost rate. | Deliver improvements in LTA and WDL of at least 5%. |
| More than one million courses undertaken; videos and content views on U+ in 2019 and launch a new programme to enhance diversity. We will undertake a major confidential survey of all colleagues to assess engagement and enablement. We will undertake a development programme to enhance line manager capability. | c.1.8 million courses were undertaken on our digital learning platform, U+. c.800 new pieces of content were produced. The all-colleague survey was undertaken with a record 90% response rate and we continued to develop our managers.Our line manager training has been an important driver in colleague retention. To date, over 600 line managers have been targeted to undertake the programme from 37 countries | Deliver over 1.5 million views of digital training content. Create over 500 new piece of training content. Continue to foster a diverse and inclusive culture. |
| Deliver a State of Service above 95%. Continue to measure Net Promoter Scores across the business and maintain a strong pipeline of innovations. We will build our expertise in vector control. | At 97%, state of service remains above our 95% target; NPS improved by 2.4 points and we continued to roll out our pipeline of innovations. Strong progress in digital pest control with over 9 million digital records on our pest control command centre every day. | Deliver a State of Service above 95%. Deliver over 100,000 Net Promoter Scores calls to customers to measure customer satisfaction and maintain a strong pipeline of innovations. Launch digital Hygiene services. Build Vector Control capability and scale. |
| In the Environment, by the end of 2020, a reduction of 20% in the intensity rate of emissions, compared with the 2016 baseline. Protect rainforest as part of our carbon mitigation plans in line with prior year (c.850 acres each year). | We exceeded our environment target (20.4% at the end of 2019) one year in advance and protected c.850 acres of rainforest through our continued work with Cool Earth to protect vital rainforest. | Launch our programme of 7 environment work streams and develop new carbon targets to take the business towards net zero. Protect c.850 acres of rainforest with Cool Earth. |
| £235,000 cumulative donations to Malaria No More UK (MNM) by the end of 2019 and 2,500 adults and children taught in 2019 through Better Futures. New Community investment fund. | £237,000 had been raised for MNM by the end of 2019. 7,540 people were taught through Better Futures in 2019. The RI Cares fund was launched. | Establish RI Cares ambassadors in every Region. Take the cumulative total number of adults and children supported by Better Futures to over 29,000. |
Our Responsible Business
Find out more about our seven environmental work streams, our 2019 performance and ambitions.
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Find out more about our workplace and diversity programmes, our 2019 performance and future ambitions.
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Find out more about our business performance indicators over the last five years.
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