Principal and emerging risks

• Established safety systems, site visits, safety audits, monitoring and reporting, and detailed health and safety policies and procedures are in place across the Group, all of which focus on prevention and risk reduction and elimination.
• Thorough and regular employee training programmes.
• Director-led safety leadership teams established to bring innovative solutions and to engage with all stakeholders to deliver continuous improvement in standards across the business and wider industry.
• Close monitoring of subcontractor safety performance.
• Priority board review of ongoing performance and in-depth review of both high potential and reportable incidents.
• Regular reporting of, and investigation and root cause analysis of, accidents, incidents and high potential near misses.
• Behavioural safety cultural change programme.
• Occupational health programme, including mental health.
• Achievement of challenging health and safety performance targets is a key element of management and staff remuneration.
• Detailed due diligence on new acquisitions and effective integration of SHE processes and systems.
• Our new safety initiative, 'Safer@Severfield' was launched in 2023.

Trend
 

Link to strategy

Link to KPIs
123567

Scoring
High

• Process in place to select supply chain partners that match our expectations in terms of quality, sustainability and commitment to client service – new sources of supply are quality controlled.
• Ongoing reassessment of the strategic value of supply relationships and the potential to utilise alternative arrangements, including for steel supply.
• Contingency plans developed to address supplier and subcontractor issues (including the failure of a supplier or subcontractor).
• Monthly review process to facilitate early warning of issues and subsequent mitigation strategies.
• Strong relationships maintained with key suppliers, including a programme of regular meetings and reviews.
• Implementation of best practice improvement initiatives, including automated supplier accreditation processes.
• Key supplier audits are performed within projects to ensure they can deliver consistently against requirements.

Trend
 

Link to strategy

Link to KPIs
123456

Scoring
medium

• Training and development schemes to build skills and experience, such as our successful graduate, trainee and apprenticeship programmes.
• Detailed succession planning exercise completed in 2023 identifying for development future senior leaders within the business.
• Attractive working environments, remuneration packages, technology tools and wellbeing initiatives to help improve employees’ working lives and above average inflation pay review in 2022 and 2023.
• Annual appraisal process providing two-way feedback on performance.
• Internal communications continually improved.
• Interviews with leavers and joiners to understand the reasons for their decision.
• Three-year goals have been defined around HR operational efficiency, evolving our approach to performance, development and careers and creating an environment where Severfield employees feel listened to and are fairly recognised and rewarded for their contribution to the Group.
• One-off cost-of-living payment agreed for the start of 2024.
• Maintained our approach to flexible working practices and remote working.

Trend
 

Link to strategy

Link to KPIs
1236

Scoring
Medium

• Regular reviews of market trends performed (as part of the Group’s annual strategic planning and market review process) to ensure actual and anticipated impacts from macroeconomic risks are minimised and managed effectively.
• Regular monitoring and reporting of financial performance, orders secured, prospects and the conversion rate of the pipeline of opportunities and marshalling of market opportunities is undertaken on a co-ordinated Group-wide basis.
• Selection of opportunities that will provide sustainable margins and repeat business.
• Strategic planning is undertaken to identify and focus on the addressable market (including new overseas and domestic opportunities).
• Monitoring our pipeline of opportunities in continental Europe and in the Republic of Ireland, supported by our European business ventures.
• The Group closely monitors the flows of goods and people across borders for ongoing work with the EU and specific risks and related mitigations are kept under review by the executive committee. We have taken steps to ensure we can continue to deliver on current and future contractual commitments.
• Maintenance and establishment of supply chain in mainland Europe.
• Close management of capital investment and focus on maximising asset utilisation to ensure alignment of our capacity and volume demand from clients.
• Close engagement with both customers and suppliers and monitoring of payment cycles.
• Ongoing assessment of financial solvency and strength of counterparties throughout the life of contracts.
• Continuing use of credit insurance to minimise impact of customer failure.
• Strong cash model and balance sheet supports the business through fluctuations in the economic conditions of the sector.
• Acquisition of Harry Peers and DAM Structures has broadened our reach and cross-selling opportunities, resulting in improved market resilience.

Trend
 

Link to strategy

Link to KPIs
123456

Scoring
Medium

• Improved contract selectivity (those that are right for the business and which match our risk appetite) has derisked the order book and reduced the probability of poor contract execution.
• Estimating processes are in place with approvals by appropriate levels of management.
• Tender settlement processes are in place to give senior management regular visibility of major tenders.
• Use of the tender review process to mitigate the impact of rising supply chain costs.
• Work performed under minimum standard terms (to mitigate onerous contract terms) where possible.
• Use of Group authorisation policy to ensure appropriate contract tendering and acceptance.
• Adoption of Group-wide project risk management framework (‘PRMF’) brings greater consistency and embeds good practice in identifying and managing contract risk.
• Professional indemnity cover is in place to provide further safeguards.
• Use of price indexation clauses in certain contracts

Trend
 

Link to strategy

Link to KPIs
12345

Scoring
Medium

• IT is the responsibility of a central function which manages the majority of the systems across the Group. Other IT systems are managed locally by experienced IT personnel.
• Significant investments in IT systems which are subject to board approval, including anti-virus software, off-site and on-site backups, storage area networks, software maintenance agreements and virtualisation of the IT environment.
• Specific software has been acquired to combat the risk of ransomware attacks.
• Group IT committee ensures focused strategic development and resolution of issues impacting the Group’s technology environment.
• Robust business continuity plans are in place and disaster recovery and penetration testing are undertaken on a systematic basis.
• Data protection and information security policies are in place across the Group.
• Cyber-crimes and associated IT risks are assessed on a continual basis and additional technological safeguards introduced. Cyber threats and how they manifest themselves are communicated regularly to all employees (including practical guidance on how to respond to perceived risks).
• ISO 27001 accreditation achieved for the Group’s information security environment and regular employee engagement undertaken to reinforce key messages.
• Insurance covers certain losses and is reviewed annually to establish further opportunities for affordable risk transfer to reduce the financial impact of this risk.

Trend
 

Link to strategy

Link to KPIs
1245

Scoring
Medium

• The Group has identified minimum standard terms which mitigate contract risk.
• Robust tendering process with detailed legal and commercial review and approval of proposed contractual terms at a senior level (including the risk committee) are required before contract acceptance so that onerous terms are challenged, removed or mitigated as appropriate.
• Regular contract audits are performed to ensure contract acceptance and approval procedures have been adhered to.
• We continue to work with the British Constructional Steelwork Association to raise awareness of onerous terms across the industry.
• Through regular project reviews we capture early those occasions where onerous terms could have an adverse impact and are able to implement appropriate mitigating action at the earliest stage

Trend
 

Link to strategy

Link to KPIs
1245

Scoring
Medium

• We have demonstrated a commitment to reducing our carbon footprint by becoming carbon neutral and established other stakeholder influenced sustainability related targets, such as net zero by 2050.
• We are rated B by CDP in the management band.
• We have appointed a head of ESG who monitors current legislation and expectations and develops Group strategy to facilitate and implement plans for compliance.
• We are raising internal awareness of the steps we are taking and developing closer working relationships with clients and suppliers.
• We monitor shareholder comments on the annual report and accounts and in one-to-one meetings.

Trend
 

Link to strategy

Link to KPIs
12367

Scoring
Medium

• Employee and union engagement takes place on a regular basis.
• The Group has seven (including the recently acquired VSCH facilities in Rijssen) main production facilities so interruption at one facility could to some extent be absorbed by increasing capacity at a sister facility.
• Processes are in place to mitigate disruptions as a result of industrial action.

Trend
 

Link to strategy

Link to KPIs
1235

Scoring
Medium