Verizon UK Limited

Section 172 Statement for the financial year ending 31 December 2023

Section 172 Statement

Verizon’s culture, strategies and policies are identified and regularly reviewed at group level by the senior executives of Verizon. Verizon and its group of companies (“Verizon Group”), which includes the Company, believes that it must effectively address and balance the interests of all of its stakeholders, including its shareholders, employees, customers, communities, suppliers and others, in order to put itself in the best position to serve its customers, provide critical services to the community and grow profitably over the long term. This belief is reflected in the breadth and aspiration of the Verizon Group’s corporate purpose to “create the networks that move the world forward”. It is also reflected in the Verizon Group’s values underlying all of the Verizon Group’s decisions: integrity, respect, performance excellence, accountability and social responsibility.

The directors of the Company recognise that their statutory duties are owed to the Company and believe when taking board decisions during the year ended 31 December 2023 that they have acted in a way that they consider, in good faith, would be most likely to promote the success of the Company, having regard to those matters set out in section 172 of the Companies Act 2006 (“CA 2006”). As a wholly-owned subsidiary of Verizon European Holdings Limited, the directors did not consider section 172(1)(f) of the CA 2006 (regard to the need to act fairly as between members) to have been relevant to the proper discharge of their duties.

In their capacity as executives of the Verizon Group, the directors receive a broad range of training, pertaining to their functional roles and more broadly to leadership and other personal skills. To better enable the directors to discharge their duties pursuant to the CA 2006, the directors are briefed specifically on their duties as directors of the Company, in particular when reviewing transactions that require careful analysis of their duties such as those related to solvency.

Regard to the likely consequences of any decision in the long term
When making decisions, particularly those of a strategic nature, the directors, with the support of the relevant business functions and any wider Verizon Group’s policies and strategies which they consider relevant, have regard to the likely long-term consequences of their decisions. Meetings of board directors were held on a regular basis to enable the directors to consider a range of topics and receive reports and updates from the business including, but not limited to, those pertaining to financial performance, tax, treasury, statutory audit matters, environment, health and safety and employment.

During the year, the directors both at board meetings and in the course of their day to day management of the Company were supported by a number of corporate functions, including Legal, Accounting, Treasury, Tax, Human Resources, Compensation & Benefits and business functions covering the provision of services to customers, and the procurement of services from vendors.

Regard to the interests of the Company’s employees
The directors, in conjunction with the wider functions within Verizon, including in particular its Human Resources and Compensation and Benefits teams, recognise the need to engage with employees and have regard to their interests. The Company’s employee engagement statement, as set out in the Directors’ Report in the annual report and accounts for the financial year ended 31 December 2023, provides examples as to how the directors engaged with its employees.

Group wide employee benefits, including employee pension schemes, health insurance, income protection insurance and death in service insurance, and other measures such as market rate compensation packages, are in place and the directors believe that these ensure that its employees’ interests are well cared for.

Regard to the need to foster business relationships with suppliers and customers
The directors have a broad understanding of the multitude of group policies and initiatives in place to support supplier and customer relationships and which they, with the support of the relevant internal functions, have regard to where applicable when taking board decisions. The Company’s statement of engagement with customers and suppliers, as set out in the Directors’ Report in the annual report and accounts for the financial year ended 31 December 2023, sets out some of the group’s policies and initiatives in this respect.

Regard to the impact of the Company’s operations on the community and environment
Verizon is committed to protecting the environment and to supporting the communities where it operates. The Verizon Group’s Global Real Estate, ESG, Corporate Social Responsibility, Sustainability, Product, and Sourcing teams, are just some of the experts who can support the directors of the Company when considering the impact of the Company’s operations on the community and environment. Citizen Verizon, a company-wide responsible business plan, serves as a framework for Verizon to leverage its resources, technology, and employees to drive progress in three key areas, Climate Protection, Digital Inclusion, and Human Prosperity. That framework includes, for example, Verizon Group climate-related goals, a structured employee volunteering program with volunteering champions throughout the business and a UK Verizon Green Team made up of hundreds of UK-based employees who work to help reduce Verizon’s environmental impact at work, in the home and the community through specific events and education. In 2023, over two-thirds of all UK employees across the Verizon Group got involved and 7,530 hours were spent volunteering.

In 2023, the Company only purchased electricity generated by wind and hydro assets and the Company has Green Electricity Certification.

During 2023, the directors approved the Company’s carbon reduction plan which includes the Company’s specific carbon reduction commitments, and environmental management measures and projects, and is aligned with the broader Verizon Group emissions reporting methodology.

During the year, specific examples of how the directors, with the support of the various relevant business functions, continued to make day to day decisions having regard to those matters set out in section 172 of the CA 2006 are set out below.

A new executive briefing and innovation centre was opened in March 2023 in the Company’s central London location. The centre has facilitated interaction with customers, enabled Verizon to showcase technology and enabled review of customer goals, the exchange of ideas and consideration of new strategies, thereby continuing to improve customer relationships.
As part of the consolidation of floor space at the Reading office, the directors recognised the opportunities this would give employees to collaborate more and work more closely on those days they are in the office which was even more important given the hybrid working arrangements.
The directors were briefed on the HCLTech transaction, further details of which, including how employees’ interests were taken into account, are set out in the Company’s employee engagement statement, in the Directors’ Report in the annual report and accounts for the financial year ended 31 December 2023.

The Company’s statement of employee engagement, as set out in the Directors’ Report in the annual report and accounts for the financial year ended 31 December 2023:

The Verizon Group is committed to creating a workplace which is diverse, inclusive and inspiring. The Group’s priorities remain focused on building a culture of engagement which enables employees to thrive and grow in their careers. The directors of the Company are committed to ensuring its employees are engaged and recognise that such engagement is fundamental to how the Company achieves success as a business. It drives Verizon’s purpose of creating the networks that move the world forward. Examples of new and existing initiatives which continued to strengthen engagement with the Company’s employees during 2023 are set out below.

The Work Forward program was launched in May 2022 and is intended to transform how, when and where employees work and to provide them with greater flexibility and a better work life balance. The majority of the Company’s employees work to a hybrid model and meaningful in-office schedules, serving as a baseline for attending a Verizon location, were agreed with managers in 2021. Since the implementation of the Work Forward program in 2022, employees have continued to follow their individual schedules with the aim to foster employee engagement, collaboration, positive social interactions and increase working efficiency whilst carefully balancing these with the need for flexibility and work life balance. Implementation of the Work Forward schedules for hybrid employees has been flexible with individual employee needs or concerns being reviewed by managers if required. The introduction of a formal schedule is also considered to have fostered greater consistency across all departments when developing working models, where for example working from home may not have previously been an option.
An annual PULSE+ survey was conducted in 2023 seeking feedback on the Verizon Group’s culture of engagement and inclusion. In addition, quarterly PULSE surveys were conducted during the year to gauge employees' overall satisfaction and seek feedback on specific topics identified as being priorities of the business. Responses from all surveys were continually reviewed by people leaders across the business and appropriate action plans were identified from the responses received and communicated to employees to drive improvements across the business.
A roadshow webinar event was held in 2023 to raise awareness of and promote all of Verizon’s Employee Resource Groups (ERG), which are employee-led, company-sponsored groups, that fuel Verizon’s culture of inclusion and equity to support Verizon’s diversity strategy. Verizon’s ERG’s were also represented at the employee Be Well, Work Well day and Citizen Verizon volunteering events.
A series of on-site employee-led culture, diversity, and development days were hosted during the year. Days involved guest speakers, culturally relevant food, social media activations, and volunteering activities. Examples of such days in 2023 included: International Women’s Day, Pride Month, Women’s History Month, Citizen Verizon Volunteering Day, and World Mental Health Day.
Career development programs supporting the Company’s commitment to women’s career growth and the development of future leaders continued. For example in 2023, the previous Verizon’s Women of the World (WOW) program evolved into WOW Connect Series 2023 which was a three-part workshop series covering topics that focused on building key skills such as self-advocacy, networking, and influence.
Employees received regular communications on health and wellbeing resources available to support them, including an Employee Assistance Programme, on-demand webinars and a ‘Be Well, Work Well’ day to highlight the benefits and wellbeing resources available to UK employees. Office based events were organised to encourage opportunities for connection and in-person collaboration. EMEA Team Talks continued throughout 2023. ‘EMEA Team Talks’ is an employee engagement and culture programme offering employees an escape away from the pressures of day-to-day, encouraging employees to ‘take time’ from busy schedules. Webinars were hosted by the Verizon EMEA leadership team, providing an opportunity to hear from inspirational and diverse external speakers with different perspectives to share. Themes included Kindness & Integrity, Bias to Action, Shared Success and Winning Mindset.
Employees of the Company were invited to attend all-hands meetings held by senior executives and departmental managers. These provided employees with an opportunity to engage with the strategies and initiatives of the business and raise questions. The contribution made by employees to the success of the business was also recognised.
In August 2023 Verizon Business announced a global strategic partnership with HCLTech. HCLTech is a leading provider of digital, engineering and cloud services and is located in 60 countries worldwide. The strategic partnership involves HCLTech delivering wireline managed and unmanaged network services to the Company for Verizon clients. As a result of this strategic partnership, 198 employees of the Company transferred employment to HCLTech UK Limited by operation of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE’) on 1 December 2023. In accordance with TUPE, the UK transaction was subject to information and consultation with the Company’s UK Works Council body. Directors were briefed on the HCLTech transaction and during information and consultation with the UK Works Council, employees' concerns and interests were taken into consideration by, among other things, engaging with staff on the commercial reasons for the global transaction, explaining how and when services would transfer in the UK to HCLTech, and any measures HCLTech was expecting to take which may affect UK transferring employees. Engaging with staff in this way, helped reduce uncertainty for the in-scope population, allowed the Company’s management to identify and resolve any potential issues pre-transfer, and helped facilitate the smooth transfer of people and services to HCLTech on the planned date.

The Company’s statement of engagement with suppliers, customers and others, as set out in the Directors’ Report in the annual report and accounts for the financial year ended 31 December 2023:

The directors recognise that it is critical for the ongoing success of the Company to foster strong relationships with its customers, suppliers and wider stakeholders and to continually engage effectively to better understand stakeholder needs and to adapt accordingly. A framework of Group policies and procedures are in place which strengthen stakeholder relationships.

Group policies and initiatives which continued to strengthen and improve customer relationships in 2023 included:

continuation of Proof of Concept and Proof of Value trials to help customers evaluate the commercial viability and operational readiness of new transformative technologies;
executive briefings to consult with customers wanting to expedite their digital operating models to help enable Fourth Industrial Revolution technologies;
a ‘Pathfinder’ virtual community whereby contacts from across the Company’s customer base convened on a monthly basis, either virtually or at physical community gatherings, to hear from impactful and renowned public speakers, and discussed ideas for addressing common leadership challenges;
a service delivery organisation which helped ensure customer services were delivered in line with customer expectations;
customer account management which focused on customers’ key business imperatives;
management of the life cycle of customer contracts;
customer satisfaction surveys conducted by a third party provider which actively sought customer feedback and provided an opportunity to improve customer services;
online and on site service demonstrations with customers;
partnering with key customers and tech partners on joint corporate social responsibility and volunteering initiatives. Applying the principle that we achieve more together, examples of 2023 initiatives included Girls into STEM Workshops and retail tech career sessions;
the HCLTech partnership, referred to in the Employee Engagement Statement above and the Strategic Report to these financial statements, is expected to improve customer experience and ease doing business;
ongoing review by the logistics teams of carriers’ performance with the aim being to improve lead times of products shipped to customers’ sites. Where considered appropriate, the Global Supply chain has put in place transportation agreements between the Verizon Group and new carriers to try and improve lead times, and performance will continue to be monitored in terms of price, quality of service (including reliability, number of lost packages in transit and compliance) and speed of delivery; and
developments to the existing software platform for supply chain automation solutions to increase visibility to customer orders’ status, thus enhancing customers’ experience.

Group policies and initiatives which continued to strengthen and improve supplier relationships in 2023 included:

continued use of a world-class procurement and supply chain collaboration solution streamlining interaction with suppliers through the 1Sourcing (Ariba) Platform;
continued commitment to dedicated supplier risk management processes and integration into sourcing tools and processes, to ensure continuity and adherence to all supplier risk processes;
supplier due diligence processes to assess supplier risks, including as to financial viability and legal compliance around issues such as data privacy and the protection of proprietary information;
a supplier code of conduct that contains principles to promote ethical conduct in the workplace, safe working conditions, the reporting of concerns to Verizon, the protection of confidential and personal sensitive information, the treatment of workers with respect and dignity, supply chain risk management and responsible supply chains;
continued commitment to working with a diverse set of suppliers to ensure customers have access to superior service and experience; and
regular review of Verizon’s sourcing policies and business process guidelines, which help ensure the fair and consistent treatment of suppliers and outline the requirements that apply internally when Verizon functions procure products and/or services.

UK Government Departments and Regulators:
The Company continued to foster its relationships with relevant UK Government departments, such as the Department for Science, Innovation and Technology (DSIT), the Home Office, the Department for Business and Trade (DBT), and the Department for Energy Security and Net Zero (DESNZ), as well as with its regulators, Ofcom and the Information Commissioner’s Office (ICO).

In 2023, Verizon worked closely with the Department for Science, Innovation and Technology regarding its call for information on private network security and in relation to the Designated Vendor Directions. Verizon has also worked closely with the Home Office on the progress of the Investigatory Powers (Amendment) Bill through Parliament.