British American Tobacco - Our Standards of Business Conduct compliance

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Our Standards of Business Conduct compliance

Monitoring our adherence

Our Standards of Business Conduct (SoBC) apply to all our Group companies and employees.

Employees are required to report any instances of non-compliance and managers are required to take appropriate disciplinary action in cases of non-compliance. Retaliation against employees for reporting information or raising questions in good faith about possible violations is itself a breach of the Standards.

Any allegations are investigated internally and strong action is taken where necessary.

All business units worldwide complete an annual self-assessment against our key audit controls, in which they confirm they have adequate procedures in place to support SoBC compliance.

In addition, all staff working across the Group are required to complete an annual sign-off, confirming their commitment and adherence to the SoBC., As part of this annual sign-off employees disclose and re-declare any personal conflicts of interest, and review / update their previously disclosed conflicts of interest.

Continuous information on compliance with the Standards through the year is gathered at a global level and reported to the Regional Audit and CSR committees, and quarterly to the Board Audit Committee.

All Group companies have adopted the SoBC or local equivalent.

2019 compliance

In 2019, over 25,000 Group company employees completed our annual SoBC sign-off and e-learning through the online SoBC portal. In total, our 2019 SoBC e-learning resulted in 10,800 training hours and included scenarios covering product diversion, money laundering and bribery and corruption risks. Other Group company employees (over 30,000), who do not have easy online access, completed the SoBC sign-off in face-to face sessions, which included training. For the first time, all employees were also asked to make an ‘integrity pledge’ – a positive personal commitment for the year ahead.

In our 2019 global ‘Your Voice’ survey, completed by 90% of Group company employees, we asked for the first time if employees felt they “can report concerns about actual or suspected wrongdoing at work without fear of reprisal” – 79% strongly agreed, 8% higher than the FMCG comparator norm. This level of confidence in our Speak Up channels and procedures is reflected in the increase in 2019 of contacts to our SoBC portal. Not all contacts made via our SoBC portal involve SoBC allegations; some relate to questions regarding the SoBC or other matters. There were 497 SoBC contacts in 2019 and 359 of the contacts were assessed as SoBC allegations, representing a 35% increase on the total number of SoBC contacts in 2018 (266 contacts).

In the year ended 31 December 2019, of the 359 SoBC allegations reported, 130 were established as breaches and appropriate action taken (2018: 126). In 179 cases, an investigation found no wrongdoing (2018: 140). In 50 cases, the investigation continued (2018: 69), including investigation through external legal advisers of allegations of misconduct. Disciplinary action taken as a result of the 130 established SoBC breaches resulted in 80 dismissals (2018: 92). In 184 of the 359 SoBC allegations (51%), the person raising the allegation chose to remain anonymous.

Taking action

The appropriate action will vary from case to case but will include, depending on the circumstances,disciplinary action or dismissal. Where criminal activity is believed to be involved, the matter will generally be reported to the relevant authorities. Where any weakness in internal controls is identified, appropriate measures are taken to strengthen them.