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Conflicts of interest

 
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We must avoid conflicts of interests in our business dealings and be transparent if we have personal circumstances where a conflict might arise. Where there is a conflict, or a potential for one to arise, it must be managed effectively

Acting in our company’s best interests

We must avoid situations where our personal interests may, or may appear to, conflict with the interests of the Group or any Group company.

Many situations or relationships have the potential to create a conflict of interest, or the appearance of one. The most common ones are set out on the next page.

Generally speaking, a conflict of interest is a situationwhere our position or responsibilities within the Group presents an opportunity for us or someone close to us to:

  • obtain personal gain;
  • or benefit (apart from the normal rewards of employment); or
  • where there is scope for us to prefer our personal interests, or of those close to us, above our duties and responsibilities to the Group. 

A situation will appear to be a conflict of interest if it provides an opportunity for personal gain or benefit, whether or not that gain, or benefit is obtained.

A potential conflict of interest will arise if we are in a situation which could develop into an actual conflict of interest, for example if we were to change roles.

Disclosing conflicts of interest

As soon as an actual or potential conflict arises, you must disclose it in the SoBC Portal . If you do not have access to the SoBC Portal, you should disclose the situation to your line manager. 

Following your disclosure your line manager should engage with you to assess if there is any potential risk to BAT associated with the actual or potential conflict. Steps may need to be taken to manage or mitigate any identified risk which could include changes to your role or reporting line or changing your account responsibilities.

If you are a line manager and you are unsure whether the declared interest requires conditions to mitigate the risk you should seek advice from higher management or your local LEX Counsel.

Directors of Group companies must disclose conflicts to, and seek formal approval from, the board of the company at its next meeting.

Every year, we must also review, update and confirm any actual or potential conflicts of interest we may have in our annual SoBC sign-off declaration.
Whilst we may have already informed, and sought authorisation from, our line manager, we should re-disclose conflicts and potential conflicts in our annual SoBC sign-off. This is an important part of the Group‘s internal controls.

Recording conflicts of interest

Managers should ensure that any actual or potential conflicts of interest disclosed to them in the course of the year are entered into the SoBC Portal or, where employees do not have access to the SoBC Portal, notified to their local LEX Counsel or Company Secretary.

A potential conflict must be notified, even though it may seem remote, so that higher management can be made aware of the situation if necessary.

The SoBC Portal acts as Group companies’ conflict register, recording details of all actual or potential conflicts of interest disclosed to the company and how they are being managed. The register is maintained by the local LEX Counsel and monitored by the BC&C Team. It helps the Group demonstrate that it manages conflicts of interest transparently and effectively. A local conflict of interest register should be maintained by Group company’s LEX Counsel or Company Secretary for employees who do not have access to the SoBC Portal.

Family or personal relationships

You must disclose if you have any close relatives:
  • working in the Group;
  • to the best of your knowledge, working or performing services for, or having a material financial interest in, any competitor, supplier, customer or other business with which the Group has significant dealings; and
  • who are Public Officials and who occupy a role in which, individually or collectively, they could have an influence on BAT’s business.

‘Close relative’ means spouses, partners, children, parents, siblings, nephews, nieces, aunts, uncles, grandparents and grandchildren (including where arising by marriage).

Intimate relationships between employees in a direct or indirect reporting line can also lead to a conflict of interest, or the appearance of one. A direct reporting line is your manager and an indirect reporting line is all managers above your line manager up to the head of your function. If you are in such a situation, you should disclose the relationship. 

Where there is no reporting relationship, management should keep the situation under review to prevent any unfairness or undue influence arising.

If you have direct or indirect business involvement with a close relative at a customer or supplier, management may need to make changes to your role or account responsibilities.under review to prevent any unfairness or undue influence arising.

If you have direct or indirect business involvement with a close relative at a customer or supplier, management may need to make changes to your role or account responsibilities.

'Public Official' should be understood very widely, including anyone directly or indirectly employed by or acting for any government or public body/agency, or anyone performing a public function. This includes, for example people working for any national/local government or public department, body or agency (e.g. an official within a government ministry, the military, or police); people holding a public position; employees of state-owned or state-controlled enterprises (e.g. a state-owned tobacco company); employees of public international organisations; officials of a political party; candidates for public office; any member of a royal family; magistrates and judges.

It is not necessary for the individual in question to be a politician or a high-ranking decision-maker. However, they should occupy a role in which, individually or collectively, they could have an influence on BAT’s business (this would normally exclude, for example, a school teacher, prison guard, fireman, or a nurse employed by the state). If you are in any doubt on whether someone constitutes a public official, please consult with your local LEX Counsel.

In the course of your work, you should not have:
  • the ability to hire, supervise, affect terms and conditions of employment, or influence the management of close relatives
  • any business involvement with close relatives (or with any business in which your relatives work or hold a material financial interest)

Where there is a direct or indirect reporting line between two close relatives in the same Group company or business unit, management must ensure neither has managerial influence over the other.

Financial interests

You must disclose, for yourself and for any close relatives living in your household:
  • all financial interests in a competitor; and
  • any financial interest in a supplier or customer if you have any involvement in the Group’s dealing with that supplier or customer or supervise anyone who does
You do not need to disclose publicly traded mutual funds, index funds and similar pooled investments, where you have no say in what investments are included.

‘Material financial interest’ means any financial interest that may, or may appear to in the Group company’s opinion, influence your judgement.

You must not hold material financial interests in:

  • a supplier or customer if you have any involvement in the Group‘s dealings with that supplier or customer  or supervise anyone who does
  • a competitor of the Group, or any business conducting activities against the Group‘s interests

You may be permitted to retain a material financial interest in a competitor, provided that you acquired it before joining the Group, disclosed it in writing to our employing company prior to your appointment, and your employing company has not objected. Prior ownership of such an interest by a director of a Group company must be reported to its board and minuted at the next board meeting.

 If in any doubt, seek further guidance from your local LEX Counsel.

Outside employment

You must not work for or on behalf of a third party without first disclosing your intention to do so and obtaining written approval from line management. If you are a full-time employee such work must not take a significant amount of time, should not be in agreed working hours, should not impact your performance or in any way interfere with your duties and responsibility to the Group Company.  Some situations are never permissible, for example if they involve:
  • a competitor of any Group company
  • a customer or supplier you deal with in the course of your work

‘Working for or on behalf of a third party’ means taking on a second job, serving as a director or consultant, or otherwise performing services for any organisation outside the Group (including charitable or not-for-profit organisations). It does not include unpaid voluntary work you may carry out in your own time, as long as this does not interfere with your duties and responsibilities to the Group.

Corporate opportunity

You must not use information gained from your employment, or take advantage of a corporate opportunity, for your personal gain or benefit (or for those close to you), without first disclosing your intention to do so, and obtaining written approval from your line manager.

‘Corporate opportunity’ means any business opportunity which properly belongs to the Group or any Group company.

Particular care must be taken if you have access to ‘inside information’ relevant to the price of securities in any public company. See Insider dealing and market abuse for further details.

Who to talk to

Your line manager
Higher management
Your local LEX Counsel
Head of Compliance:
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