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Conflicts of interest

 
 

Conflicts of interest

We must avoid conflicts of interest in our business dealings and be transparent if we have personal circumstances where a conflict might arise. To conduct our business with integrity, conflicts of interest 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. The most common types of conflicts are set out here.

Generally speaking, a conflict of interest is a situation where 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 the interests of those close to us, above our duties and responsibilities to the Group.

 

Disclosing conflicts of interest

When first joining BAT or as soon as a conflict arises, you must disclose the conflict in the SoBC Portal . If you do not have access to the SoBC Portal, you should disclose the situation to your line manager.

If a situation might appear to others to create a conflict of interest but you do not believe that a conflict in fact exists, you should disclose it anyway. The appearance of a conflict of interest can create concerns, even where a conflict may not exist. When in doubt, you should err on the side of disclosure, so that higher management can be made aware of the situation if necessary.

Following disclosure, your line manager should engage with you to assess if there is any potential risk to BAT associated with the  conflict and if any steps may need to be taken to manage or mitigate any identified risk.

In some instances, any risk to BAT’s interests may be so remote that no steps need to be taken.

However, if BAT’s interests could be negatively impacted by the conflict, conditions may need to be applied. This could include changes to your role or reporting line or your account responsibilities, or a requirement that you abstain from dealings with a particular customer, supplier or BAT employee.

If you are a line manager and you are unsure whether the declared interest requires conditions to mitigate the risk, you should read Conflicts of Interest: A Guide for Line Managers, and if you are still unsure 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.

We must also regularly review, update and confirm any conflicts of interest we may have.

 

Recording conflicts of interest

Managers should ensure that any conflicts of interest disclosed to them 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.

What follows are some of the more common types of conflicts of interest. However, other situations could create conflicts of interest also. If you have any questions about whether your particular situation creates a conflict of interest, please talk with your line manager or LEX Counsel.

 

Family or personal relationships

Working with Close Relatives can create conflicts of interest, whether the Close Relative is also an employee of the Group, works for one of our competitors or business partners, or is a Public Official who could impact BAT’s business.

You must disclose if you have any Close Relatives working in the Group. Intimate relationships with others who work at BAT can also lead to a conflict of interest, or the appearance of one. If you are in such a situation, you should disclose the relationship.

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 or those with whom you are in an intimate relationship. Your manager will work with you to determine what mitigation steps should be put in place in light of your particular situation.

It will never be acceptable for a line manager and a report to be Close Relatives, or in an intimate relationship.

You must also disclose if you are in an intimate relationship with, or have any Close Relatives who, to the best of your knowledge, work or perform services for, or have a material financial interest in, any competitor, supplier, customer or other business with which the Group has significant dealings.

If you have business involvement with a Close Relative at a customer or supplier or with any business in which your Close Relative holds a material financial interest, management may need to make changes to your role or account responsibilities.

You must also disclose if you have any Close Relatives who are Public Officials and who occupy a role in which, they could have an influence on BAT’s business.

It is not necessary for the individual in question to be a high-ranking decision-maker. You should disclose if the Public Official has a role in which 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 as to whether disclosure is necessary, please consult with your local LEX Counsel.

 

Financial interests

You must disclose, for yourself and for any Close Relatives living in your household:
  • all financial interests in a competitor
  • 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 your 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, you may not work for a competitor of any Group company or 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.

 

Other types of conflicts of interest

While these examples set out the most common types of conflicts of interest, conflicts can arise in a variety of other situations. For example, a conflict can arise when community investments (including charitable contributions) are made by the Group to an organisation with which you have close ties, or when you seek to take business opportunities for your own personal benefit, which you became aware of through your work for BAT.

The key question to ask is whether your personal interests or those of a Close Relative could conflict with your duty to act in BAT’s best interests. If your judgement or decision making on behalf of BAT could be impacted by the personal interest, you should disclose the interest.

 

When first joining BAT or as soon as a conflict arises, you must disclose the conflict in the SoBC Portal. If you do not have access to the SoBC Portal, you should disclose the situation to your line manager

 

Who to talk to

  • Your line manager
  • Higher management
  • Your local LEX Counsel
  • Head of Compliance: sobc@bat.com