BT 2007 Annual Report Download - page 71

BUSINESS POLICIES
Responsible business
To reinforce our commitment to achieve best practice in our
standards of business integrity and ethics, we have had in place
for nearly eight years a written statement of business practice
(The Way We Work). This covers all our operations and applies
worldwide to all employees, and to all agents and contractors
when representing BT, and is available in eight languages. A
copy has been sent to every employee and copies are also sent
to the employees of newly-acquired subsidiaries.
We measure our performance against these principles through
our Ethics Performance Measure (EPM), one of our key CSR key
performance indicators. The EPM comprises a measure of
employee awareness of The Way We Work, our ranking in an
external benchmarking of a selection of FTSE-100 companies
and the results of a survey on the extent to which employees
consider our activities ethical. In the 2007 financial year, the
EPM was 84%.
Global sourcing, a key aspect of which is managing a complex
global supply chain, is increasingly important to BT. Through our
Sourcing with Human Dignity initiative, we seek to ensure that
working conditions in our supply chain meet internationally
recognised human rights standards. We investigate potential
social and environmental shortcomings and are committed to
achieving 100% follow-up within three months for all suppliers
identified as high- or medium-risk. During the 2007 financial
year, we conducted 413 risk assessments. We also conduct a
survey every two years to establish the effectiveness of our
relationships with suppliers. The next survey will be carried out
in the 2008 financial year.
During the 2007 financial year, we put increased emphasis on
the environmental aspects of our supply chain by introducing
new procurement principles covering the energy consumption
and environmental impacts of products and services from
manufacture through usage and including disposal. In the 2008
financial year, we will be focusing on the implementation of
these principles.
The high-level principles in The Way We Work are supported
by a continuing and comprehensive communications programme
and on-line training. A confidential helpline and dedicated e-
mail facility are also available to employees who have questions
about the application of these principles. The helpline number is
also published externally. BT’s new Undertakings code of
practice (It matters) forms part of our statement of business
practice and is consistent with it.
A Board committee – the Community Support Committee,
chaired by Sir Christopher Bland and comprising representatives
from BT businesses, three non-executive directors and an
independent member – oversees our community investment
activities including charitable and arts expenditure and the
strategy for maximising our contribution to society.
An executive committee, the Corporate Social Responsibility
Steering Group, oversees the implementation of our CSR strategy
and programme. This includes risk assessment, setting of targets
and objectives, and public accountability. BT also takes advice
from an external independent panel of CSR experts. More
information, including details of charitable donations made by
the group, is available in Business review – Our commitment to
society.
Political donations
The company’s continuing policy is that no company in the
group shall make contributions in cash or kind to any political
party, whether by gift or loan. Arrangements are in place to
implement this policy. However, the definition of political
donations used in the Companies Act 1985 is very much broader
than the sense in which these words are ordinarily used. It
covers activities such as making MPs and others in the political
world aware of key industry issues and matters affecting the
company, which make an important contribution to their
understanding of BT. These activities are carried out on an even-
handed basis related broadly to the major UK political parties’
electoral strength. The authority we are requesting at the AGM
is not designed to change the above policy. It will, however,
ensure that BT acts within the provisions of the Companies Act
1985 (the Act) requiring companies to obtain shareholder
authority before they can make donations to EU political
organisations (which includes UK political parties) as defined in
the Act. During the 2007 financial year the company’s wholly-
owned subsidiary, British Telecommunications plc, made the
following payments to cover the cost of hosting briefing
meetings with MPs and MEPs about the company’s activities:
Labour Party £3,953; Conservative Party £5,710; Liberal
Democrats £4,444; Scottish National Party £3,500; Plaid Cymru
£785. No loans were made to any political party by any
company in the BT group.
Pension funds
BT’s two main pension funds – the BT Pension Scheme and the
BT Retirement Plan – are not controlled by the Board but by
separate and independent trustees. The trustees look after the
assets of the funds, which are held separately from those of the
company. The pension funds’ assets can be used only in
accordance with their respective rules and for no other purpose.
Payment of suppliers
BT subscribes to the Better Payment Practice Code for all
suppliers, the four principles of which are: to agree payment
terms at the outset and stick to them; to explain payment
procedures to suppliers; to pay bills in accordance with any
contract agreed with the supplier or as required by law; and to
tell suppliers without delay when an invoice is contested and
settle disputes quickly. Details of this code can be found at
www.payontime.co.uk BT’s normal payment terms are 42
calendar days from date of receipt of a due and valid invoice. BT
will make payment to the supplier on the next payment run
following expiry of this term. The ratio, expressed in days,
between the amounts invoiced to the company by its suppliers
in the 2007 financial year and the amounts owed to its trade
creditors at the end of the year was 44 calendar days.
Financial statements
So far as each of the directors is aware, there is no relevant
information that has not been disclosed to the company’s
auditors and each of the directors believes that all steps have
been taken that ought to have been taken to make them aware
of any relevant audit information and to establish that the
company’s auditors have been made aware of that information.
A statement by the directors of their responsibilities for
preparing the financial statements is included in the Statement
of directors’ responsibility. The directors’ statement on going
concern is included in Financial review – Capital resources.
Financial instruments
Details of the financial risk management objectives and policies
of the group and exposure to interest risk, credit risk, liquidity
risk and price risk are given on page 45 and note 33 on pages
126 to 133.
Report of the Directors Corporate governance
70 BT Group plc Annual Report & Form 20-F