BT 2010 Annual Report Download - page 81

79BT GROUP PLC ANNUAL REPORT & FORM 20-F
REPORT OF THE DIRECTORS
Responsible business
We have had in place for over ten 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 nine
languages. During 2010, we have refreshed and reissued
The Way
We Work
and our policy on Anti-corruption and Bribery to all our
people worldwide.
We have also issued a new Gifts and Hospitality policy to our
employees. We are committed to high ethical standards and legal
compliance in all aspects of our business. We have measured our
employee awareness of
The Way We Work and the extent to which
our employees display ethical behaviour; and we are reviewing our
KPIs on ethics to reflect our policies.
Through our Sourcing with Human Dignity initiative, we seek to
ensure that working conditions throughout 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 2010
financial year, we completed 32 on-site assessments (2009: 27).
The majority of assessments were conducted in China, although we
also conducted assessments in Hungary, India, Malaysia, South
Korea, Tunisia, the UK and the US. We now employ our own
assessor based in Shanghai, which has enabled us to focus our
efforts on suppliers in China. We work with our suppliers to help
them improve their performance. In 2010, 86% of our suppliers
agreed that we work with them to ensure our purchases are made,
delivered, used and disposed of in a socially and environmentally
responsible manner.
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 Undertakings code of practice (
It matters )
forms part of our statement of business practice and is consistent
with it.
We are committed to managing our environmental performance.
BT’s environment management system within the UK has been
certified to the international standard ISO 14001 since 1999. Since
then we have extended our certification to include Belgium,
Ireland, Germany and the Netherlands. BT has its own ISO 14001
certification and BT Spain is certified.
A Board committee – the
Committee for Responsible and
Sustainable Business
– chaired by Sir Michael Rake and comprising
representatives from BT businesses, two non-executive directors
and three independent members oversees our corporate
responsibility, environment and community activities, including
charitable expenditure and the strategy for maximising our
contribution to society. More information is available in Review of
the year – Our corporate responsibility on page 34. The Report of
the Committee for responsible and sustainable business is on
page 65.
Political donations
Our continuing policy is that no company in the group will make
contributions in cash or kind to any political party, whether by gift
or loan. However, the definition of political donations used in the
Companies Act 2006 (the 2006 Act) is very much broader than the
sense in which these words are ordinarily used. It may cover
activities such as making MPs and others in the political world
BUSINESS POLICIES
ADDITIONAL INFORMATION FINANCIAL STATEMENTS CORPORATE GOVERNANCE REVIEW OF THE YEAR OVERVIEW
aware of key industry issues and matters affecting the company,
which make an important contribution to their understanding of
BT. These activities have been 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 continues
to act within the provisions of the 2006 Act requiring companies to
obtain shareholder authority before they can make donations to EU
political parties and/or political organisations as defined in the
2006 Act. During 2010, the company’s wholly-owned subsidiary,
British Telecommunications plc, made the following payments
totalling £14,952 (2009: £17,658) to cover, for example, the cost
of hosting briefing meetings with MPs and MEPs about the
company’s activities: Labour Party £5,333; Conservative Party
£3,793; Liberal Democrats £3,333; Scottish National Party £2,493.
No loans were made to any political party by any company in the
BT group.
Pension funds
BT’s two main UK pension arrangements – the BTPS and the
BT Retirement Saving Scheme (BTRSS) – are not controlled by the
Board but by a separate and independent corporate trustee for the
BTPS and a management committee for the BTRSS. The trustee of
the BTPS looks after the assets of the funds, which are held
separately from those of the company. For BTRSS members, each
member has an individual personal pension secured with an
insurance company (Standard Life). Pension funds’ assets can be
used only in accordance with their respective rules and for no other
purpose.
Financial statements
So far as each of the directors is aware, there is no relevant
information that has not been disclosed to the 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 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 on page 84. The directors’ statement on going
concern is included in Review of the year – Financial review on
page 54.
Takeover Directive disclosure
Following the implementation of the EU Takeover Directive by
certain provisions of the 2006 Act, we are required to make
additional disclosures. A number of these disclosures can be found
elsewhere in this Report as set out below:
structure of BT’s share capital (refer to page 123) including the
rights and obligations attaching to the shares (refer to pages 161
to 164);
restrictions on the transfer of BT shares and voting rights (refer to
pages 161 and 162);
significant direct or indirect shareholdings (refer to page 82); and
appointment and replacement of directors (refer to page 163).
The disclosures which are not covered elsewhere in this Report
include the following:
BT has two employee share ownership trusts which hold BT
shares for the purpose of satisfying awards made under the
various employee share plans. The trustee of the BT Group ESIP