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January 1978
CAC III LEEDS CASTLE
5114 TOPICS SUGGESTED BY DELEGATES
"I would like to suggest that there should be a general review
by SAT and an opportunity for a brief report from each member
company!.
3 S 2. 'Updating re International Committee on S S H".
B 3. 'The Roper Report is updated every second year and it is our
understanding that it will be done again in 1978. If so, we
would propose this report be added to the agenda*.
B 4. 61 believe an up-to-date report -on the effect of the American
Cancer Society Target 5 Program would be an appropriate
addition to the program as well as an update on other important
anti-smoking organizational Lufforts!.
0 a 6 5. Response to- new forms of league tables (including carbon
,,.ocP monoxide etc.)'.
6 a W 6. 'Plavour developmenO.
17 OR & D Information and Recommendations'.
6 0 M S. "Rationalization of R & D S & H Program (in terms of
purpose and benefits)".
9. "Decision on a Group Research Programme after preparatory
VW-- work by the R & D working group".
90, 1MR1119
6 6 5 10. "What shall or can the Group do in order to combat the
r
"', krt - increasing social disapprobation of smoking"
S-t-fl- 11. 'Scientific exploration of the beneficial effects of smoking".
,;.4 %Vt
-9 9-W 12. "Social Acceptability of Smoking
Although the Smoking and Health issue is in its infancy in
Brazil, one is left with a feeling from two previous CACs
that the social pressures against the smoking habit represent
the most serious issue faced by the industry.
A, At the same time, industry responses sound increasingly
defensive and unconvincing, leaving the feeling that a
comprehensive policy on this issue has not been formulated.
Can there be An overall Group policy on the subject bearing
in mind the regional and environmental differences that
exis@X.bstween its component parts? Perhaps the matter is C)
wort debating'.
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2.
V-" 13. "In this country, and we assume in others, many consumer
products are beginning to come under the same type of attacks
which leveled at tobacco products going back many years.
Advertising restrictions, warning notices, and other
restrictive measures are now being proposed for candy products
breakfast cereals, 'fast' food items, soft drinks, alcoholic V
beverages, etc. Do these growing developments afford an
opportunity for our industry to join forces with the producers
of these products in common efforts to reduce these pressures?'.
9 &-mg 14. "The trend towards consumer concern products has accelerated
in the United States and other parts of the world, and we
anticipate that this trend will continue. Should we, as a
Group, assume a leading role and become more aggressive in
promoting these products? We are not, of course, suggesting
that we violate any laws or governmental regulations which
expressly prohibit such promotions. If the answer is lyesg , is
there a need, on a Group basis, to have a product strategy
policy which goes beyond 'lower tar', 'lower gas'?".
Item F ACQUISITION STRATEGY
01 believe a great deal of analytical work is presently under
way at Millbank in the area of future diversification/acquLsition
planning. At the same time we are in the initial stages of
developing a capability in this same field. There appears to be a
need for establishing channels of communication through which
coordination of these efforts can be effected within established
guidelines. As an example, are the views being developed at
Millbank of the future of retailing consistent with the work which
is being done here in this same area? I am suggesting some form
and structure be given to communication at the level of the
planners and analysts on a programmed basis, Again, we would
welcome discussion of this issue".
Item H ATTITUDES TOWARDS & CONSTRAINTS ON MNCs
'The acceptability of Fcreign Control and Future Attitudes to
I Vp;w4 Multinationals - five to ten years hence".
Item I CORPORATE RELATIONS 11
L OPUBLIC RELATIONS
in dealing with the Press and brokers, who more and more appear
to be travelling between countries or establishing contact
internationally over the telephone, they show concern primarily
for the UK, Germany, Brazil and the United States activities.
Often they are expecting us to volunteer some positive statement
on matters we feel deserve emphasis. Should there be a tatements
to co-ordinate and communicate the points appropriate for emphasis
so that all parties can act in concert".
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;Under corporate relations it appears to me to be sensible to
iscuss how and in which sectors we could help each other or even
lr4lus.v- undertake joint action".
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BAT Industries document for Province of British Columbia 22 April 1999

3
Item J ORGANISATIbN
0,@f 'The 'Role and modus operandi of SAT Industries' embraces a
number of questions such as:-
(a) What are the objectives of BAT Industries?
(b) What contribution can BAT Industries per se make
to the success of companies in the family (i.e. associates
as well as subsidiaries)?
(c) Is there a real contribution that Divisions (and individual
companies within them) can make to the greater success of
the Group other than by concentrating on achieving their own
success?
(d) Is BAT Industries within itself and in its relations with
operating companies most effectively structured to meet the
answers to (a) , (b) and (c) above?
Part of the role of a Divisional H. Q. is to be a centre for the
exchange of experience and Ideas and to be a catalyst for change
within its industry, perhaps BAT Industries has a similar part
to play in respect of the general conduct of business; certainly
Chelwood is an example. Are there others?
topics A move of BAT Industries away from Millbank must sharpen our
minds to what we should be doing and how.
I see the subject including the roles of B & W Industries and
Interversa and the pros and cons of a BAT North America. It
could compreh nd the question of chi ging BAT's year-end, but
this is more : technical subject.
'it might be instructive and valuable to hear how one of our
associates', as distinct from subsidiary, companies sees the
development of relationships in the Group so as to make it
_A@ interesting for them to be a continuing part of it and not
simply responding to the interests of a single large shareholder*.
"The Role,korganisation of the Centre -
Five to Ten Years Hence.
a) The growing sophistication and competenci in the various
operating companies.
b) The cost of maintaining the Centre in its present form.
c) The valuable role of the Centre in acting as a catalyst,
an example of which would be its stance on 'Productivity'.
d) The need to maintain the identity of the BAT Group as a
family of companies.
e) The flow of information through and to the Centre and between
operating units.
f) The on-going need for certain specialist and advisory services
R etc.
g) The constant need for personal contact and discussion at all
levels.
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BAT Industries document for Province of British Columbia 22 April 1999

4
nancial coordination. The maximisation of profits
world money management.
n
t!l
rate Organization
During a reappraisal of our diversification strategy, we
identified a requirement to establish a corporate organization
capable of examining investment opportunities, implementing
approved investment and acquisition plans and monitori
progress-of oeeratinq subsidi and associated compan
pro Ms a-riser not least in the areas or at
Lng and management development, when moving into
sif ication from a base of a rapidly growing and p
ious cigarette divial
All companies represented at the Conference, and particularly BAT#.'
have experience of diversifying frcm a tobacco base, and have
po sibly followed different paths in organizational design.
While it is probable that there is no single correct path, an
exchange of experiences might be of value to everyone!'.
*Divisional Organisation - Whilst the existing four Divisions
are well accepted in the UK, the
Organisation is neither understood nor
applied in some countries overseas,
especially where the resources
available (money and people) emanate
frcm the major Tobacco companies'.
"Corporate 2b
jtctives
(a) What are our corporate objectives for the Group as a whole?
(b) How are these corporate objectives related to operational
objectives?
(c) How should financial objectives be expressed and established
in order to maintain corporate and operational objectives
in harmony?*.
-Role of the Centre
(a) What is the role of the Centre in the framework of corporate
and operational objectives? Are there any limits to delegation?
(b) Do any specific policy guidelines need to be established by
the Centre?
(c) What functions and activities are needed at the Centre in
order to reconcile the concept of divisional responsibility
for operations with central responsibility for the achievement
of corporate and f inancial objectives?'.
(V4,W "Management Structure
C:)
(a) Does the existing Divisional structure allocate Management
priorities in proper proportion to the allocation of 00
resources? Is there a better way of grouping operational
units to achieve corporate objectives? Are there too many
decision taking levels between operations and the Centre?-
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5
(b) Should a clearer distinction be made between operating
subsidiaries and associated companies which are not
subsidiaries?
(c) Is there a case for introducing more flexible divisional
arrangements based on a matrix Organisation which recognises
geographical priorities over industry/product divisions in
the territories of major importance to -the Group? What
influence should industry/product boards have in relation
to autonomous geographical divisions?
nsibilities, roles, structure, composition and func
ards in the future'.
wAs an ad ould merely like to mentio
roblem of the name of the holding companies. We still
t as a handicap that the holdings have different names from
ntry to country. It may well be that some countries do not
eel they can answer for or do not wish further change. it
hou ld, in my opinion, then be discussed whether at least the
onnection can be indicated by a uniform emblem as is practically
e case with the current B.A.T. leaf emblem".
item K 1. 'The companies represented are all multi-industry holding
companies. Should we not consider the type of executive
and his career development and experience that would make a
man fit for a directorship in such an enterprise'.
2. "Management Succession Planning. Can this be adopted on a
'droup-wide basis? How formal is it? Are there significant
differences in technique used throughout the Group? Should
we be considering on a Group basis further training for
selected individuals, either in the form of higher degrees
or the opportunity to work and study with associated companies
overseas?'.
3. 'The Role of Chelwood in our Training Programmes. Is it
fulfilling the role set down for it? Are iFs facilities
adequate? Should the content be more management technique
orientated with less emphasis on in-house input?'.
4. wStaff Planning and Management Development.
These aspects of managing the business become increasingly
complex in Souza Cruz as the company grows and becomes more
diverse in nature. We now believe that our methods of staff
planning, although containing several valuable elements, are not
sufficiently coordinated into one total system to cope with
the problem.
If we find difficulty in this area, staff planning for the
Group must be substantially more complex as geographical
difficulties are added to those of size and diversity.
C)
This may be an area where an exchange of ideas could be of
value".
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6.
S. "The subject of the exchange of managers between major
Group companies was discussed at Hot Springs. There has
been disappointing progress in this respect and maybe it
would be worth airing the subject again'.
6. "The Future Prospects of Boards of Directors
'Especially important ii the question of how we can secure
S
independence and quality of Board members!.
.7. 'Manager Education
It in a subject of considerable importance and discussin
would, I think, greatly help to stimulate effective acti
within the companies to ensure that education is not mer
talked about but actually provided. Insofar as it cover
preparation of future directors of our companies it is I
into the general subject of The Future Prospects of Boar
of Directors'.
S. Training and'international exposure coordination of
secondments, etc
3
Item N 1. "Pla@ning' is nor formalized and stru@ured to a greater degret
than ever before. Primarily because the nature -of our various
businesses require a variety of planning cycles which we are
attempting to match with our own December 31 year end and
BAT's September 30 year end, we find ourselves in a
Oprocrusteano ben, alternately shrinking and stretching to
meet the Group objectives.
For example, when we were recently requested to review 1978
plans with the-purpose in mind of ircreasing profits, we foun
ourselves, in the case of the retailing businesses, with the
spring season (first half of new year) virtually committed,
and in the instance of BAT's year end, we are presently in
the-midst of the fall season. A
Recognizing the complexities of any alteration and its impact,
on shareholders as well as other associated companies, the
question is the feasibility of seeking a financial year thae
note nearly fits everyone's needs. while we prefer a
.calendar year, we would be willing to analyze the tax ef
.of a EWI chan;e to minimize any adverse financial consequer
if such change appears appropriate for the rest of the Grol,
We would welcome an ultimate resolution of this problem!.
2. "I have recently received further requests for a change in
the Group year-end to bring it in line with the calendar ye
- Would this be a suitable' opportunity to discuss this mattei
- Even if the Group cannot change, would individual companie!
be allowed to change if they were ablfi to do so'.
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BAT Industries document for Province of British Columbia 22 April 1999