BATCo document for Province of British Columbia 23
April 1999
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1995 KEY AREA PAPER: CORPORATE AFFAIRS
1. Corporate Image
2. External Relations
3. Media
4. Marketing Restrictions
5. Packaging
6. Pressure Groups
7. Communication and Co-operation
8. Training and Development of Corporate Affairs
Staff
9. National Manufactu= Associations
10. Internal Communications
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BATCo document for Province of BritiSh Columbia 23
April 1999


JXEYAREA PAPER CORPORATE AFFAIRS
CORPORATE VNIAGE
BACKGROUND
A company's corporate image is a valuable asset.
From a commercial perspective, the
benefits of a good image and reputation within
local and national communities are
becoming increasingly apparent. The products cfa
company with a good corporate
image are often more attractive to consumers.
Access can be easier to decision makers
and opinion formers, the company can become more
attractive in terms of recruitment
and it is more difficult for legislators to enact
harsh regulations affecting companies
which have the support of local and national
communities.
With the changing political climate, there are
increasing opportunities for international
businesses in many new markets around the world. A
strong corporate image can
assist with the export of products and setting up
joint ventures in new countries.
International companies and industries are often
criticised for their activities and
behaviour in many parts of the world. Much of the
criticism is politically motivated,
particularly by those opposed to the free
enterprise system. Critics argue that the
interests and objectives of international business
are incompatible with the interests and
weil-being of national communities.
While this is not true, these views receive wide
coverage and have a considerable
number of subscribers. They are certainly used by
the anti-smoking lobbv to attack
both the tobacco industry and companies in the BAT
group.
A good corporate image and reputation is judged on
many factors including financial
performance, corporate behaviour and ethical
practices, community involvement and
contribution and environmental awareness and
sensitivity.
It is therefore important that operating companies
implement programmes to develop
and promote agood corporate image for themselves
and the group and that all steps
are taken to ensure that the company enjoys a good
corporate reputation.
POLICY
Companies should have a cD-ordinated programme to
establish and maintain their
cor-pcrate image and reputation.
As part of their corporate image programmes.
companies should associate themselves
with British-American Tobacco Company on
stationery, including the BATCo logo, in
accordance with the corporate identity guidelines.
General communications should
refer to being part ofthe BAT group, e.g., total
group volume should be quoted rather
than BATCo's and group operations should refer to
North America, all ofEurope and
Latin America, although reference should not be
made to BAT Industries as such. The
generic term BAT will be the communication
reference.
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BATCo document for Province of BritiSh Columbia 23
April 1999


KEY AREA PAPER CORPORATE AFFAIRS
Corporate imaste.reputation should be assessed
regularly and programmes adjusted to
take account of changing opinions and attitudes.
OBJF_C`r1VES
The overall objective ofcorporate imagelreputation
programmes should be to achieve
the highest reputation within the industry sector
among key target audiences to ensure
community support for the company's business
objectives and activities and to assist in
gaining competitive advantage.
BAT should be positioned as the paceserter in the
following areas:
~ Financial management and profit performance
~ Ethical standards
~ Marketing standards and practices
~ Product quality
~ Customer relations
~ Environmental practices
~ Employment practices
~ Community contribution
~ Corporate identification
Programmes and action should address:
Financial standing - to ensure that: the company
is able to ma)dmJise the
benefits and the commercial advantage of financial
credibility through
favourable banking terms, preferred terms with
suppiieM etc; government
recognises the economic contribution and views of
the company when
determining policy; the company enjoys a fair
share price
Ethical Standards - to ensure that: the group's
strict standards regarding
observance oflocal laws and customs. payments
oftaxes and charges are
observed; that proper and fair relationships are
observed with distributors,
suppliers, farmers, etc and in the conduct of
relations with elected and
government officials
Marketing Standards and practices - to ensure that
the company's code of
marketing practice is observed and that the
company operates within local laws
and voluntary agreements.
Product quality - to ensure that the company is
able to gain competitive
advantage through the marketing of superior
quality products and that all
communic3tions material is of the highest quality
standards.
Customer relations - to ensure that customer
enquiries are handled efficiently
and quickly and that the company demons-,rates
care and concern to achieve
customer satisfaction.
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BATCo document for Province of BritiSh Columbia 23
April 1999


KEY A REA PAPER CORPORATE AFFAIRS
Environmental Practices - to ensure that strict
standards are observed in
relation to disposal of waste, recycling,
utilisation of local resources and other
issues, set out separately in BA7s environmental
policy and that due
recognition is sought on appropriate occasions
Employment practices - to ensure strict observance
and due recognition of
employment policies and conditions and safety
standards and that management
quality and employee opporiunities are
communicated and understood
Community contribution - to ensure that community
programmes respond to
the needs and aspirations oflocal and national
communities and are relevant to
local development needs. Programmes should be
selected from one ofthe
follovAing four areas so that BAT is recognised as
a consistent supporter of
specific initiatives:
health
environment
culture
business development
Corpor-Ate identiric2tion - to ensure that all
visual identification such as logo,
letterhead and stationery, signage, vehicles
comply with BA"rs corporate
identity rules to achieve consistent corporate
ident1fication. Where
appropriate, ccmparues should seek to associate
the company with the brands.
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BATCo document for Province of British Columbia 23
April 1999


KEYAREAPAPER CORPORATE AFFAIRS
EXTERNAL RELATIONS
BACKGROUND
The free enterprise system is now a world wide
phenomenon, however that freedom is
qualified and under great pressure. Increasingly,
communities are demanding that
international corporations justify their franchise
to do business. Companies such as
BATCo must not ordy be good world citizens, they
must demonstrate and communicate
that this is so-
POLICY
It is BATCo policy that systematic pro-active
programmes of regular contact with
government officials, pofiticians and ministers on
matters ofmutual interest be pursued.
Contact programmes should also be carried out with
appropriate international bodies,
such as the World Bank and World Trade
Organisation. Audiences should be made
aware of the company's positive contribution to
the national economy. Assistance will
not be forthcoming ifa company approaches a
potential helper only when problems
arise. Sysremaizc contact should also be
maintained with other key audiences whose
goodwill and co-operation can help companies
achieve their business objectives. These
groups can include, for example, employees,
suppliers, customers/smokers, the trade,
local community leaders, leaders of the financial
sector, competition, politicians, the
public, tobacco growers, advertising agencies and
business leaders.
Steps should be taken to ensure thzt non-executive
directors are given the opportunity
to play a full and appropriate role in
relationships with government and other
appropriate audiences
This poky should be read in conjunction with the
Key Area Paper on Smoking and
Health - Communication.
OBJECTIVE
The objective ofexternal relations' activity is to
ensure that the full support of key
audiences is enlisted. In this way a company will
help itselfto sharpen its competitive
edge and maintain the freedom to conduct its
business in a responsible manner.
BATCo's business contributions and practices
should be recognised to be of a high
standird and not open to criticism.
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BATCo document for Province of BritiSh Columbia 23
April 1999


KEY AREA PAPER CORPORATE AFFAIRS
THE MEDIA
BACKGROUND
As major employers and contributors to the
economy, BATCo companies and
operations are the subject of legitimate interest
by the media. Dealing with the media
can have a significant impact on the company's
business. Relations with press, radio and
television are an important mean of developing
corporate reputation and mishandled
can have a significant negative impact on the
company.
POLICY
It is BATCo's policy to be open and honest in all
its dealings with the media and to
conduct systematic, pro-acirve media relations
programmes to promote the company
a responsible business. Media relations' plans
should be developed and revised annuafly,
to include key journalists to contact, subjects
and messages to cornmunicate and
programmes for regular contact.
Compan~ies should nominate a media spokesman who
should receive regular issues and
media training and is the only person in the
company, apart from the No 1, who is
authorised to talk to the media.
When company spokesmen are dealing with commercial
issues affecting the local
business, information made available should be
cleared with the No 1. When providing
commercial and financial information, close
attention should be paid to local laws, stock
exchange rules, etc.
Opportunities for general comment on all smoking
issues should be carefully reviewed
and pursued if it is considered that the company's
views can be adequately represented.
This should be %krith the agreement of the No 1.
When discussing any smoking and
health issues, spokesmen should be aware of
product bability impUcations and scientific
accuracy and should Uly understand the company's
stance.
Corporate Affairs Department, Millbank, should be
kept informed of significant media
contact and coverage which may have international
or damaging local impaci and should
be consulted if there is any doubt about handling
any specific contacts.
OBJECTIVES
Media relations programmes should contribute to
the achievement of corporate
objectives by ensuring that the company is well
known and hieNy regarded by its key
audiences.
A more detailed paper - Guidelines for Dealing
with the Media - has been circulated by
Corporate Aftrs Department, Millbank.
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BATCo document for Province of BritiSh Columbia 23
April 1999


KEY AREA PAPER CORPORA TE AFFAIRS
MARKETING RESTRICTIONS
BACKGROUND
In response to recommendations from WHO and a
number ofintemational pressure
groups, governments are introducing a wide range
of restrictions on marketing activities
relating to tobacco. These include restrictions or
bans on advertising in some or alI
media, on brand sponsorship, particularly
ofsports, and on trademark diversification
activities. It is often stated that such
restrictions are aimed at the 'protection' of
young
people from the influence oftobacco advertising
and sponsorship. However, major
studies and experiences in various markets clearly
demonstrate that advertising or
sponsorship is not significant in influencing
young people to begin smoking, or that
advertising or sponsorship bans have any
demonstrable effiect on the overall
consumption oftobacco.
POLICY
It is BATCo policy to protect marketing freedoms
in all instances. Wherever possible,
negotiated voluntary codes are to be preferred to
legislation, and companies should
consider adopting such codes throughout the
industry in their country, where they do
not already exist, in the hope of pre-empting
legislation.
OBJECTIVES
To preserve the right ofcompanies to advertise and
market their products within socially
acceptable standards and practices.
To preserve their ability to inform their
consumers of product developments and
innovations
To ensure that companies are able to compete and
increase their market share-
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BATCo document for Province of BritiSh Columbia 23
April 1999


KEY AREA PAPER CORPORATE AFFAIRS
PACK-AGING
BACKGROUND
For many years, health warnings have appeared on
cigarette packets in some markets
and in others they have not. In particular, health
warnings have been required by
govemments in most OECD nations and it is the
perception ofthe company that, in
these countries at least, there is a community
expectation that all cigarette packets
should contain a warning ofsome kind. As a
responsible rr=ufacrurer, BATCo believes
it should respond to those expectations and apply
a health warning to all products it
makes.
Moves have also been made 'in some markets to
force manufa=rers to sell cigarettes in
plain or generic packs.
In many countries health wamings are also included
in advertising either as a result of
legislation or industry agreement.
POLICY
It is BATCo policy to comply with any national
requirement to place health warnings on
cigarette packaging and in advertising-
In most cases warnings are required by government
and should therefore contain an
attribution to the government.
In cases where there is no requirement or
agreement, health warnings should be included
on packaging but not in advertising (guidelines
for the application ofhealth wmings
where no government requirement exists are
circulated separately).
Piaorial wamings, and those occupying a major pack
face or faces (front and back) or a
disproportionately large area ofadvertising space,
should be resisted, as should moves
to plain or generic packs. Every effort should be
made to protci= the integrity ofthe
company's packs and trade marks.
OBTECTWES
To minim~ise the damage to the Group's most
valuable assets, trade marks, pack designs,
To neutralise the controversy over pack warning
labels,
To minimise the disruption to advertising
communications.
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BATCo document for Province of BritiSh Columbia 23
April 1999


KEY AREA PAPER CORPORATE AFFAIRS
PRESSURE GROUPS
BACKGROUND
International issues including tobacco, have
become politicised such that pressure
groups are sometimes regarded is political
groupings. Many are well estabfished,
employing full time staff. A bureaucracy has
arisen with an international career structure
and world wide information networks. It is most
important that the professional nanire
of pressure groups and their motivations be fully
understood. Because of its business,
size and international character, BAT is a special
target.
The key strategy of znti-tobacco pressure groups
is to persuade governrnents to
introduce legislation to ban advertisin& reduce
tar/nicotine levels, increase taxation, to
ban smoking in public and to force crop
substitutiorL By thm means pressure groups
hope to achieve their objective of eliminating
tobacco smoking.
Most anti-tobacco pressure groups are linked with
the WHO and affiliated agencies.
They include the International Union Against
Cancer (UICC), the Imernadonal
Organisation of Consumer Unions (10CU). Action on
Smoking and Health (ASH) and
many others, who are either regional or national.
Companies should be aware that pressure group
campaigns will often include:
public meetings
anti-tobacco media activity
defacement of advertisements
'smears' against individual tobacco company
executives
action at company AGMs
attempts to influence company shareholders
lobbying politicians
POLICY
BATCo policy is to pre-empt the attacks of
adversaries through a review of plans and
allegations of pressure groups and to engage them
when it is in the interests of the
operating company to do so. Where an attack is
directed specifically at BATCo, the
operating company should co-ordinate and lead the
defence of the company. Otherwise
pressure groups should be dealt with via the
national manufacrurers'association, but if
necessary, the operating company can take a
leading role-
OBJECTIVE
To further business objectives by the continued
defence and protection of the company's
interests and reputation.
To ensure balance and fairness to the debate.
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BATCo document for Province of British Columbia 23
April 1999


IKEYAREAPAPER CORPORATE AFFAIRS
COMMUNICATION AND CO-OPERATION
BACKGROUND
The issues affecting the international tobacco
business are now globalised. The global
anfi-tobacco policies of the WHO and its executive
ancillaries are being implemented on
a regional basis. The WHO activity is administered
from regional centres in New Delhi~
Manila, Bra=avifle, Washington DC, Copenhagen and
Alexandria. Over the next few
years, the regional structure ofthe industrys
opponents is expected to be strengthened.
Regional trading blocics exist in some parts ofthe
world and necessitate a regional
approach to public issues management.
In the BATCo group, companies have considerable
experience in dealing with WHO's
smoking and health strategies, and also with
criticism ofinternational businesses.
POLICY
A regional as weU as in international view should
be taken of the issues affecting a
company's business. The strategies ofWHO and
pressure groups should be monitored.
Strategies on smoking issues adopted by BATCo
companies should be mindful ofother
regional activities. Knowledge and experience
should be efficiently communicated
among BATCo companies within the region and to
Millbank so that all can benefit.
Regional issues and communications should be
managed through the Public Affairs
managers in the Corporate Affairs department,
Millbank
OBJ,F-CTrVE
To maxirnise communication and cooperation on
public issues amongst companies and
business units in regions covered by RBUs.
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BATCo document for Province of BritiSh Columbia 23
April 1999


KEY AREA PAPER CORPORATE AFFAIRS
TRAINING AND DEVELOPKENT OF CORPORATE AFFAIRS
STAFF
BACKGROUND
The effectiveness of an operating company's
Corporate Affiirs Department rests upon
the professional competence ofstaff. In a
worldwide group such as BATCo, special
efforts must be made to establish uniformly high
standards of professional practice.
POLICY
It is essential that the head of corporate affairs
function be aware of the company's
policies, plans, directions and any developments,
to be able to operate effectively and
provide informed advice to the company.
It is policy that the corporate affairs staff
training agenda be based on the technical skills
outlined in the PACE appraisal system and the
Corporate Affairs training syllabus now
adopted by the BA TCo Board
The professional development of corporate affairs
and public relations staff should be
through external training programmes, but where
these are not available, staff should be
assisted by in-company training, by co-operative
programmes with companies in the
same region and with Corporate Affairs Department,
Nfillbank.
OBSECTI'VES
To ensure the highest standing of the company
within its local environment.
The objective of stafftraining is to ensure that
high professional standards are
maintained. In this way the company will be able
to communicate effectively with and
enlist the support of those groups and individuals
who can help it mairitain its
commercial freedoms.
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BATCo document for Province of BritiSh Columbia 23
April 1999


KEY AREA PAPER CORPORATE AFFAIRS
NATIONAL MANUFACTURERS'ASSOCIAT'IONS
BACKGROUND
It is a recognition of the important economic
position often held by the tobacco industry
that governments will usually wish to keep closely
in touch. Governments will normally
prefer to do so via an organisation which can
represent the interests of all national
tobacco manufacturers. Such NMAs can also help
companies by providing a source of
industry information and agreed views on
non-competitive issues for the media-and the
public.
POLICY
It is BATCo's policy that wherever possible, the
views of a national tobacco industry
should be projected co-operatively through a
national manufa=rers' association.
On some occaslons, the outcome of certain key
issues can result in competitive
advantagefor one member of anVM4 over another. BA
TCo companies shouLd be
aware of such issues andpursue strategies that
ensure that the competitive advantage
falls in BA Tsfavour.
Where there is insufficient industry
representation to form an NMIA, the BATCo
company itself should he prepared to represent an
industry view.
NMAs should be adequately sta&d and funded. They
should establish appropriate
policies and measurable objectives. Effectiveness
should be audited and reviewed
regularly.
OBJECTME
To ensure that the industry presents strong,
consistent and unified views to its audiences
on non-competitive tobacco issues. This unity will
give strength to the industrys case
and so help create favourable conditions for the
responsible conduct of business.
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BATCo document for Province of BritiSh Columbia 23
April 1999


KEY AREA PAPER CORPORA TE AFFAIRS
INTERNAL COMMUNICATION'S
BACKGROUND
Reseuch clearly demonstrates that companies with
clear policies and effective system
for internal communications are more likely to be
successful.
POLICY
It is the company's policy to be open and honest
in all its dealings with employees,
involving them in business decisions and providing
regular and relevant information
about the company.
The company recognises that managers are the main
channel of information and win
carry responsibility for the quality and
timeliness ofiriformation.
The company undertakes that it will endeavour to
ensure that people hear news first
officially, rather than through the grapevine.
Communication is more than imparting information
so managers will also 'walk the job'.
The company recognises that communication is as
much listening as it is talking and win
ensure that wherever possible, communication Will
be face-to-face. It will also provide a
mechanism to enable staff to have questions and
concerns addressed in a timely way,
The company will ;ro%ide communications training
and development for employees.
All managers and super%,isors will be appraised on
their communications skins and
activities.
The company,.%ill endeavour to adopt best
professional practices and methods of
communication.
OBJECTIVES
To increase understanding of the company's plans
and business decisions.
To ensure people have all the information they
need to do their jobs.
To help indiNiduais feel involved
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BATCo document for Province of BritiSh Columbia 23
April 1999