Corporate responsibility

Our approach to business

We want the Ladbrokes brand to be recognised and trusted wherever we do business. Therefore our internal codes of conduct require business professionalism, honesty and integrity in all that we do. We seek to comply with all relevant legislation and to maintain good relationships with all our stakeholders.

Ladbrokes is committed to being among the leaders of our sector in responsible business practice. During 2008 our high standards of Corporate Responsibility (“CR”) were again recognised by the Dow Jones Sustainability Indexes (DJSI) and FTSE4Good Indices.

CR governance

Our aim is to embed CR policies and processes within the day to day operation of our business. The Chief Executive, who sits on both the Executive Committee and the Group Board, is ultimately responsible for CR matters. The Chief Executive is supported by the CR Team who provide an overview and advisory function for the business.

Overall governance of CR is the responsibility of the Executive Committee and the Group Board. CR and governance issues are given full consideration by the Executive Committee and the Group Board when defining the Ladbrokes business strategy.

CR risks are regularly reviewed by the business and are considered by the Board, as appropriate, as a part of the corporate risk review process. CR matters are reported to the Group Board on a regular basis (as a minimum quarterly) thus forming part of the Board calendar, along with tailored director briefings and where appropriate, training.

The Board reviews the key CR issues and agrees the annual CR strategy. Board members are provided with adequate background information to support their decision making. The remuneration committee also takes account of CR issues when determining executive remuneration and benefits. CR governance and management processes are subject to internal audit and the reporting process is externally verified by our CR advisors, Acona Ltd.

CR strategy

The following CR issues have been identified as key to supporting our business growth and form the pillars of our CR strategy going forward:

• maintaining high ethical and socially responsible standards throughout our operations;
• promoting responsible gambling behaviours across our business and the industry as a whole;
• keeping our customers satisfied; well informed about and interested in the products and services we offer;
• attracting a diverse workforce and sustaining high levels of competence, motivation and loyalty to the business;
• minimising the risks from our third-party relationships – business partnerships, joint ventures or within our supply chain;
• minimising the financial and reputational impact of non-compliance with CR legislation;
• minimising health, safety and security risks to our business, our employees and the general public from our operations;
• understanding global environmental agendas and minimising the impact of increasing environmental costs on our operations; and
• being a good corporate citizen and a respected neighbour in our communities.

We monitor our performance through appropriate KPIs reflecting each pillar of our CR strategy. Further detail on these is given in our separate CR report. The results to date suggest that we are broadly in line with our strategic aims.

Engaging with our stakeholders

Our stakeholders are all those people who have influence over our business and the industry we work in, and in turn those who we influence during our operations. Ladbrokes has a wide range of stakeholders from our shareholders, employees and customers, through to our regulators and academics.

We believe that we should engage with our stakeholders and stay informed of their opinions. This knowledge is vital to the long-term development of our business. We have a comprehensive programme in place to make sure that we engage at all levels in our organisation, more details of which are given in our separate CR Report.

In particular, we keep abreast of the policies and standards of the most significant of our investors and the research organisations which support them. We review their reports on Ladbrokes and engage in an ongoing dialogue where appropriate.

We also participate in a number of CR indices and disclosure schemes, providing information on the Group’s CR activities and taking note of their feedback on our submissions.

High ethical and socially responsible standards

For many years we have supported the Association of British Bookmakers (ABB) and the Remote Gambling Association (RGA) in establishing industry-wide social responsibility standards and promoting self-regulation. For example we were involved with the RGA in developing the new Code for Socially Responsible Advertising and have remained active in the discussions with the ABB over the potential RET levy (funding for research, education and treatment for problem gambling).

We have embraced the new legislative regime in the UK and are meeting the requirements of the Gambling Commission. We fully support the Commission’s three key licensing objectives to:

• keep crime out of gambling;
• ensure gambling is conducted fairly and openly; and
• protect children and vulnerable people from being harmed or exploited by gambling.

All relevant personnel are trained to meet the required standards. To monitor compliance we have a comprehensive programme in place, headed by our Compliance Director and overseen by our Compliance Committee. This programme is subject to internal audit.

Promoting responsible gambling behaviours

Ladbrokes continues to work with its peers and national governments to improve responsible gambling behaviour across the industry.

We have our own systems in place to ensure that our customers are well informed, for example: about our products, about problem gambling issues and for our online customers, about their own gambling history. In support of this, we don’t use misleading “teasers” to entice customers onto our sites or misrepresent the risks to our customers by the use of free demo games with more favourable odds to the main play.

We provide inherent protection to try to limit the possible financial impacts on our customers from excessive gambling, e.g. daily and weekly deposit limits and appropriate customer due diligence.

We protect the young and the vulnerable through, for example, clear marketing standards, strict age limits, on-line age verification checks and self exclusion arrangements.

“Just another game” and “You bet” have been written to raise awareness amongst young people of gambling issues in order to help prevent problems. The education packs enable young people to develop personal and social skills that are also relevant to a wide range of choices and not just to gambling. More information is provided on the RIGT website.

Highlights	Commentary
Dow Jones Sustainability Indices	One of only two global betting and gaming companies in the Dow Jones Sustainability Indices. We scored 71%, that’s 7% up from last year.
FTSE4Good	Ladbrokes remains in FTSE4Good following both March and September reviews. We have been members since its foundation in 2002.
The Observer Good Companies Guide	58th out of a total of 311 companies of the FTSE350 in the Observer Good Companies Guide.
Britain’s Most Admired Companies	Ladbrokes was 60th in Management Today’s list of Britain’s Most Admired Companies.
The WOW! Awards	Retail customer satisfaction averages over 87% and over 840 employees get WOW! Award Nominations for excellent customer service.
Ladbrokes Retail Performance 2008	New retail bonus scheme benefits more staff. More than 70% of cashiers think the new bonus scheme is better than previous years.
High Safety Standards	We have a good health and safety record. There have been no fatalities and no major injuries across the business in 2008.
Environmental Performance	Our CO2 emissions from our UK Retail and eGaming businesses were over 55,000 tonnes CO2 equivalent for 2008. This is 19% up on the equivalent figure in 2007 and is due to increased opening hours across our estate.
Communities and Charities	Ladbrokes in the Community Charitable Trust (LICCT) donated over £780,000 to charities across the UK, including £100,000 to Breast Cancer Awareness Campaign, £100,000 to Childline, £50,000 to Guide Dogs For The Blind and £25,000 to The Samaritans.
Leading Employer	The British betting industry employs over 40,000 people, over 14,000 of whom work for Ladbrokes.
Leader in Safety and Security in the workplace	Ladbrokes is the only national bookmaker to have a 24 x 7 central security team and 100% of shops with CCTV, Panic Alarms and Intruder Alarms.
Leading funder of problem gambling charities	Committed to voluntary funding for research, education and treatment. Ladbrokes regularly exceeds its fair share of contributions.

Growing and keeping our customers

We provide our customers with an enjoyable, efficient, secure, fair and socially responsible service and all our employees are trained to support this commitment.

We are keen to drive brand loyalty and all that the brand stands for, including trust and integrity. We seek customer views and encourage feedback on our employees and our services. We continually assess our performance through third-party audits (e.g. mystery shopper surveys) and monitoring customer complaints.

This year we were the first company within the betting and gaming industry to establish a customer reward card. OddsOn! was a great success with over 150,000 customers signing up for the card in the first week. More details on this are given in the UK Retail review.

Diverse and motivated workforce

As our business becomes more sophisticated and technology driven, we need to ensure that we sustain a high level of competence across the business and increase our capacity to respond to changing market needs. We recognise that our employees represent a centre of excellence for the industry – one which we wish to maintain.

A key part of our human resources strategy is to be a modern, attractive and fair employer and to value and recognise employee loyalty. We work hard to understand the needs and expectations of our employees, most specifically through our UK Staff Council. Ladbrokes also provides clear opportunities for development and progression; all of which helps to maintain high levels of employee satisfaction and minimise turnover.

During 2008 we launched a new retail bonus scheme and a new “Get Set” training package which helps focus our training and development programmes.

Suppliers and business partners

We have a responsibility to assess the social, ethical and environmental risks associated with our business partnerships, joint ventures and product sourcing.

This year we have piloted our new responsible procurement framework. In conjunction with the central procurement team, we have tested compliance with the Ladbrokes global CR supply chain standards with some of our key suppliers.

Health, safety and security

We aim for best practice health and safety standards throughout all our operations and we support a proactive culture of risk management. Our health and safety record in 2008 was good. We had no fatalities or major injuries across our business and following 92 health and safety inspector visits in the UK alone, there were no enforcement notices or notified non-compliances. Furthermore we had no prosecutions or convictions for health and safety offences.

One of the important risks to the health of our employees and our customers comes from breaches of security on our premises, such as robbery and theft. We have invested heavily in CCTV which is installed across all of our UK Retail estate, both to help reduce the number of incidents and to help protect employees and customers.

In addition, we carefully monitor and seek to minimise the financial impacts of health and safety related claims from across our business.

Environmental issues

Although Ladbrokes does not have a major impact on the environment, we are nevertheless committed to improving our environmental performance. Our main focus is on energy efficiency, resource use and waste management. We have reviewed the issues associated with climate change and have been assessing the potential impact from the rising costs of utilities. This year we joined the Carbon Disclosure Project – an investor sponsored scheme for collating company data on climate change issues. In addition the facilities, procurement and IT teams have identified savings through a number of energy saving and waste recycling initiatives. These will be implemented initially across the UK estate.