Christmas is the season of goodwill isn’t it? It’s about giving and receiving gifts isn’t it? It’s about appreciating those around you and expressing that appreciation in the form of a hamper or a box of delicious brownies isn’t it?
Well, yes and no.
It used to be that offices were packed full of hampers, bottles of wine and boxes of cupcakes and while some bosses would hide them under their desks and take it all home to scoff or sup, others would spread it all out in the kitchen area followed by an email to all saying ‘there’s stuff, take whatever you like!’
Choosing the perfect gift for your partner or mother-in-law is fraught with peril and anxiety but sending out corporate gifts is relatively straightforward. You make a list of your clients (perhaps graded in terms of importance or money spent with you) and you send out the aforementioned box of cupcakes or brownies, a hamper of deliciously indulgent goodies or a case of wine.
You send gifts because you’re nice and you want to say thank you for a year’s custom and for most it’s taken as it’s intended – as a gesture of gratitude but for some, it can be seen as a bribe.
Are the gifts you’re sending to your best clients designed to, in the words of property journalist Mike Day, ‘be defined as offering, promising or giving a financial (or other) advantage to another person with the intention of inducing or rewarding that person to act or for having acted in a way which a reasonable person would consider improper in the circumstances?’
In other words, is your gift an unwritten acknowledgement that you’re trying to somehow influence your clients to stay with you or sign a contract or spend more money with you next year?
Unlikely, right? But it’s all about perception.
Ethics vs. Cake
Professional development expert Jeff Havens suggests three questions to help you decide whether it’s a gift or a bribe:
1. Is the gift standard for your industry? Taking clients, vendors or suppliers out for dinner is pretty standard stuff and if no-one bats an eyelid, it’s usually deemed OK.
2. Is the gift absurdly exotic? A box of brownies is fine but if one of your suppliers buys you a car or two weeks in Vegas, you might want to think twice about accepting.
3. Is the gift designed to get you to do something you wouldn’t normally do? If it is, you have your answer.
Interesting points and unfortunately, all too subjective. He also goes on to say, presumably tongue-in-cheek, ‘if you’re going to accept a bribe, make sure it’s big enough that you can live comfortably on it after you get caught and fired.’
Based on this subjectivity, should your business, regardless of size, have a clearly defined gifting and entertainment policy (sometimes called an anti-bribery policy)? Sadly, probably yes.
Policy Schmolicy, We Just Want Unusual Jam
Writing for what would be a guest publication on Have I Got News For You called Chartered Global Management Accountant magazine, Sabine Vollmer tells the story of Brenda Bayer.
As an employee of French energy company Engie who has done a number of different roles, she was used to receiving, amongst other things, very expensive bottles of wine (the article quotes $300+) but since she’s worked there, the company have rolled out a ‘detailed and explicit corporate gifting policy.’
She even emailed the companies she dealt with about the policy change and ‘now I hardly get any gifts at all.’
Working now in procurement makes the policy even more important. She said it ‘creates the wrong perception and compromises the team’s independence in searching for vendors.’
The thing is, it remains a grey area. By definition, corporate gifting isn’t synonymous with bribery but in today’s context, it must be viewed with extreme caution and gifting should be carefully evaluated.
An article by wire agency Thompson Reuters suggests that ‘Generally acceptable gifts include items of nominal value bearing the company logo, meals, and perishable gifts. Not acceptable are, for example, gifts to government officials, requests for charitable donations, and lavish gifts.’
For example, at Engie North America, any gift with a value of $30 or more must be approved by a member of the executive team and be accompanied by documentation before it can be received or given.
What Does A Corporate Gifting Policy Look Like?
For fear of sounding like Scrooge, a policy of this nature is important, especially in industries like IT since there are so many vendors and suppliers all looking for a piece of the action.
Bayer suggests ensuring that all policy information is clearly communicated to staff up and down the hierarchy as well as leadership oversight, occasional internal audits and frequent spot checks in countries where bribery and corruption are a problem.
It’s usually bigger companies who have a dedicated compliance officer and smaller businesses may have to nominate someone to take on the role but whomsoever does it, Thompson Reuters have put together a rule of thumb list that can form the basis of your own policy:
- Regardless of the size of the business, ensure you have a policy in place
- Designate ‘approvers’ who can determine decisions based on the company’s policy
- Implement a cost threshold so that any gift that surpasses a set price point must require approval. Typical thresholds are around the £50 – £100 mark but it will vary from company to company
- Implement a company-wide tracking system to record all gifts given or accepted, regardless of price
- Get prior approval for any gifts to a government official, compliance officer or senior executive
- Consider capping the number of gifts given to a single person in a year and similarly, the number of gifts an employee can accept
- NEVER accept (or offer) cash gifts or anything that could impact a business decision, such as obtaining or retaining a business advantage
No-one is suggesting that every box of chocolates or bottle of wine to say thank you is considered bribery but it’s worth thinking about.
Remember, ‘tis the season to be jolly…!’
Have a good week.