To give or not to give: that is the question
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Mauritian hospitality is distinctively special : we don’t mind guests turning up unannounced at our door; we still receive them with as much generosity as we would for a planned event. This selfless gesture is one that many visitors to our island remember and talk about. In business, however, there is no such thing as a free lunch or selfless gift giving. Gifts and hospitality are often given or received with good intentions, such as for networking purposes, for showing goodwill, or for promoting the company image. Equally, gifts and hospitality can be disguised as bribery and to corrupt objective decision-making. So how do we protect ourselves and how do we distinguish the good from the bad?
It is about intentions: we know when we have good or bad intentions. However, what we mean to do is not always clear to others and it may be different to what we are perceived to be doing. So, we need to be transparent, fair and be ready to demonstrate what our intentions are. At the outset, before we even decide to offer or accept a gift or hospitality, we need to ask ourselves whether it is reasonable, proportionate and can be justified as having a genuine business purpose. We should also consider the context in which something is offered and the value of the gift or hospitality. For example, taking a prospective client out to play golf, with no scheduled business discussions and when we’ve just submitted a bid for a new contract, can be perceived as an attempt to obtain a favourable advantage and influence the prospective client’s decision. Conversely, inviting all existing clients to an annual golf day, during which we also provide a business update, can be accepted as having a business purpose and not placing any particular client under any obligation.
Often we think that we should be careful only when giving, but it is equally problematic if we accept a gift or hospitality from someone who offered it maliciously and is expecting to get something in return. Therefore, in addition to its context, we should consider the intention of the giver and whether the nature or value of the gift or hospitality is acceptable or not. It is perfectly acceptable to receive a company-branded gift, such as a pen or other stationery, as those items are typically of low value. A Montblanc pen, on the other hand, carries a high value and is questionable: is the giver trying to change the opinion we hold of them, to retain business or to influence a future decision?
Whilst there may be situations where someone may not have been diligent enough when offering or accepting an excessive gift or hospitality but did so with no ill intentions, it is more difficult to argue the same for those who actually ask for a gift or hospitality. After all, one would typically ask for something if they felt they had the power, authority or higher bargaining position to do so. A customer could ask for something from a supplier but it is unlikely that a supplier would ever ask for a gift from their customer. In other words, this would be a case of abuse of power for personal gain – the classic definition of corruption. Asking for something would make the other person feel obliged to fulfil the request for fear of frustrating a business relationship, for example where a public official asks for a job for their daughter, or where a customer asks a supplier to “donate” a prize for the customer’s raffle at their end-of-year staff party. Other examples include asking for a reward, discount, premium, loan, fee or commission; essentially, forms of cash or cash equivalents should not be requested, offered or given as gifts. Extra care should be exercised when interacting with public officials: the Prevention of Corruption Act 2002 makes it clear how these types of ‘gratifications’ could be considered as bribery or corruption offences.
In small organisations, it may be possible to vet all gifts and hospitality given or received. However, it may not always be easy to do so in large corporations, especially where different departments may interact with different types of stakeholders. A simple solution for addres-sing this issue is to introduce internal rules on giving or accepting gifts or hospitality. Such rules could encompass the thought processes discussed earlier in this article and be complemented with the implementation of a gift and hospitality register. The register serves as an efficient way to track compliance and to obtain a manager’s approval prior to the event and depending on the value of the gift or hospitality. The register also serves as a good tool to monitor who, whether internally or externally, are frequently giving or receiving gifts or hospitality – this enables management or internal auditors to verify the legitimacy of such activities. In short, gifts and hospitality are not problems per se but they can be, if left uncontrolled. Ensuring there are sound rules and transparency shall contribute to good corporate governance and promote the reputation of businesses and individuals as good ethical leaders.
