Sports events, entertainment and gifts have always been used to leverage business relationships, but when does a ‘gift’ cross the line into bribe territory?
The premise of giving gifts is an ancient way to express gratitude, appreciation and love. Giving in itself is fairly innocuous and it is based upon the philosophy of reciprocity which is commonly articulated by phrases such as “what goes around comes around" or “what you sow, you will reap”. While gifts are often given as a gesture of goodwill, overly generous business gifts tend to put pressure on the recipient to extend more than just goodwill to the giver. Thus, not surprisingly, the line between sincere giving and bribery is becoming increasingly distorted.
Gifts, even those of nominal value, can create the perception of undue influence. So what are gifts and bribes? Defining gifts and bribes may seem like a simple-minded activity, but, try posing the question another way and you will see why this is an important issue in business and professional ethics: What is the difference between a gift and a bribe? A gift is something of value given without the expectation of return; a bribe is the same thing given in the hope of influence or benefit. Gifts and bribes can be monetary, actual items or they can be tickets to a sporting event, entertainment, travel, rounds of golf or restaurant meals.
For those in the legal profession, it has become increasingly difficult to decide where to draw the line between permissible and impermissible actions. Sometimes accepting these gifts and amenities may be a proper part of a business relationship. In some situations, however, accepting them may be a serious breach of business and professional ethics, and perhaps even a violation of the law.
Policies and practices on handling gifts and invitations to special events vary from company to company. For some the potential harm to an organization’s credibility is not worth the risk and they ban all gifts to employees, excluding personal gifts from friends and family. Other organizations accept gifts, but when received, donate them to a non-profit organization. Then there are some organizations where gifts received must be declared and it is maintained in registers. In other organizations, unsolicited gifts are shared with all employees. If everyone benefits equally, it may lessen the perception that the gift was intended to influence the action of a single employee.
Clearly, it is unethical and in some instances illegal to accept gifts or invitations to any event where the intent is to buy favor or influence something. Recognizing that business is often conducted at social events and paying your own way to attend an event is not always feasible, some individuals do accept invitations to social events when the overall purpose is to further the company's interests. Others attend only those business-related social functions when they or their company or local office can pay for the cost of attendance because it is in the interest of maintaining good business relationships to participate.
There are codes of ethics for auditors, accountants, doctors, lawyers, government officials, pharmaceutical companies, journalists and most other professions. You will avoid embarrassment and unnecessary expense by researching what these are. You work hard to establish credibility and trust among your colleagues, the other businesses with whom you do business, and most importantly - with your shareholders. Credibility and trust in the practices of your business are built around accountability and appearances.
If you are facing criminal charges for a bribery case arising out of gifts or ‘perks’, contact the offices of Adams & Associates for a case assessment. Often, the small details matter in determining the intent of business gifting.