A coffee mug with an organization’s logo, an evening’s entertainment, an expense paid trip… are these appropriate business gifts to give or receive? Deciding is not always simple. Laws, policies and appearances must be considered, circumstances reviewed and common sense exercised before a business gift can be exchanged with confidence.
In this article, let’s explore the ambiguous nature of gifts with Data Legal Drive’s anticorruption experts !
What is a gift in an anticorruption context?
A gift is something of value that is given voluntarily. A gift does not require payment or anything in return from the person receiving it. In business, gifts are used to show appreciation, provide recognition and build brand awareness and relationships.
Whether or not to give or accept a business gift and deciding whether a gift is appropriate are decisions deserving careful thought. Relationships and reputations can be damaged if a gift is ill-timed, extravagant or unsuitable or if a gift carries with it an appearance of being unprofessional. Business gifts will not always be allowed or appreciated. At times, they can even be illegal.
Appropriate gift or not : How to tell the difference ?
Check your company gift policies, laws and regulation
Appropriate business gifts comply with relevant policies. Before giving or accepting a gift make sure that gift is allowed. A significant number of businesses and not for profit organizations have “no gift” policies, policies that limit the value of gifts given to employees or policies that place conditions on a gift’s acceptance. These policies help ensure that decisions are made for the right reasons. They limit the risk of a gift improperly influencing a decision-maker.
By outlawing or restricting gifts to employees, situations where self-interest competes with the best interest of the business or organization are avoided. The risks associated with corruption, conflicts of interest, negative media attention and reputational harm are reduced. These policies take the burden off employees who would otherwise have to distinguish whether, or which, gifts are appropriate or come with “strings attached.”
Laws and regulations prohibiting gifts to government employees and officials as well as their family members are common. In cases where gifts are allowed, significant restrictions on the gift’s value will often be present or other conditions will be placed on the acceptance of the gift. These laws and regulations are intended to prevent undue influence and bribery and must be taken seriously. Not knowing about these laws and regulations will not excuse prohibited gift giving. By being aware of these laws and regulations, negative consequences such as fines, penalties, criminal prosecution, loss of contracting rights and reputational damage can be avoided. Before any benefit or anything of value is offered or provided to a person involved in government, or even to their relatives, it is important to determine whether legal prohibitions or restrictions apply. Appropriate gifts will always comply with applicable laws and regulations.
Organizations often post their gift policies on-site as well as online and laws and regulations that apply to gift giving can also be found on the internet. In addition to reviewing your own organization’s policy before making or accepting a gift, checking these sources to see if a policy, law or regulation prohibits or limits the gift or conditions its acceptance makes sense. Policies and laws are subject to change so keep your knowledge up to date and remember that laws and regulations are likely to be different in different jurisdictions.
Tips to recognize appropriate gifts
Gift type and timing
An appropriate gift will have an appropriate purpose. Business gifts are often given to show recognition, celebrate accomplishments and build relationships. If a gift, or promise of a gift obligates the person who receives it in any way, or if the gift was requested, the “gift” is improper and could actually be a bribe. An appropriate gift will not have strings attached, impose an obligation or require an outcome in the gift giver’s favor.
Appropriate gifts will not cause undue embarrassment or raise suspicions. Gifts of cash and cash equivalents are not appropriate business gifts. They are often associated with bribery and other crimes. Any appearance of impropriety in the making or receiving of a gift may have serious and unfavorable consequences. Gifts in poor taste should not be offered or accepted and the timing of any gift must be thought through. Consider conclusions that might be drawn if a gift were delivered to someone in the middle of making a purchasing decision. Would the same alarms go off if an identical gift was delivered at holiday time or when no decision making was underway? A well-intentioned, but poorly timed gift can suggest an improper arrangement, pay-off or bribe. Appearances can be important.
Gift value
The value of any appropriate gift will be reasonable. Extravagant gifts are rarely, if ever, proper. Determining a reasonable value involves common sense and an appreciation of industry custom and surrounding circumstances:
- Are others giving/receiving comparable gifts?
- Will you be comfortable sharing information about the gift and its value with co-workers, management, government regulators or the press?
- Could the value of the gift cause anyone to suffer embarrassment or adverse consequences?
- Would the employer of the gift giver or gift recipient or government regulators approve of the gift?
Answering these questions can help to assess whether the value of a gift is reasonable.
How to manage gifts ?
Occasionally, an inappropriate gift arrives or is offered. What is the best course of action? When a gift, that cannot be accepted, arrives, return it. If an inappropriate gift is offered, refuse it. If an inappropriate gift appears but cannot be returned, you cannot ethically keep or benefit from the gift. Pass the gift on to a charity or set it out in a public area to be enjoyed by co-workers or others who are not in a position to reward the sender of the gift. Depending on the circumstances it may be necessary to report the gift to management. By educating vendors and other third parties about gift policies and legal requirements, some unwanted gifts and potentially awkward situations can easily be avoided.
Appropriate gifts, on the other hand, can serve an important business purpose – they help build relationships. To make good decisions about business gifts, find out what rules apply, think through your choices carefully and use common sense. Be thoughtful and transparent and if you want to test your decision making, have concerns or want to talk through your options, speak to your supervisor or the compliance department for assistance.
