Adequate Procedures, Corporate hospitality - Written by on Thursday, September 30, 2010 4:19 - 0 Comments

Alex, the Bribery Act and the London summer season

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Now even Alex from the telegraph has got into the act with the increasing stories appearing in the media (see just some of the examples here, here and here) about the new UK Bribery laws which will come into force next April.

Alex, always cautious to look after number 1 is deploying his own strategy in relation to the concerns around corporate hospitality and next years summer season.

Flawed Strategy

We hate to burst Alex’s bubble. But sending out invitations early is not going to be the solution to the lack of a carve out for corporate hospitality from the Bribery Act.

Much ado about nothing, for Alex?

However, we question whether Alex should really be concerned. On the face of it it looks like fairly standard corporate hospitality. The SFO have said that they will be targetting at lavish corporate hospitality.

The concern broadly is that corporate hospitality could be used to “groom” individuals to corrupt them. However, the SFO has signalled it will take a reasonable and proportionate hospitality to present products and services and to establish cordial relations. Of course, there are infinite variations of the types of corporate hospitality which can be given and each case will depend on the circumstances.

What should Alex and his bank do?

The higher the spend the more likely that the corporate hospitality will be considered “lavish”.

The bank will need to put in place a clear policy to deal with anti corruption generally.

There is a wealth of material on the internet including tips from the government in draft guidance and from Transparency International.

The key will be to instil a clear culture from the top to the bottom of the bank (or running through it like a stick of rock) of anti corruption and ethical policies.

Broadly 4 key themes emerge when it comes to corporate hospitality

1.Clear policy

There must be a clear policy against gifts and hospitality to influence. The SFO say that the influence they will be looking at will be attempts to influence nefariously. They say they are not looking to persecute ethical businesses whose intent is to, say, raise brand awareness etc. as all organisations do.

2. Upper limit

There must be clear guidance on an upper limit.

3. Policies must be communicated

Employees, service providers/suppliers and business partners must also receive training about the Bank’s policies.

4. Books and records

Corporate hospitality and gifts given or received must be fully documented. Suspicions will be aroused if records are not kept. The likely assumption will be that there is something to hide.

No more corporate hospitality tents?

However, we don’t think that a police raid on the corporate hospitality tents at Wimbledon, Glyndeboure or Ascot with paparrazi photo’s of bankers, politicians, lawyers and accountants being led away in handcuffs (however much universal appeal that has) is on the cards just yet.

But a note to Alex. If your plan is to fly people, helicopter them to the venue and feed and water them on Beluga caviar and Cristal champage you should expect the police to break up the party even if you’re not too noisy.

Avid followers of Alex may recall that earlier this year he spent a fortune on lavish hospitality on his son’s girlfriend’s father in attempt to win business. The father, unimpressed by Alex lavish overtures did not succomb to Alex’s charms. Alex, however got his revenge by organising a hostile takeover of the fathers company and summarily sacking him.

We’re not sure that Alex is the best role model when it comes to the Bribery Act.

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