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Have you updated your company’s gift and entertainment policy?
By Lauren | April 21, 2009
AIG’s use of federal bailout money to pay lavish bonuses has made the embattled insurer a favorite target for public disgust over corporate excess. It’s not that AIG was doing anything illegal, you understand. It’s just that funding personal luxury with taxpayer funds is in very, very bad taste.
You’d think that other companies would take a lesson from AIG’s travails and scale down their own discretionary spending. And yet, according to a recent survey by the Society of Corporate Compliance & Ethics (of which I’m proud to be a member), almost half of those who responded said that their organizations hadn’t significantly updated their gift and entertainment policy in a year, and 20 percent of that group admitted that it had been three years or more since their policies had been revised. Not smart, folks.
There are good legal reasons to be careful about gifts and entertainment. For companies that do business abroad, treating foreign officials to expensive gifts and good times on the town can lead to bribery charges under the Foreign Corrupt Practices Act. Closer to home, failure to adopt and enforce a well-considered gift and entertainment policy can put a company at risk of violating Congressional ethics rules or industry-specific regulations (for example, the rules governing relationships between doctors and healthcare companies or government contracting regulations). Besides, many American workers are unemployed, underemployed, or scared to death that they soon might be. If those workers are your customers, they won’t take kindly to your squandering their money.
If your company doesn’t have a stand-alone gift and entertainment policy, now would be a great time to adopt one. If you have a policy but haven’t looked at it in a while, blow off the dust and consider whether some revisions are called for in the current economic climate. And don’t just look at the gifts you give; consider whether your employees should be allowed to accept gifts and, if so, whether to put a dollar limit on what they can receive. If a gift is expensive enough to influence a key employee’s judgment, it can put the credibility of your company in serious jeopardy.
Finally, think about how it would look if your company’s gift and entertainment policy was the top story on the nightly news. If the thought makes you shudder, it’s probably time to scale back. These days, frugality is all the rage.
Topics: Business Ethics, Corporate Governance, Legal Ethics, Risk Management, business communications, corporate responsibility, customer relations, ethics |