Agreements Online Employee Benefits April wk 3

7 Questions and Answers to Corporate Gift Policies

With South Africa finally emerging from the mayhem of the last few months, many companies are knuckling down to doing business in the vastly different post-Zupta era. With court-cases galore, and scores lining up to become state-witnesses in return for saving their own skin, it has become clear that palm-greasing is no longer an acceptable business practice. Gifting a business colleague with a luxury German car is more likely to land you a jail cell than a sales order. Many questions are being asked about how the business will be conducted differently going forward. Company gift policies should feature prominently in any company’s post-Zupta Q & A sessions.

  • What constitutes a ‘gift’ in the business world?

The concept of gifting in business is common-place and is regularly used as a sales and marketing tool. These gifts can be everything from branded stationary and free samples, to meals and accommodation, to more extravagant gifts, either before a deal is concluded or afterwards as a token of gratitude. Within the concept of corporate gifts, most people would agree that there’s a very big difference between receiving a branded pen and receiving a brand-new car. The problem comes in with all the gifts in between. What starts off as a bunch of flowers and a box of chocolates becomes meals and free samples, and then ramps up to vouchers, bottles of Johnny Walker blue, golfing weekends away, overseas trips, a new Rolex, Rolls Royce and a mansion in Dubai. The question is: at what stage does the gift cross the line from ethical to unethical, or from legal to illegal? It’s a grey area, with no definitive answer.

  • Why give gifts in business?

Human society is based on the concept of reciprocity. You scratch my back, I’ll scratch yours. When a person receives kindness, they’re inclined to return kindness. When they receive a gift, they’re inclined to return the favour. It’s a societal norm. The problem is knowing where the line is. This raises another problem, in that every employee is inclined to place this line at a different place. Which is why the company should set the standard for the acceptable giving and receiving of gifts.

  • What are gift-giving and receiving guidelines based on – ethics vs legality?

From a legal perspective, we have anti-corruption legislation. In a nutshell, the law provides that a gift becomes unlawful if the intention of giving or receiving it is to induce someone to do something in an abuse of their position of authority. The problem is that in addition to the interpretational challenges, enforcing the legislation becomes difficult. You need to show that the giver or receiver gave or received the gift intending for it to influence the transaction.

From an ethical perspective, it’s up to every business to determine, within their own corporate culture, what they are and are not willing to give and receive as gifts. There is no golden rule. It varies from business to business, from industry to industry. What is clear, though, is that every business can and should take the bull by the horns, open the discussion with their staff, and set guidelines in place. This will avoid any conflict and fallouts when dealing with the issue after the fact.

  • How do you determine whether a gift is or isn’t acceptable?

When it comes to gifts, a good rule of thumb is: If the gift is one that you are happy to tell other people about, including your staff and employer, then there’s usually no problem with it. If it’s a gift that you don’t want other people to find out about, that’s a problem and should immediately raise warning bells. Which means that there should be no objections to implementing a gift register. If you’re happy to list your gift in the register, it’s probably a-okay. But if you’re not happy to list the gift, why are you accepting it?

  • Should gifts be given equitably?

Often the recipient’s position in the company dictates the level of the gift: the credit controller may get a bunch of flowers while the sales director is presented with a golfing weekend. Some companies may prefer to implement a more equitable approach throughout the organisation. Other companies may allow for differences according to their employees’ position. But the same questions apply regardless of the position the person holds in the company. Is the receipt of the gift acceptable? Can it be ethically and legally justified?

  • How can a company open the gifting conversation?

Gifting in business is very much a top-down approach. Top-level management should be setting the example. One of the best ways of addressing the issue of gifting is to build the company’s accepted approach into a formal Gift Policy. During this process, a gifting policy can and should result in a lot of debate amongst your staff. It can be used as a tool to open the conversation and find out how your staff view gifts. A company’s corporate culture is also important in determining the company’s approach to gifts, as is the industry in which the company operates. It’s the responsibility of every business owner to look at their own corporate culture and industry and to set the framework within which they are prepared to operate.

  • How do I draft a Corporate Gifts Policy?

You can write your own Gifts Policy from scratch, asking the company’s employees for suggestions and comments. If you’re not comfortable in sparing the time required, or are concerned that you may miss a few important points, and you have the budget available then you can employ a consultant to draft the policy for you. Or you can purchase a standard Corporate Gifts Policy which you can then tweak to suit your own requirements.

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.