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As the festival of lights draws near, it is the opportune time to clear any predicaments associated with gifting. The customary exchange of gifts with business partners and clients is a reminder of the respect and goodwill shared with them. However, when gifts are solicited or breach the organisation’s code of conduct, it wipes the thin line that separates a gift from a bribe. It is therefore important that organisations up their compliance oversight and exercise extra caution during this time to ensure their ethics and gifting policies are clearly communicated. A wrongfully accepted gift can make an organisation vulnerable to accusations of unethical, or even unlawful, conduct.
Code of ethics provide guidelines for employees follow the right protocols to exchange gifts. A clearly articulated gifting policy states the norms around the acceptable limit and mentions what is unacceptable as a gift. Acceptable gifts could include corporate branded or perishable gifts, whereas unacceptable items are lavish gifts that are beyond the permissible value.
The gifting policy should also include potential scenarios of dilemmas that employees may encounter while dealing with third-parties like vendors, suppliers or clients. These examples should provide guidance on what to do when stuck in a tight spot, and talk about the necessity to contact the compliance or ethics department when in doubt.
Further, such policies must be readily available and sufficiently broadcasted within the firm. Conducting workshops and periodic trainings to spread awareness is equally important. These trainings must be mandatory with a special emphasis on departments like procurement, which usually deals with third parties like vendors/ agents/ suppliers. A refresher on the policy by advertising it suitably within the organisation is recommended before the onset of the festive season. A message from the leadership, maybe from the CEO, would be a step in the right direction in reinforcing the message.
Examples of best practices
1. Establishing a clear ethics and gifting policy.
2. Adhering to the prescribed threshold of gifting, employees must be strongly encouraged to be well-versed with the code of ethics and gifting norms so that they can distinguish between what is permissible and what is off-limits.
3. Complying with local regulations and provisions of global anti-bribery regulations like the Foreign Corrupt Practices Act (FCPA).
4. Understanding what is impermissible. This may include (but may not be limited to) cash or cash equivalents, holiday coupons or vouchers, or ostentatious gifts exceeding a reasonable or prescribed value.
5. Encouraging the exchange of corporate branded items.
6. Focusing on intent of the gift and being cognizant of its timing. If it coincides with the renewal of a vendor contract or looks like a favour the other party might expect in return, it is not a gift.
7. Routing the gift through the compliance department when suspicious.
8. Maintaining records of the gifts in the books to ensure transparency. Many organisations maintain a register to record gifts received.
9. Providing employees easy access to and appropriate platforms to report non-compliance.
10. Disciplinary procedures in case of a violation.
In a nutshell, a wrongfully accepted gift can make an organisation vulnerable to accusations and put its reputation in jeopardy. Keeping the festive spirit going with Diwali greetings or ladoos is perhaps a great choice after all!