And so it’s that time of year again when we wilt under a barrage of major sporting events. We’ve shouted “We are the Barmy Army, oi!” at the top of our lungs even without knowing what it means and are still wondering whether England will ever win a penalty shoot-out or have a Grand Slam champion. And still to come, the jewel in the 2012 British sporting calendar crown, the Olympics.
What this time inevitably brings is endless fretting about the weather and that elusive (feasibly now extinct) notion of the “British Summer”. More to this blog’s point, it presents a host of opportunities for UK employers to lavish corporate hospitality on their clients and contacts in a bid to build relationships and develop their business.
However, just over a year since the Bribery Act 2010 came into force and despite reassurances from the UK Serious Fraud Office that normal corporate hospitality to such sporting events would not be investigated under the Act, there still appears to be some fear that companies taking clients and contacts to the Games may fall foul of the Act and land themselves with a prison sentence and/or a hefty fine.
A commercial organisation is guilty of a corporate offence if it fails to prevent bribery that is intended to obtain or retain business or an advantage in the conduct of business for the organisation. A bribe is defined as “a financial or other advantage” offered, promised or given to induce a person to perform improperly a relevant function or activity, or to reward them for doing so – a wide definition covering many “advantages”, undoubtedly including corporate hospitality.
The Act is not designed to prohibit such hospitality; the key factor is the intent associated with it. Invitation to build relationship with client – good. Invitation to procure million pound contract which should properly have gone elsewhere – bad. In Government-speak, it is about assessing, in the particular circumstances, what is reasonable and proportionate. In other words, common sense is the rule of thumb. But “common sense” is not, as both the prosecution and the acquittal of Chelsea star John Terry on racial abuse charges could be argued to show, an invariable part of the judicial process.
Unsurprisingly then, only last month 20% of corporate hospitality Olympic packages remained unsold. This against a backdrop of the British public’s apparently insatiable appetite for the Olympics with tickets for many events being more than 10 times over-subscribed. So are companies being unnecessarily cautious?
In line with the Government’s guiding principles http://www.justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pdf), first and foremost you should have a clear written policy on corporate hospitality and procedures for following it. Levels of hospitality will legitimately vary from industry to industry – you must ensure your bribery prevention procedures are proportionate to the bribery risks your organisation faces and that those policies and procedures are communicated to and understood by all staff, and monitored and reviewed periodically.
It will help to be seen to ask yourself:
- Is offering or accepting an invitation sensible and proportionate?
- Is the cost appropriate to the value of the relationship?
- Who is the entertainment being offered to (status/seniority, have they been invited to lots of events already)?
- What circumstances exist at the time that might make it look inappropriate, such as coinciding with a key business decision).
- Are there any unjustifiable “add-ons” (e.g. extending the offer to spouses or family).
- How would you feel if the expenditure was reported on the front page of the local newspaper?
- What are similar businesses doing?
- Are you inviting someone from a foreign country? You need to check if the recipient is entitled to receive the hospitality under their own jurisdiction’s laws. Foreign public officials, especially, are subject to stricter rules than others.