Entertainment, gifts and promotional spend

Principles

Gifts and entertainment are useful for building and maintaining relationships between business partners.  However, they may be seen as creating a conflict of interest by placing the recipient under an obligation to the giver, making them more likely to favour the giver in business decisions.  This is particularly the case if spend levels are excessive or unreasonable compared to the status of the recipient or to local business customs.

Policy

• You should never directly ask for a gift or hospitality.
• Reasonable gifts, hospitality and other promotional expenditure may be both provided or accepted so long as they:
  • Have a clear business purpose.
  • Are appropriate to the seniority of the recipient and are in line with local business customs.
  • Are not intended to influence the recipient’s actions toward the giver.
  • Do not contravene local laws or the recipient’s own Code of Conduct.
  • Are visible – properly authorised, recorded and accounted for.

Guidance

There is nothing wrong or inappropriate about giving or receiving small gifts or reasonable entertainment and hospitality - the difficulties come in judging what is appropriate and what is not.  Key to this are purpose, value and visibility.

Purpose

• Any gift or hospitality should be seen as a straightforward way of building or maintaining the relationship.  If there is any chance it will be perceived as a means of influencing or rewarding the recipient then it should not be offered or accepted.  Therefore it is better to avoid giving or receiving gifts or hospitality at key points during negotiations.
• There should be a business purpose to hospitality.  Employees from both the giver’s and the recipient’s organisations should be at any event, otherwise there is no scope for business discussion.
• Hospitality should normally be restricted to employees who have a direct connection to the business purpose of the activity.

Value – reasonable or excessive?

• Gifts should never be cash or cash equivalents.
• Gifts should be small tokens, ideally incorporating some form of marketing message, and should not normally exceed GBP 100 or local currency equivalent in value.
• Entertaining and hospitality should not normally exceed GBP 250 or local currency equivalent per head and the events should not normally last more than a day.
• No-one should receive frequent or multiple gifts or hospitality as a way of exceeding limits.
• Any requirement to pay or accept travel or accommodation expenses must have prior approval from your MD.

Visibility

• Exceeding the above limits for gifts and hospitality, whether giving or receiving, needs the prior approval of your MD, who will also be required to enter the details, including the justification for the item, into a register which will be reviewed by your DCE and by Group staff.  Your MD will also be required to sign any expenses claim you make which includes such substantial spend before the claim is settled.
• You should account for the cost of all gifts and entertainment you provide using your company’s standard expenses reporting and approval process.  You need to make certain the spend is properly analysed and include adequate detail, explanation and justification of the claim.