Tuesday, 12 June 2012

Keep a lid on client costs

Companies who pull out all the stops to impress clients must try to curb their enthusiasm or risk falling foul of bribery legislation.

This summer's packed calendar of events brings a whole host of corporate entertainment opportunities - with Wimbledon and the Olympic Games just two of the highlights.

And our senior partner, Graham Davies, has warned corporate hospitality must be set at a "reasonable" level, or it may be contrary to the Bribery Act 2010.

"In a survey, over half the business managers interviewed thought that spending £100 per person on corporate hospitality was lavish. And the more lavish a business gift or hospitality, the more likely it is to be considered contrary to the Act.

"But of course, £100 per head doesn't go far in today's world, particularly if you're buying tickets for major sporting events."

Graham said the Act was not designed to prohibit business entertainment altogether, but at the same time, it didn't set out what acceptable limits may be.

"It just says that the amount you spend must be proportionate and reasonable based on the business that you do. But setting a low limit on hospitality expenses and so thinking the Act won't apply isn't the answer either.

"By doing this, you'll find it difficult to prove that you took adequate steps to prevent bribery if anyone should accuse your company."

Graham said companies should set out a strong anti-bribery policy and have clear guidelines on how corporate hospitality should work in their organisation.

"Set out your rules on any hospitality that's given or received, and decide on the level of costs that must be pre-approved in advance by a director before an event goes ahead, or ask that all corporate hospitality is signed off before it actually happens or is accepted by your staff.

"This way someone in a senior position will be aware of everything that's going on so they can question anything that looks like it may be against the rules - it's also a good way of checking just how much is spent on business entertainment."