Why a harmless gift is not always what it seems
Bribery and corruption – it can all start with the smallest of gifts. This may seem like a very simplistic way of tackling one of the most serious issues facing the business community all around the world. However, the practice of giving gifts in expectation of reciprocity was instrumental in explaining to our partners and the wider business community some of the issues surrounding anti-bribery and corruption practices – at our most recent discussion event on the subject on 28th May in Dubai
A CEO mentioned that he had noticed the giving of small gifts by customers to some of his lower level staff. The purpose of which was clearly to gain quicker service than their peers.
By taking the gift in good faith it might only seem right to the worker to return the favour by helping the other party out, bumping them up a few places in a queue. Yet herein lies the rub, such a gift is rarely a selfless act, and the story might not end there.
The time will come when a seemingly harmless gift given to a low ranking employee will not be enough, and these gifts become more extravagant and start to be offered to employees higher up the food chain, and before you know it you have a corporate culture that permits what might be termed “facilitation payments”. Some companies even call items “facilitation payments” when they’re actually outright bribes. (The OECD defines a facilitation payment as a small amount that is encouraging performance of a routine task that would be done anyway, and not to obtain or retain business or any other undue advantage).
The pressing issue is to enforce a strong culture in the opposite direction. It may not always be easy, and there might be some short term pain, but this is needed to ensure a long term gain.
If ever evidence was needed to identify that long term gain, it is this. International legislation (such as the U.S FCPA and the UK Bribery Act) forbid companies from engaging in any activity that could be considered as bribery or corruption. This type of legislation is typically borderless and can affect any company that deals with multinational businesses that are bound by such laws.
Indeed in this region, by demonstrating a robust anti-bribery and corruption policy, family firms stand to gain the most from this legislation.
The natural choice for some of the world’s largest brands when seeking to gain a foothold in this region is to enter an agreement with a family firm, and with such legislation in place it is imperative that they enter agreements with organisations that pose the minimum risk from a legal and compliance perspective.
Across the themes of corporate governance, accountability and transparency, people often ask us, “what is the first mover advantage for us, and why not wait for someone else to be first so that we can see how they do?” I believe that the business case for adopting anti-bribery and corruption practices warrants no such question, other than, “what do I need to do to implement this today?”
At the Pearl Initiative, we hold a number of events dedicated to helping companies understand the business case for implementing higher standards of governance. You can rest assured that the insights shared at these are a gift that can be shared right through an organisation – to everyone’s benefit.