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Gift Giving - Is It Ethical or Unethical?

Published by in Business ·
Tags: GiftGiving
The moral and ethical position of giving and receiving corporate gifts can be somewhat confusing, requiring particular care to cultural differences.

You may feel like hospitality gifts cannot be given or accepted in your business.

There is no doubt that offerings of gifts of hospitality has an important role in building business relationships. A meal with a supplier can help build a relationship; a corporate gift with your company’s name on it can remind a customer of you when they need a quote.

However, at times the line between what is thought of as a gift and what is considered a bribe can be a little grey, with the acceptance of a gift, leaving a company vulnerable to accusations of unethical, or even unlawful conduct.

When is a gift not a gift?

First, consider what the point of the gift is. Is it to sway, change or corrupt a relationship? Or is it simply a sign of thanks?

What’s the expectation?

It goes without saying that if the purpose of the gift is to create some expectation of a “favour” in return for the gift, then it more than likely isn’t a gift.

Timing is also important

Are you on the edge of closing a deal with a customer that if secured, would increase your bonus? Or, are you being offered a gift shortly before or during a tendering process? It is not just giving but also the accepting of gifts that could be punishable under law.

Consider whether the gift is appropriate and proportional to the level of the receiver.

What constitutes an over-the-top gift can be difficult to judge. For example, the duties of senior staff may require them to attend or sponsor events where hospitality is generous.

What may seem minor to a senior manager could be significantly more valuable to a junior employee. Sometimes, the exact value of a gift can be hard to determine.

There are also cross cultural considerations such as widely differing currencies and exchange rates that give a different perception of gift value.

Pick the person

Who is the gift for?

Giving gifts to certain persons, for example public officials, is often thought of as a facilitation payment and arouses suspicions. However, definitions of what constitutes a public official can vary.

In many countries, it can be difficult to tell the difference between an employee in a state owned enterprise and a member of the government who is also working within the state owned company.

A principle sometimes used to decide what is a fitting level of gift giving, is that of reciprocity, ie if I accept an offer, am I able to offer the equivalent in value in return?

If the answer is “no”, then it may be seen as an attempt to buy favour and it is advisable not to accept.

How can companies support their staff?

Many companies take a zero tolerance approach to gift giving and receiving. However, this isn’t always the most practical approach and can mean employees find themselves in awkward situations having to publically decline a gift.

This is particularly true for employees of multinational companies operating in countries where gift giving is an important cultural tradition and instrumental in building relationships.

Some companies have opted not to implement a global ban, but rather have set out a locally determined limit for the value of gifts that may be given or received.

Additional policies might be put in place when it comes to public officials, such as lowering the value limit on gifts or requiring employees to obtain management approval, regardless of the value.

Clear policy on gift giving

Employees need guidance with company policy of gift giving or accepting gifts.

This includes seeking approval from their line manager or someone more senior and recording it in a hospitality register. Sometimes gifts of a higher value may be required to be donated. Gifts of high value can be auctioned to raise funds for charity.

Guidance is usually found in a company’s policy. This will outline the company’s position on gift giving and what defines gift giving, setting out good practice for employees.

A policy on giving and receiving gifts needs to be consistent with all other aspects of a company’s ethics programme, to encourage high standards of integrity regarding decision-making and behaviour.

So, gift giving and receiving doesn’t need to be an awkward or suspicious occasion, rather a relation-building exercise. It just needs to be approached in a sensible and ethical manner.
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