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       ARTICLE

Is that gift a ticket to bribery?

12 June, 2010

JOBURG: World Cup tickets are the most sought-after gift in South Africa now, but for the corporates that give them there is a thin line between giving a gift and a bribe.

"Most tickets being bought at great cost by companies are not for the purposes of entertaining their own employees. These sought-after slips of paper are being purchased as gifts for valued clients - something of worth given without any expectation of return perhaps, a gesture of thanks for a cordial working relationship. But it can pose corporate governance challenges," says Liza van Wyk, CEO of business training organisation, AstroTech.

"By far the majority of the tickets given as gifts will be a normal part of corporate giving to esteemed clients. But while a gift is given without expectation, a bribe is the same thing given in the hope of currying favour for purposes of future influence or benefit.

"Because it is practically impossible to figure out the expectation of the giver, it's wise for both public and private sector employees to adhere to corporate governance or parliamentary rules that restrict gifts. These vary from disallowing gifts over a certain amount to requiring simply that they be reported," Van Wyk said.

Some years ago, when faced with allegations of widespread corruption and kickbacks, Siemens AG started disallowing any type of behaviour that could facilitate what was then an industry-wide wink-and-nod culture.

For example, sales representatives were no longer allowed to go golfing with doctors they hoped to do business with.

Says Van Wyk: "Companies know they have to comply with the King 3 report as well as general company law, but they are questioning what corporate governance entails and how it is implemented practically."

Van Wyk said AstroTech's corporate governance courses were consistently full. "The rules have become more complex over time and they now even cover environmental responsibility. But gift giving remains one of the trickiest areas for corporates to negotiate.

"Each organisation needs to decide for itself exactly where the line will be drawn."

Corporate governance also includes aspects like broadbased black economic empowerment; staff training and development; worker health and safety statistics; HIV/Aids prevention plans; air and water pollution; and energy and water consumption.

"It may well be true that a ticket to the game or bottle of wine will not influence a trusted employee's future decision regarding business but many organisations will not allow employees to accept any gift, not even a calendar.

"Many gifts with the company name on it are clear marketing tools. But cash or money transfers can never be seen as a legitimate corporate gift nor cars, house loans or many other high-value items - and some World Cup tickets fall into that league," Van Wyk warned.

She said it was important for businesses and the government to stress that "ethics are important".

"Employees must report gifts to their supervisors. Any gift from someone wanting to do business is intended to exert an influence. Even if the gestures don't succeed in swinging the vote or securing business, accepting them can give the appearance of 'being on the take', which undermines confidence.

"That is why it's so important right now for companies - and the government - to review their gift policies, educate employees regarding them and commit to adhering to them," Van Wyk said.

Overall, the essence of corporate governance attempted to achieve balance, she said. This was the balance between social and economic, individual and communal goals, as well as the often conflicting interests of individuals, corporations and society.

In South Africa, King 3 covers business best practice, including corporate citizenship, audit committees, risk management, internal audits, integrated sustainability reporting and disclosure, as well as compliance with laws. - Sapa

 

SOURCES:
Is that gift a ticket to bribery? - Cape Argus