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Business compliance: gifts from suppliers

50 posts in this topic

13 hours ago, MikeMelga said:

The order came from Japan, but I am unaware on how this should be enforceable here.

 

30 minutes ago, MikeMelga said:

Although we are a separate entity, we belong to a very large Japanese corporation. This is a group policy.

 

30 minutes ago, MikeMelga said:

Still, I accept dinners (I have to!) from customers and business partners in Asia, so this puts me in a strange situation.

 

Have you considered asking headquarters for clarification? I would think that a Japanese company would understand the cultural offence that can be taken from refusing a partner's hospitality and would have made arrangements (I.e. requiring you to include it in a report). 

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In the compliance documents I've seen, participation in dinners is allowed as long as

  • Conducting business is the primary purpose
  • The expenditure amount isn't "excessive" given the circumstances (the interpretation of this is rather loose)
  • (Ideally) You're not the only one from your company/group being catered

In contrast, if you're given an expensive bottle of alcohol or writing utensil, etc. during the meal, you're expected to politely decline or, if denial might be considered impolite, you need to report it and surrender it to HR/your supervisor/your compliance officer ASAP.

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What El Jeffo said reflects the policy at our company.  And as Krieg said, you do need to keep track as this can be used against you, up to and including termination - but only if you're not Megalomaniac Mike...

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58 minutes ago, Krieg said:

You have to be extra careful with travel expenses because a mistake can be used to sack you in the future if one day they decide you are not needed anymore.

 

I would second that warning.  Its said that if any company wants to get rid of a salesman or manager they only have to examine his last expense claim or two & will surely find something (many managers don't have the time to do expenses & get their secretary / assistent to do the task for them).

 

I was neither in sales nor had a management position but I was very careful with expense reports.

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My former manager always went to the Wiesn as he was invited by a supplier, but when compliance was implemented on a deep level, he didn't go there anymore since he had to fill in forms and get 2-3 approvals. This was about 2 Mass and 1/2 chicken. 

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5 hours ago, engelchen said:

Have you considered asking headquarters for clarification? I would think that a Japanese company would understand the cultural offence that can be taken from refusing a partner's hospitality and would have made arrangements (I.e. requiring you to include it in a report). 

Yeah, I will clarify with HR and head of sales first.

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3 hours ago, LukeSkywalker said:

My former manager always went to the Wiesn as he was invited by a supplier, but when compliance was implemented on a deep level, he didn't go there anymore since he had to fill in forms and get 2-3 approvals. This was about 2 Mass and 1/2 chicken. 

And that´s the thing! I always have 2 invitations to Wiesn from suppliers. But when I´m there, I talk with lots of guys from those suppliers and get information that I usually don´t get during normal meetings. Is this a bribe?

Not only that, in some events we do some company networking, i.e. we get to know other companies, we feel the market in some informal talks.

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The value of 2 Mass and 1/2 chicken is like €35, so that's not extraordinary, but if you're invited to a high-end restaurant (e.g. 2-star Michelin) this could be seen as a bribe and compliance violation. To be on the safe side, you should inform your corporate compliance officer and ask for guidance.

 

PS- I actually worked on a compliance IT project on customer side with the complete spectre incl. alerts, segregation of duties, mitigation and escalation to CFO level. It's getting more and more important after several scandals of DAX-companies in the last decade.

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16 hours ago, Krieg said:

There are no legal consequences beyond being sacked for not following the ethics policy of the company.

 

All of the companies I work for as an employee and all the companies I worked with as a consultant had a zero tolerance for gifts of any kind.  None.  Zero.

 

If your competitor discovered that you received a gift from a supplier, that could be considered a bribe and your company could be sued.  The amount doesn't matter.

 

Any company that has a single critical employee (blackmail comes to mind) is a dangerous and poorly run company.  If anything, I'd worry less about dinner and more about firing management for incompetence.

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10 hours ago, LukeSkywalker said:

...

 

PS- I actually worked on a compliance IT project on customer side with the complete spectre incl. alerts, segregation of duties, mitigation and escalation to CFO level. It's getting more and more important after several scandals of DAX-companies in the last decade.

 

But like most things in life, the problem is caused by a few people who abuse the situation.  And it is a bit like using a hammer to crack an egg. 

 

My current company, which is very large and operates worldwide, has very strict policies in place.  Yet I know senior managers who have ignored it, and they are rewarded with a good bonus (hitting targets) and promotions!  And even if they are discovers later and "moved on", then are often pushed out with a package, a good reference.  So they easily get a new job.

 

My previous company, medium-sized German company, actually refused to do business with one customer because he asked for a bribe.  Even though, it would have been beneficial for us to do so, and it was a perfectly accepted way of working in that country.

 

And I do feel sorry for companies who work in situations where if you don't "oil the machine" then your competitors will and you lose!  It might not be right, but if you want to compete what choice do you have?

 

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1 hour ago, dj_jay_smith said:

My previous company, medium-sized German company, actually refused to do business with one customer because he asked for a bribe.  Even though, it would have been beneficial for us to do so, and it was a perfectly accepted way of working in that country.

There are countries where it is absolutely impossible to do business without bribing. Angola is one example.

I have a curious story of a friend working in an unnamed European country that tried to business in Angola (Oil & Gas). The whole project was delayed for 6 months because they could not understand what was going on, their permits were being refused! Eventually they realized that they had to bribe the authorities. First they refused. Then they accepted, because they were losing $300.000 per day!

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13 minutes ago, MikeMelga said:

There are countries where it is absolutely impossible to do business without bribing. Angola is one example.

I have a curious story of a friend working in an unnamed European country that tried to business in Angola (Oil & Gas). The whole project was delayed for 6 months because they could not understand what was going on, their permits were being refused! Eventually they realized that they had to bribe the authorities. First they refused. Then they accepted, because they were losing $300.000 per day!

 

Exactly!

There are some many similar stories from that part of the world.  But even in Europe it is expected.  My example was from a European country.

 

A Greek friend even once told me that they calculate to have to spend up to 1 months salary per year in order to ensure that their experience with the medical profession, city authorities etc. go smoothly and without and problems!

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So, these stories are exactly why compliance should exist, and with legal consequences for non-compliance. These practices need to be stamped out.

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13 minutes ago, theGman said:

So, these stories are exactly why compliance should exist, and with legal consequences for non-compliance. These practices need to be stamped out.

 

I agree.

 

But what can you do when you won't play ball and, like @MikeMelga says are losing 300k a day due to "hold ups".  Or when you know your competitor will pay!

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4 minutes ago, dj_jay_smith said:

 

I agree.

 

But what can you do when you won't play ball and, like @MikeMelga says are losing 300k a day due to "hold ups".  Or when you know your competitor will pay!

 

It's the same as anything, two wrongs don't make a right. Don't do business in Angola. Report your competitors. If it has to stop, then it has to start somewhere.

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20 minutes ago, theGman said:

 

It's the same as anything, two wrongs don't make a right. Don't do business in Angola. Report your competitors. If it has to stop, then it has to start somewhere.

 

I also agree with this.  And BTW: I would never get involved in such things.

But, while business is still striving for "growth" and everything is about profit, then the rest becomes not so important.

 

The business world needs to shift away from measuring success in terms of pure growth and profit and consider other factors.  The stock market and traders and driven purely by this.

 

The Triple Bottom Line is one alternative which I read about many years ago, but it doesn't see to be popular.  Most companies are building momentum in other areas, but not yet measuring success by it.

https://en.wikipedia.org/wiki/Triple_bottom_line

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1 hour ago, dj_jay_smith said:

I also agree with this.  And BTW: I would never get involved in such things.

But, while business is still striving for "growth" and everything is about profit, then the rest becomes not so important.

 

Bingo. It's exactly this. If Mike's company goes under because they didn't give bribes in Angola then it's a shame for the job losses but there is a bigger picture here. But every economy is built on this system so it's gonna be damn hard to change. But it's not a sustainable model so it will have to change somehow.

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1 hour ago, dj_jay_smith said:

The business world needs to shift away from measuring success in terms of pure growth and profit and consider other factors.  The stock market and traders and driven purely by this.

 

We will reach some sort of development recession, because since long time ago companies are managed by finance guys who care only about numbers so we are not investing enough in R&D.  Most things we do nowadays as "R&D" is improving existing things and real innovation is very seldom seen.   The only thing that can save us from this is big enough market disturbance from smaller players who bring new things to the table.

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4 minutes ago, theGman said:

 

Bingo. It's exactly this. If Mike's company goes under because they didn't give bribes in Angola then it's a shame for the job losses but there is a bigger picture here. But every economy is built on this system so it's gonna be damn hard to change. But it's not a sustainable model so it will have to change somehow.

 

Not sustainable?    It is how business has been done since humans descended from the trees.   

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8 minutes ago, theGman said:

 

Bingo. It's exactly this. If Mike's company goes under because they didn't give bribes in Angola then it's a shame for the job losses but there is a bigger picture here. ...

 

Which I agree with in principal.

 

But if you are the head of a company and you have a choice, which would you do:

 

fire 100s or 1,000s of people and close down the company

or

pay some guys a few thousand (or much less in places like Angola).

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