The ethics of corporate gifting: how not to get yourself in trouble

Imagine going into a meeting with a potential U.S. investor, and slowly sliding a bottle of expensive whisky across the table? The meeting hasn’t started yet, but you’ve sure set the tone: it’s an awkward one, and you’ve likely gotten yourself into a sticky situation. Your whiskey seems like a bribe.

Corporate gifting etiquette varies around the world. In Japan for example, gifts are always expected when doing business, and gifting whiskey would be just fine.

But in the U.S., corporate gifting has a lot of formalities. While a gift is used to say thank you, and a bribe is used to persuade, there’s still a fine line between the two. Offering the wrong gift at the wrong time could put your company in the spotlight. Here’s how to not get yourself in trouble.

It’s not just big companies that get caught

Bribes are big business in the corporate world — it seems we’re always hearing about large corporations being investigated for, or accused, of bribery.

Just at the end of March, authorities in the U.S., Britain and Australia launched a joint investigation into Unaoil, an oil industry firm being investigated for bribery to win contracts. Hundreds of corporations around the world used Unaoil to secure contracts with countries in the Middle East, Africa, and the former Soviet Union — and leaked files show Unaoil was making it happen by paying millions of dollars to corrupt officials.

But it’s not just big corporations that get caught in the middle of bribery accusations. Smaller companies get caught, too. In the U.K., two former employees of a technology firm Sarclad were charged by the U.K. Serious Fraud Office for offering money to secure contracts in the metal industry. On Sarclad’s website, they list less than 30 employees.

The people involved in these cases likely knew they were engaging in bribery, but it’s not to say it can’t happen by accident–or rather, through ignorance of simple misunderstanding.

More than half of small businesses in the U.K. said they hadn’t assessed the risk of bribes, even through the U.K. Bribery Act was released in 2010, the same act the employees from Sarclad were charged under.

Walking the line: how to know the difference

Gifting should be about showing gratitude, and not about getting gains. It’s OK to say thank you with flowers, dessert or cash bonuses to employees. But it’s when gifts have motives that companies, or the individuals within them, begin to tread in murky waters.

To stay in the clear, it’s important that companies have a corporate-gifting policy that addresses both giving, and accepting gifts. This Inc. article outlines Edible Arrangement’s own corporate gifting policy — the fruit-gifting company often receives its own product as gifts.

At Edible Arrangements, gifts worth more than $50 must be reported, to make sure lavish gifts don’t influence the company’s decision making.

The company also requires its clients to sign a contract in order to ensure they understand the dollar limit and policy, and to stress that communal gifts to share in the office–even their own fruit baskets — are better than personal ones.

It’s also important to gift the right time. Don’t give an employee a gift before asking them to do a big favor. Don’t give gifts to client before attempting to secure contracts with them.

If you genuinely want to say thank you, you must wait for the right moment — and be sure that the gift is not so valuable as to call your motives into question.

But here’s the difficulty

Any gift is likely to influence the way someone feels about the company — even small ones. A study cited in this New York Times article shows small corporate gifts affect doctors’ decisions.

Medical students who used notepads and clipboard gifted by pharmaceutical companies were likely to have a more favorable attitude toward the pharmaceutical companies’ drugs. Medical students who weren’t allowed to accept the promotional materials were more objective, as no significant effect was observed.

Although gifts can change a doctor’s behavior, it’s not to say they’re unethical. According to Christopher Myers, California State University professor of physiology, it just means they’re human.

“Our instinctive reaction is to feel grateful upon receipt of a gift and also feel like we should return the favor,” he writes in this VPR article. “Further, unless we strive to overcome that natural reaction, we will most likely act accordingly.”

Gifts will always have some sort of influence. But it doesn’t mean they’re bribes. They can help propel your company forward, ethically.

So what to gift? Gifting that demonstrates company social responsibility is a good idea for example, like gifting money to charity on behalf of the recipient. This proves your company has high ethical standards, increases the likelihood of positive public relations and is likely to never seen as a bribe.

Another corporate gift idea is one that’s experienced-based. These leave the recipient with a lasting emotion that he or she later relates to the company that provided it. Giving a 10-year client an evening cruise to share with her husband is something she will likely remember forever, thanks to your business.

After all is said and done, corporate gifting takes a lot of thought — it’s necessary to gift appropriately and at the right time. In this, it’s important to stay transparent and set gifting guidelines, so no one is caught sliding whisky across the table at an investor’s meeting.

Linas Ceikus is the founder of Tinggly.com, a team of international gift experts who have come together to change the way we gift.