Santa Claus is coming to town...

Christmas is traditionally a time for present-giving and most people will be looking forward to giving and receiving lots of goodies from friends and families.  Some people will also be expecting to give and receive presents at work, and here I’m not talking about gifts to colleagues (which are great), but rather gifts to customers or presents from suppliers.

Both types of gifts (- the “friends and family” ones and the so called “corporate gifts”) appear similar – they are after all seasonal expressions of goodwill to people you know – but there are crucial differences.  The friends and family ones:

• are generally reciprocal, 
• are not given with an ulterior motive and, crucially, 
• are paid for personally by the giver. 

The same cannot be said of the corporate gifts which are usually one way, have an obvious motive and are claimed on expenses.

So, what’s wrong with the corporate gifts?  For me, just about everything:

• firstly, there’s a clue in the name – if the gifts are “corporate” they should go from one company to another company, not to that company’s employees, and certainly not to individual employees who happen to have buying power;
• secondly, there’s the motive – if you are trying to influence the recipient, surely that’s wrong?  And if you are not trying to influence the recipient, how is that an appropriate use of shareholders’ funds? 
• finally, gifts of all kinds will be an increasingly sensitive area once the Bribery Act comes into force.  As long ago as 1997, a Law Commission report examined the old question of corporate hospitality and concluded that if a company’s directors took a customer to a football match it was probably okay, but if they simply sent him “a ticket for the match with their compliments, it would be hard to resist the inference that this was primarily (if not exclusively) a bribe.”  Surely the same logic applies to Christmas gifts?

To avoid the risk, givers need to be sure their generosity is not misconstrued.  Receivers need to:

• have a gifts policy which is posted on the external website and enforced – say what is fine (eg branded biros, calendars and mousemats) and what isn’t (eg cash and cash equivalents, gifts delivered to home addresses etc); 
• remind/train all staff and inform all suppliers about the policy; gifts are to be discouraged unless clearly at odds with local culture;
• record all gifts in a register – those which breach the policy should be returned or given to charity

Sorry to be a Scrooge, but all in all, 2010 is a year for extreme caution.  Or as the song goes, “You had better be good for goodness sake!”

I would welcome any comments you have on this topic.

Edwin Harland

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