February 5th, 2011
Should Attending The Super Bowl Be Off Limits?
Best Buy Ethics, by Kathleen Edmond.I recently sent my annual e-mail to Best Buy leaders reminding them we are not allowed to accept gifts from vendors; specifically at this time of year, discussing tickets and travel to the Super Bowl. The policy does recognize that when there is a legitimate business purpose related to the event, e.g. focused time spent with a key strategic business partner, or to experience first-hand the impact of an advertising campaign, it would not be considered a gift and might very well be the right invitation to accept. Even then, the trip must be pre-approved by an independent senior executive of the company. Because there is some level of discretion in the policy, it means that we need to continue to have the conversation, and be transparent internally and with our vendors.
I get questions from employees at every level of the company about how to comply with the policy and avoid damaging their personal brand or the company reputation. Although employees sometimes get confused or frustrated by this policy and the approval process, I find that the overwhelming majority really want to do the right thing.
My questions to you: Do we make this unnecessarily complicated? Why is the gifts and business entertainment policy so important to Best Buy?
1) The official reason for curtailing vendor entertainment is to ensure Best Buy’s independence in both fact and appearance. Do you think this is really necessary? After all, what’s the harm in allowing someone to go to a football game?
2) Some people argue that vendor gifts and entertainment are meant to influence, and therefore no exceptions should be allowed, regardless of business purpose or the strategic nature of the business relationship. Do you agree or disagree?
3) What about an employee who elects to pay his or her own way, so to speak, by writing a check to a company charity? How is this different or not different in your opinion?
4) Have you ever been on the giving or receiving end of extravagant, or very generous business entertainment? If so, did you feel an obligation to/from your business partner afterward?
Companys often emphasize that the employees should comply with gift giving policy, since FCPA is so tough, however, gift accepting (what kind of gift can be reasonalbe, what kind of procedure should be followed) is often ignored in China. This article raised a very significant point–sometimes frauds generate from the gift accepting.
Adam makes an excellent point about inconsistent policies on giving vs. accepting gifts. When I was an in-house ethics counsel, I marveled at the double standard: e.g., vendors offering our employees entertainment that the vendors barred their own employees from accepting.
The third complication is when there is a prohibition, or limit on gift exchange between employees and vendors, but then asks employees to solicit vendors for contributions to its charity or internal events. How should that be handled?
I see two common problems with gift policies:
1. Even seemingly simple, absolute ones have challenges. No gifts means no gifts, but if you show up at a conference and the bag with materials has pens and other giveaways, do you have to turn them in?
2. Companies often have inconsistent policies. On the one hand they may ban accepting gifts, but their sales team is busy giving them away. What kind of message does that send to employees?