Ethical Dilemma in Business Gifts: Giving or Bribing?

The premise of gifting is the ancient way of expressing gratitude, respect, and love. Giving gifts in itself is fairly harmless and is based on a philosophy of reciprocity that is usually expressed in phrases like “what goes around comes back around”. While gifts are often given as a voluntary gesture, overly generous business gifts put pressure on the recipient, so it’s no surprise that the line between sincere giving and bribery is becoming increasingly distorted. Many entrepreneurs therefore prefer to avoid giving business gifts – but with knowledge of the law and understanding of the circumstances, they would rarely encounter a difficult situation regarding gifts.

Gifts, no matter their value, can create unwarranted prejudices. So what are gifts and what are bribes? Defining gifts and bribes may seem simple, but you will see that this is an understandable concern in business and professional ethics: What is the difference between a gift and a bribe? A gift is something of value, given without expectation of return; bribery is the same thing given in the hope of influence or benefit. Gifts and bribes can be cash, real items, or tickets to a sporting event, party, travel, golf course, or restaurant meal.

Even if we agree that giving a bribe in order to influence a decision or outcome is wrong, it is increasingly difficult to decide where to draw the line between permissible and inadmissible act. Sometimes accepting these gifts and benefits can be an appropriate part of a business relationship. In some situations, however, accepting them can be a serious violation of business and professional ethics and perhaps even a violation of the law.

So, what are the laws of gifting?

Policies and practices regarding the handling of gifts and invitations to special events vary from company to company. For some, the potential damage to the organization’s credibility is not worth the risk and they forbid all gifts to employees except personal gifts from friends and family. Other organizations accept gifts, but when they do, they give them to a nonprofit. Then there are also some organizations where received gifts need to be reported and this is kept in the registers. In other organizations, unwanted gifts are shared with all employees. If everyone benefits equally, this can reduce the perception that the gift was intended to influence the action of a single employee.

South Africa has come a long way in resolving the distorted line between business and bribery. For this purpose, the Prevention and Fight against Corrupt Activities Act no. 12 of 2004, which replaced the Corruption Act of 1992. The Act extends its application from the offices of corrupt public officials to the private sector and other entities. The law clearly criminalizes the demand for monetary and non-monetary gifts, consent or the offering of monetary and non-monetary gifts. Failure to report acts of corruption carries a maximum sentence of 10 years in prison.

The following questions can guide you in thinking about your company’s approach to this topic:

• Does your company have a code of conduct or a policy on gifts and participation in social events related to employee-oriented work? Is it clear and appropriate?
• Are there other ways to recognize the value of employees without exposing them to potentially embarrassing situations?
• Will your co-workers, other vendors, stakeholders, company shareholders or the general public evaluate your participation in the event positively?
• Does your company have a training, awareness or mentoring program to equip staff at all levels with an internal approach to ethics based on values ​​and principles? An inside-out approach will help staff discuss and understand the importance of ethical behavior from a personal and organizational perspective.

Giving gifts or doing favors to influence results and without transparency of your intentions ultimately undermines trust in business relationships – whether it’s your business or outside of it. If you are a giver, find out what gifting policies your target companies have. When dealing with organizations from different countries, find out what their gifting customs are. Find out what you would appreciate and appreciate and what might be offensive. You will show that there was a lot of thinking in the gift. Gifts that would remind the recipient of your country would be appreciated. Find out what is written in the code of ethics of your target organization or profession.

There are codes of ethics for auditors, accountants, doctors, lawyers, government officials, pharmaceutical companies, journalists and most other professions. You will avoid embarrassment and unnecessary costs by researching what these codes of ethics are. Work hard to build credibility and trust among your co-workers, other companies you do business with, and most importantly, shareholders. Credibility and trust in your company’s practices are based on responsibility and appearance. If accepting a gift or attending an event at someone else’s mercy undermines your credibility or creates an appearance of inadequacy, don’t do it!