It’s the season again when we exchange
gifts to show gratitude and cement relationships. However, the subject
of gifts and hospitality brings with it a number of ethical challenges,
as there is a thin line between a gift and a bribe, a line that must not
be crossed. In a previous article, I explained that you could
categorise a commercial organisation’s success-imperatives into three
buckets: People, Performance (as in brands/ service offerings) and
Reputation. These imperatives I said must be managed like a tripod with
three “legs” – none of which must be broken. Today my emphasis is on
this third “leg” of Reputation.
The “righteousness” of gifting lies in
the intent or spirit of the gift. If the intent is to say thank you, and
the value of the gift is reasonable, then it may be found acceptable in
some quarters or by some organisations. Similarly, if the gift is to a
person who ordinarily can conveniently afford that gift and even has the
capacity to reciprocate same and there is no ill-intent, some
organisations would wave it away as acceptable (again depending on the
financial size of the gift). If on the other hand, the intent is to
influence or induce improper conduct – in a business-type relationship,
you’ll question whether that is truly a mere gift. Buying a Range Rover
for a procurement clerk in an organisation you do business with, for
example is nothing but a bribe or facilitation payment.
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Most multinational companies have zero
tolerance for facilitation payments to anyone, but worse still to public
officials. They would strongly kick against cash under any
circumstances, but would sometimes accept a gift in kind at a set limit
of value. Crossing that limit immediately raises a red flag. I have
worked in an FMCG where the limit was USD equivalent of N12, 500 at the
time. This was particularly difficult for some Africans to reconcile,
given that we are in a culture where we tend to provide “social” support
to one another where needed e.g relative’s wedding or funeral events
and most times in excess of that limit. The bottom line is that the
giving and receiving parties must be able to gauge where to draw the
line.
For global companies, the standards on
ethics and compliance aren’t different from country to country. The
reason is simple – a breach in one country, no matter how small or
remote the country is, does not exonerate the company from its
liability; as a company is only as strong as its weakest link. They are
usually clear about their core values and guiding principles. Guidance
is provided in their code of business conduct that includes a gift and
hospitality policy, which may entail certain levels of employees
maintaining up-to-date gift and entertainment registers. Additionally,
every “modern” organisation has a speak-up helpline which employees can
dial into to report suspected cases of code breaches, without fear of
intimidation or victimisation; whether identified or anonymous.
The subject of governance cannot be a
mere propaganda. It is the leader’s responsibility to embed a zero
tolerance culture. When it comes to doing the right thing, a leader does
not need to seek people’s approval of who he is. Governance must cut
across the fabric of the organisation and even extend to the employee’s
behaviour in and out of the office. When it comes to matters of ethical
practices, the ultimate validation of an allegiance to what is right, is
the employee’s ability to sub-consciously do the right thing (i.e
without having to think about it) in the same way you wake up in the
night to use the toilet, eyes half-closed and yet no “mis-hits.”
In many companies, accepting individual
gifts during the festive seasons like Xmas is completely discouraged.
Gifts are either returned to the sender politely, with a “thanks but no
thanks” letter or put into a pool and shared with all staff at year end,
such that back office staff, who have no access to contractors, do not
feel “disadvantaged” versus those in customer or vendor-facing roles
such as marketing or procurement. This minimises the risk of gift
inducement as well.
That said, some employees have devised
ways of beating these controls. I discovered at an FMCG that despite our
tough stand against accepting “expensive” gifts, from vendors, you
would see some employees disclosing and displaying, say, a box of
chocolate in the office as the gift from a supplier, but would not
mention to you that the same supplier had gone to tie a massive cow in
his house as the main gift. We also had cause to investigate some
employees in the past only to discover large sums of cash paid directly
into their wives’ accounts by vendors. In their thinking, the company
could investigate their own accounts but not their spouses’ accounts –
which they got wrong!
In closing, companies must be able to
correlate a strong reputation with great commercial performance.
Investors are increasingly demanding exemplary governance from
management to assure the safety of their funds. I am aware that some
banks have such strong cash deposit base and balance sheets primarily on
account of customers’ trust in their governance processes, and safety
of their cash. A bank in this category would not need a whole floor of
marketing personnel as their reputation is their best marketer. Such
banks benefit from low labour cost, high interest income and strong
profitability; as against a bank that must recruit thousands of
marketers to help “dry-clean its dirty linen”
The private sector must create more
pragmatic and visible leadership in shaping the ethical destiny of
Nigeria. It is when this happens that we will truly transform the
reputation of Nigeria. Like a former USA Secretary of State, Hilary
Clinton, once said, “what Nigeria (Africa) needs is not more strong men;
it needs more strong democratic institutions that will stand the test
of time. Without good governance, no amount of aid or effort can
guarantee Nigeria’s (Africa’s) success; but with good governance,
nothing can stop Nigeria (Africa).”
Merry Christmas
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