IT’S a scenario any self-respecting business journalist fears – a possible threat to corporate hospitality, writes David Tooley.
There’s a new wide-ranging Bribery Act coming into force on July 1 and it will need to be taken seriously by everyone from the one-man band electrician to the largest company in the land.
So I must admit to breathing a sigh of relief when lawyers Sarah Empson and Kate Stevenson, of solicitors Taylor Walton, told delegates at West Herts Business Breakfast (WHBB) that the end of reasonable informal hospitality wasn’t on the cards.
The WHBB briefing at the Bobsleigh Hotel, Bovingdon was fully booked up by local businesses keen to know how the wide-ranging new law would affect them. It wasn’t just me worried about not getting invited out to waistline- expanding lunches any more.
The act replaces laws going back to 1889 by bringing them together into four specific offences and adding a little bit more on top.
What’s new is an offence of a failure to prevent bribery which could see company directors jailed for 10 years, receive unlimited fines and be disqualified from being a director for up to 15 years as well as the destruction of a firm’s reputation.
And it’s not just employees that companies need to be worried about. Agents, subsidiaries and people carrying out work on their behalf could also bring untold problems.
And if at least a little bit of a bribery offence is carried out in the UK by a firm working abroad, expect the law to come down like a ton of bricks.
Taylor Walton corporate lawyer Kate Stevenson said the only defence companies have in law is to have ‘adequate procedures’ in place to prevent bribery. But worryingly she added: “The act does not describe what is meant by adequate procedures.” She urged delegates to read the ‘well written’ guidance on the Ministry of Justice website.
It is also not clear how enforcement will be targeted. It may well be that bribery investigations will be directed at the biggest cases, but it is not possible to tell, delegates were told.
But one thing is for sure, companies that do not prepare for the new law would be wide open if anything untoward takes place.
Taylor Walton employment lawyer Sarah Empson said firms should be taking the Bribery Act seriously by appointing a compliance manager, adopting and regularly reviewing policies and risks. Large employers might also consider regular training and setting up a helpdesk.
She has recently advised a client on adopting a policy on corporate hospitality.
“Corporate hospitality is not banned,” she said. “There is nothing wrong with, as Kenneth Clarke says, encouraging cordial relations but there is a question about where the boundary lies.”
She said the keys may be how lavish the hospitality is and when it is given. Flying clients off to the Alps or New York around the time when a big contract is being awarded could raise eyebrows.
The Bribery Act will also have ramifications for recruitment, contracts of employment and in-work policies and procedures.
Sarah Empson said: “Companies should carefully check people’s references to make sure they are who they say they are and that they have done what they say they have done.”
So from my point of view, it looks like there will at least be more bureaucracy involved before I can accept that trip to Wembley or Twickenham – or even a lunch paid for by a PR executive.