Not too long ago, companies handing her several bottles of wine worth US$300 as a Christmas gift was not unusual for Brenda Bayer, CPA, CGMA. Less than five years ago, however, the company she has worked for in different roles the past decade rolled out a detailed and explicit corporate gifting policy.
She emailed companies about the policy change when it took effect. “Now, I hardly get any gifts anymore,” she said.
That makes her most recent job at the company much easier. As head of HR, IT, procurement, and shared services for the North American unit of Engie, a French multinational electric utility, Bayer cannot receive or give gifts at all.
For anybody in Engie’s procurement team, giving or receiving gifts “creates the wrong perception and compromises the team’s independence in searching for vendors,” she said.
Gifts vs. bribes
Most companies, especially multinationals such as Engie, have long had anti-bribery policies. Corporate gifting is not synonymous with bribery, of course. Still, corporate gifts should be carefully evaluated.
With the holidays approaching, businesses should consider implementing gifting policies regardless of company size. For those with a policy in place, this is the time to remind employees of best corporate gifting practices.
“Expressing appreciation to customers can be fine, but you have to know that in today’s context, gifting is viewed with caution,” Bayer said. “Companies are challenged to appreciate customers without crossing boundaries.”
Generally acceptable gifts include items of nominal value bearing the company logo, meals, and perishable gifts, according to an article by wire agency Thomson Reuters. Not acceptable are, for example, gifts to government officials, requests for charitable donations, and lavish gifts.
At Engie North America, any gift valued at more than US$30 requires approval from a member of the executive team and documentation before it can be received or given, Bayer said.
To enforce a corporate gifting policy, compliance officers need to ensure the guidelines are effectively communicated to employees, according to Thomson Reuters. Also helpful, Bayer suggested, are leadership oversight, occasional internal audits, and more frequent spot checks in countries where bribery and corruption are a problem.
Gifting policies vary from company to company, and there’s no one-size-fits-all approach. Thomson Reuters recommended these seven best corporate gifting practices:
- Ensure a gifts-and-entertainment policy is in place, no matter how small the business.
- Designate gifts-and-entertainment approvers who can interpret and make decisions according to the company’s policy.
- Implement a cost threshold. Any gift that surpasses the set price point must be approved by a designated manager. Typically, US$100 to US$250 is a relatively standard threshold, but this differs across countries.
- Implement a widespread tracking system to record gifts given or accepted.
- Get prior approval for any gifts to a government official, compliance officer, or senior executive.
- Consider capping the number of gifts given to a single individual in a year and, similarly, the number of gifts an employee can accept.
- Never accept cash gifts or anything that could impact a business decision, such as obtaining or retaining a business advantage.
About the Author
Sabine Vollmer is a Senior Editor at CGMA Magazine, a publication of the Association of International Certified Professional Accountants, which offers the Chartered Global Management Accountant (CGMA) professional designation. The association is a joint venture of AICPA in the US and CIMA in the UK. Click here to subscribe to the weekly newsletter CGMA Magazine Update.