Our team had been selected and invited to the final with two other competitors.
We had rehearsed our presentation and spent hours of preparation over the last week crossing the ‘t’s and dotting the ‘i’s of their comprehensive and extensive RFI and RFP documentation.
On our way back home, our pitching team stopped off for a late lunch at a motorway service station. I was bought lunch by my client.
OK it was not oysters and caviar washed down with a bottle of Veuve Cliquot at some 3 star Michelin swanky restaurant but a delicious ‘street wise lunch box’ of Kentucky Fried Chicken that also included an ice cream - "so good!" as the KFC logo states.
But what if I had offered to buy the other three members of the pitching team their lunch? - who can by the way, potentially give me work if they choose to offer the training part of this potential contract- would I fall foul of the law?
Listening to BBC radio 4 the next day ( July 1st) there was an interview between John Humphreys and Vivian Robinson who is General Counsel for the UK Serious Fraud Office ( SFO)- I realised the new Bribery Act had come into force.
Mr. Robinson explained that the new Act is a corporate law. The OECD and other international bodies have applied pressure to the United Kingdom to revise its laws some of which stretch back over a century and do not reflect the current seen in global business.
Failing to prevent bribery to gain systematic advantage over one’s competitors will make not only individuals but businesses liable under the new act.
Mr Robinson explained that the new law has "massive jurisdictional reach” across business across the world. Also international companies can become liable if part their organisation works in the UK.
Firms will need adequate procedures in place to prevent crossing the legal boundaries set by the act.
BBC’s John Humphreys then in a light-hearted way asked if firms offered "say a lavish dinner, offer a client the use of their private jet or a fortnight’s holiday" would such things fall foul of the new legislation?
Mr Robinson stated he wished to dispel what he described as the ‘myth’ on reasonable and bona fide corporate hospitality.
The SFO will first be considering what is in the Public interest. They will look for clear policy on such expenditure and gifts. So long as the expenditure “ fell within the ambit of the policy” ( I had to check what ambit means - ) it will be accepted.
It will be about using common sense.
Companies will need to exercise an appropriate action over such areas. However when the link of hospitality to contract awarded could be traced -this might well cross the boundary. ( Should I be choking on my KFC lunch?)
There is an old joke that describes the three lies in business
1. "The cheque is in the post"
2. "IBM compatible"
3. "Good morning , I’m from the ministry I am here to help you!".
Well the first two look rather dated now but the third is looks as fresh as ever.
The Serious Fraud Office assure us that so long as corporate hospitality offered by Sales & Marketing for example is “reasonable and proportionate” we are OK.
In any question of business ethics in practice though, there is always a scale where individual discernment will make drawing the line on any action different per individual.
For example - Take STEALING- At which of the three questions below would you draw the line ?
Q1. If I take a pencil from the office stationary cupboard to do my crossword or sudoku puzzle is that stealing? Answer- Yes but many would let that one go.
Q2. If I took 12 pencils from the company stationary cupboard for my church’s Sunday school is that stealing? Answer -Yes but maybe some would let that one go
Q3. If I took a gross of pencils ( 144 pencils) from the stationary cupboard to start up my own pencil selling business. Is that stealing? answer - Yes and probably most of society would have said that action had beyond the acceptable line! 'Reasonable' and 'proportionate' can be quite subjective though.
Mr Robinson of the SFO outlined six principles which are quoted on the Mesiro Financial website. These principles have been turned into six questions all in sales and sales management should be considering from now on.
The ACT will make it a crime for a business failing to prevent a person from bribing on its behalf.
1. Is the company keeping up to date on new risks?
2. Is there senior level support?
3. Has the company done adequate due diligence on its business partners?
4. Are there clear, practical and procedures in place? Have they been adequately communicated and do they apply to all employees and business partners?
5. Is the company going beyond “mere paper” compliance?
6. Is there a process for auditing the controls?
Come what may, it looks like the lawyers and auditing industry ( compliance, quality and regulatory) have been given a new source of fees or revenue stream from the new act- and possibly training also!
Other related links
There was also a spokesperson from this law firm on the BBC Today programme
Eoin O'Shea is the author of "The Bribery Act 2010: A Practical Guide", published by Jordans in 2011. More details are available here:
Blake Lapthorn is advising businesses on the impact of the Bribery Act and assisting with the adequate procedures defence. If you require any assistance or guidance on what the Bribery Act means for your business, please contact Philip Somarakis in the Business Regulatory team in Oxford on 01865 254277or by email at firstname.lastname@example.org