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Top tips on corporate hospitality


1


Try and find the right balance between what is sensible, allowable and within reason. Above all, apply common sense.


2


Approval, approval and approval are the key words. Hospitality will have to go through an authorisation process and scrutiny by compliance departments.


compliance department even questioned event organisers about the amounts of food and wine being provided. “There was a lot of publicity at the time of the act about it being a sledge- hammer to crack a nut. What it did do was at least make people think care- fully about hospitality and probably create some well overdue policy and procedural changes,” explains Knights. Fast forward and it’s still having an impact today. The Bribery Act is quoted time and time again as a reason for companies not buying or accepting corporate packages, and not wanting to be away from a busy office appears to be another reason. The Financial Conduct Authority has also issued stricter guidelines on hospitality. “People read the legislation slightly


incorrectly though, assuming it negates everything, which was far from the aim,” says Ken McLeod, corporate director at the Advantage Travel Partnership. Other corporate hospitality stories


of woe help fuel the fire – such as BHP Billiton’s fine earlier this year from the US Securities and Exchange Commis- sion, for breaking bribery laws at the Beijing Olympics. This was described as a renewed warning to the global corpo- rate hospitality industry when BHP had to cough up US$25 million for entertaining 60 dignitaries, who re- ceived travel for themselves, their spouses and others, luxury hotel accommodation, as well as Olympic tickets and other trips worth up to £11,000 a throw.


122 BBT JANUARY/FEBRUARY 2016


The Bribery Act is quoted time and time again as a reason for companies not buying or accepting corporate packages


“However, the fact that hospitality is still going strong suggests all this legislation and court cases probably cracked down specifically on the high-end corruption side, as well as lavish trips,” says Knights. Certainly the fall-out from all of this is that hospitality these days appears to come with a corporate health warning, especially if it’s extravagant or overseas – then the warning lights really start flashing (see Case Study, p125). And all who accept or arrange trips have to have a much clearer business case and justification for them, with both transparency and signed approval up and down the line – any whiff of a ‘jolly’ and it’s out the door.


REASONABLE & PROPORTIONATE The big question still remains – what is reasonable and proportionate when it comes to a corporate hospitality package? Taking a prospective customer to a Formula


3


Transparency is crucial. Keep a record, and employ a system that ensures all hospitality is documented and approved within corporate policy.


4


Proper staff training, continual monitoring and the establishment of clear reporting lines between staff and senior management is also advisable.


5


You need to observe a typical code of compliance, including putting in place appropriate financial controls relating to hospitality.


6


Designate a single person to be responsible for overseeing all compliance matters – likely to be the chief compliance officer.


7


The litmus test (even as a buyer) is: can you justify it, if you were asked by your boss after such a corporate hospitality event?


8


The value of a corporate hospitality package to the recipient, rather than the cost to the organisation, is seen as the relevant measure.


9


Despite all the above provisos, don’t underestimate the benefits that come from hospitality – it’s still a sure-fire way to cement business relationships.


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