Ernst & Young survey reveals slight reduction in corporate hospitality as a result of the Bribery Act

An Ernst & Young survey has revealed only 18% of companies have reduced their level of corporate entertaining in light of the Bribery Act.

Corporate hospitality is not in the decline
Corporate hospitality is not in the decline

The survey, which was carried out by the FIDS (Fraud, Investigations and Disputes Services) team at Ernst & Young, also found 68% of middle managers said the tighter rules on entertaining had either made no difference or they were unaware of any significant reduction to their hospitality spend.

More worryingly the survey highlighted almost 60% were not familiar with their company’s polices in this area, while more than half of the managers questioned (58%) would like more clearly defined limits.

Lavish hospitality has been a repeated message of the Serious Fraud Office in its explanations of how it sees corporate hospitality under the Bribery Act which came into force in July 2012.

John Smart, partner at Ernst & Young explains: "The best protection for firms that want to avoid issues with the Bribery Act is to publish and enforce clear, written policies regarding any gifts, expenses or hospitality that might influence or be seen to influence their business dealings in any way. However, this can be difficult since the Ministry of Justice and Serious Fruad Office has not sought to provide financial limits when it comes to guidance on corporate hospitality."

"Some corporate events this summer will see some businesses buying packages costing up to £7,000 per person. Although this may seem ‘lavish’ to many, the Bribery Act itself contains no specific rules, monetary limits or exemptions, which means that each case will ultimately have to be decided on the facts presented at the time, and the context."

Smart adds: "A great deal of the corporate hospitality being arranged at the moment will far outstrip the £100 per person cost that many UK middle managers consider to be ‘lavish’. However, often even more important is the context and timing of hospitality and the impression this may create.

"Receiving or offering entertainment in the middle of a tender process or sensitive negotiations is more likely to be inappropriate and store up enforcement and reputational risks. In general, many people should simply ask themselves – particularly in the age of transparency and social media – would they be relaxed if details and levels of their corporate entertaining became public?"

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