The Importance of Clear Gift Policies for Companies
During the holiday season, clear written communication about permissible gifts for employees can protect companies from conflicts of interest and reputational damage, according to corporate ethics experts.
Who are the Experts?
Fernando Sentíes, an expert in Organizational Ethics and the founder of AMITAI (Asociación Mexicana de Profesionales de Ética y Cumplimiento), and Adriana Peralta, a compliance and corporate ethics consultant, emphasize the necessity of such policies.
What Should a Gift Policy Include?
A gift policy should adhere to four principles: legality, integrity, transparency, and proportionality, as outlined by Sentíes, the founder of AMPEC (Asociación Mexicana de Profesionales de Ética y Cumplimiento).
- Legality: The policy should not contradict internal rules or external legal regulations.
- Integrity: It should prevent the disguising of bribes as gifts during the holiday season.
- Transparency: Gifts should be publicly declared, not hidden, and sometimes even raffled among teams.
- Proportionality: Gifts should be of “very low cost” and non-commercializable.
A written gift policy should be communicated to all organization members, providers, and clients.
Enforcement of Gift Policies
Leadership and management play a crucial role in the successful implementation of gift policies. If leaders disregard these guidelines, employees may lose interest in adhering to them.
- Leadership Example: Leaders must set an example by following the gift policy. If they don’t, employees may view it as a meaningless rule.
- Sanctions: Violations of the gift policy, including by leadership, should result in sanctions. Without consequences, the policy becomes ineffective.
Risks of accepting compromising gifts include damage to a company’s reputation, conflicts of interest, decreased product or service quality, and potential legal investigations.
Gift Policies: An Overlooked Aspect in Family Businesses
Experts recommend that all companies, regardless of size or stock exchange listing, implement gift policies. Only about 40% of Mexico’s top 500 companies currently have such policies, according to Sentíes.
Small and medium-sized enterprises often lack these practices, increasing their risk. Being a supplier to a company with a gift code of conduct can mitigate some risks, as these rules apply to maintaining business relationships.
In family businesses, the practice of giving gifts without formal guidelines, especially at higher levels, is common.
Peralta suggests reconsidering gift-giving in favor of expressing gratitude through high-quality services, requesting feedback, and fulfilling commitments before considering lavish gifts or meals.
Key Questions and Answers
- What is a gift policy? A gift policy is an internal tool in companies defining and communicating to employees what gifts they can give or receive.
- Why are gift policies important? They protect employees’ professional judgment from being compromised by accepting gifts from vendors, clients, or any third parties.
- What should a gift policy include? It should adhere to legality, integrity, transparency, and proportionality principles.
- Who should follow the gift policy? All company members, providers, and clients should be aware of the policy.
- What are the risks of not following a gift policy? Risks include damage to company reputation, conflicts of interest, decreased product or service quality, and potential legal investigations.
- Why are gift policies important in family businesses? Lack of formal gift guidelines in family businesses can lead to increased risks and potential misinterpretations at higher management levels.
