On 1 July 2011 we see the introduction of the Bribery Act 2010, rushed through by the Labour Government before leaving office last year.
The law on bribery introduces new criminal offences for bribery for both individuals and companies that could see you carrying the can for actions taken by “associated persons” as well as your own workers. It may also be a time to look at your corporate hospitality….
As well as being responsible for the actions of your employees, you could also be held responsible for the actions of an “associated person”. This is defined as a person who performs services for, or on behalf of, your organization and includes individuals and companies. So agents, contractors, suppliers (who perform services) and subsidiaries based in and outside the UK would all be included.
You will not be responsible for offences of bribery by associated persons where you can demonstrate that you have “adequate procedures” in place to prevent bribery taking place.
The Act itself does not define “adequate procedures”, but the Government’s guidance sets out six key principles that companies should follow when devising bribery prevention procedures.
The six principles are:
- Proportionate procedures: the policy and procedures you need to introduce should be proportionate to the size of your organisation, complexity of your commercial operations and the risk that your organisation faces. On this basis, your starting point is going to be to conduct a Risk Assessment to help you decide how much you might need to do to protect your business. We can help you with a questionnaire-style assessment form if you would like some assistance with this.
- Top-level commitment: the top-level management should be committed to preventing bribery and should foster a culture in which bribery is never acceptable. You could demonstrate this by having a Policy statement that communicates your stance on bribery.
- Risk assessment: the nature and extent of exposure to potential external and internal risks of bribery should be assessed and documented periodically. As above, we can help with a Risk Assessment form if you would find this useful.
- Due diligence: due diligence should be carried out in relation to third parties who will perform services on behalf of the organisation.
- Communication: bribery prevention policies and procedures, including processes for training staff, should be embedded and understood throughout the organisation.
- Monitoring and review: bribery prevention procedures should be monitored, reviewed and, where necessary, improved.
When it comes to corporate hospitality and entertaining, you need to think “proportionate” and “in good faith”.
A certain amount of corporate entertainment may be required for the purpose of establishing or maintaining good business relationships, to improve the image or reputation of the Company, or to present the Company’s goods or services effectively. This is fine as long as it is arranged in good faith and not offered to secure an advantage for the Company or to influence the impartiality of the recipient.
In other words, a lunch at Pizza Hut is unlikely to cause you problems but the keys to a new Merc during a tendering process is going to be another matter altogether.