Bribery Act sparks event industry uncertainty

The impending Bribery Act raises fears about the extent to which lavish hospitality could be seen as 'improper inducement'.

Bribery Act sparks events industry uncertainty
Bribery Act sparks events industry uncertainty

Confusion

Industry figures have expressed fears over a lack of clarity in the Bribery Act, which could make lavish hospitality illegal when it comes into force in April.

The Act, which received Royal Assent last April but is currently undergoing a government review, will require all businesses to have a bribery policy, and would make directors liable if their company uses 'improper inducement'.

Oxford University Centre for Corporate Reputation fellow Liz David-Barrett pointed out there is a disconnect between what businesses deem acceptable and the letter of the law. "Companies we've surveyed in the City tell us, for example, that taking a client to Spain for a weekend is fine, inviting his wife along is okay, but they draw the line at taking his kids along too," she said. "The law remains cloudy."

COI's director of live events Simon Hughes agreed: "There has been real uncertainty in the industry about this. The UK is built on precedent law, so we may have to wait for someone to be hauled up."

Case in point

In January 2009, the Financial Services Authority fined insurance broker Aon £5.35m for failing to take reasonable care to counter the risks of bribery and corruption. Aon was pulled up for issues including providing lavish travel and entertainment, linked to training for foreign public officials who were clients.

Hewlett-Packard (HP) head of enterprise events UK&I and Western Europe Jane Culcheth-Beard said: "HP is definitely giving this a great deal of attention, to the point where none but a few globally-agreed hospitality events are okayed."

Bupa events officer Natalie Laws said her legal team have been looking at the issue. "They have advised us to make sure our entertainment is reasonable," she said. "We would, for example, make sure we don't take out a client's whole family on an event."

Balance

Accountancy firm Grant Thornton has surveyed 166 corporates on the issue, and investigative services partner Sterl Greenhalgh said the key element is context.

"If a company chooses to shower a client with luxury trips to obtain business from a rival this could be risky," he said. "If, however, he is an existing client, or is used to this treatment as standard business practice then this should be okay."

Cavendish Group chief executive Chris Bruton cites as an example a £12,000-per-person hospitality package, sold to 100 people in 1998. Guests were taken to the FIFA World Cup final in Paris and the British Grand Prix in the same day. He claims this would now be seen as unjustifiably lavish. "We recommend that you don't talk business unless the client wants to, and only take existing customers," he added.

Common sense

However, some corporate hospitality providers have welcomed the Act as a way to add credibility to the industry.

Crown Group chief executive Charles Beer, whose group includes hospitality supplier Kudos, said: "Any reputable company within our industry will already be complying with the relevant legislation, so the impact will be minimal."

Common sense is the message from Event Assured managing director and Eventia board member Brian Kirsch. He said there is no suggestion that regular corporate hospitality, for example a trip to Ascot, will be considered improper. "It's about the intention on the part of the giver. There would have to be a lot of fallen hurdles before the Serious Fraud Office became interested."

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