A confession: if a bribe is something offered to influence judgment or conduct, then I have given and taken bribes.
I have enjoyed sporting, musical and theatrical events at companies’ expense. I have literally rubbed shoulders with Silvio Berlusconi in the tribuna d’onore at Milan’s San Siro stadium (at someone else’s invitation). I have flown in Robert Maxwell’s jet to Robert Maxwell’s yacht, to hear the corrupt media magnate extol his latest acquisition on the deck off which he later tumbled. I have, in my turn, wined and dined diplomats, civil servants, bankers and chief executives. And I will again because it helps me fulfil my half of journalists’ odd business bargain, in which human contact yields news and improves insight.
This sort of bargain is recognised by the British government in its recently published guidance on the country’s new bribery act. It warns that hospitality can be used to bribe people, but it also recognises that companies using it in a “reasonable and proportionate” way to improve their image, better present their products or “establish cordial relations” should not be punished automatically. As Ken Clarke, UK justice secretary, wrote in the FT: “Under this law, no one is going to try to stop businesses taking clients to Wimbledon, or a Grand Prix.”
Yet Transparency International UK, the anti-corruption organisation, and others attacked Mr Clarke for relaxing the pressure on companies to stop paying bribes. Lawyers say the law is the law, guidance is only guidance – and judges will rely on the former, not the latter.
I find the UK advice sensible, but it is not and cannot be definitive. It acknowledges, first, that some forms of inducement are relatively trivial (those Wimbledon tickets for foreign customers), second, that some more serious forms are beyond the pale (a five-star holiday for a public official in a place unconnected to the company) and, third, that the line between the two is often damnably hard to determine.
Many businesspeople work at or near this line. It is the nature of any negotiation that one person will try to take advantage of the other’s human nature to get what he or she wants. But it is extreme to assume that, if companies were unfettered by laws, they would take a Clausewitzian view that bribery is merely dealmaking by other means, and start exchanging backhanders.
The dangers of being dragged across the line are, however, getting stronger, as global competition for deals increases and companies face peers with fewer scruples across the negotiating table. How can you ensure your staff stay pure?
Commitment to good conduct from the board down is essential. The chairman and chief executive must set an example. They need to oversee codes of conduct, backed up by training, and closely monitored. Yet codes are themselves evolving, shaped by legislation, what other companies are doing (good and bad), and the occasional scandal.
A code’s strength relies only partly on content. Will Kenyon, a partner at PwC in London, says: “It’s as much about tone and language, because any code has to be comprehensible and meaningful for all of your people.”
BAE Systems, the defence company that has spent years laying the ghost of corruption-related allegations, issues everyone with a copy of its code, a card that tells them how to get advice and a simple flow-chart to tackle dilemmas. BHP Billiton, the miner, intersperses its version with speech-bubbled pictures of hard-hatted staff in the field grappling with realistic questions (Q: “I believe our offer to fund the minister’s favourite environmental project will help ensure we gain access to this landholding . . . There’s nothing wrong with that, is there?” A: Yes, BHP says, there is.)
But business takes place in grey areas between examples. The UK may not seek to prosecute companies for offering Wimbledon tickets, but Merck of the US would deem such an invitation excessive. BAE warns its code “cannot cover every situation that you may face within your everyday role”. Adding to rules encourages a search for loopholes and a sense that if a practice is not outlawed, it must be allowed.
Instead, companies must keep reinforcing simple rules of thumb that can be applied in the most complex situations. BHP highlights seven “tests” of conduct; BAE poses six questions; Merck trumps both with just four. One is common to all – and to the FT’s own code: would you be embarrassed to see this written about in a newspaper? That works for me.
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