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Section 4: Honest and Ethical Conduct - Gifts and Entertainment
Receiving Gifts and Entertainment
Relationships with suppliers must be based entirely on sound business decisions and fair dealing. Business gifts and entertainment can build goodwill, but they can also make it harder to be objective about the person providing them. In short, gifts and entertainment can create their own "conflicts of interest."
What are gifts and entertainment? Anything of value, including discounts, loans, cash, favorable terms on any product or service, services, prizes, transportation, use of another company's vehicles or vacation facilities, stocks or other securities, participation in stock offerings, home improvements, tickets, and gift certificates. The potential list is endless--these are just examples.
Gifts and entertainment offered to employees and their close relatives fall into three categories.
1. Usually okay.
This category includes promotional items of nominal value, such as pens, calendars, and coffee mugs, which are given to customers in general. You do not need to obtain review or approval before accepting these kinds of items.
Note: In some departments, more restrictive standards on gifts and entertainment may apply. Employees must be careful not to accept any gift or entertainment that violates such standards.
2. Always wrong.
Some types of gifts and entertainment are never permissible, and no one can approve these.
You may never:
- accept any gift or entertainment that would be illegal or result in any violation of law
- accept any gift of cash or cash equivalent (such as gift certificates, loans, stock, stock options)
- accept or request anything as a "quid pro quo"--in other words, as part of an agreement to do anything in return for the gift or entertainment
- participate in any activity that you know would cause the person giving the gift or entertainment to violate his or her own employer's standards
3. Requires approval.
Gifts and entertainment that do not fit into the first two categories may or may not be acceptable.
Examples in this category include:
- gifts and entertainment from a single source with an annual fair market value that is more than nominal
- special events, such as a World Series or Super Bowl game or a major golf tournament
Before offering or accepting these kinds of gifts or entertainment, you need to get approval from your supervisor, who may consult with the Compliance Officer.
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Q: I want to give one of our best customers a special gift to say thanks. I have access to some Super Bowl tickets that I know he would appreciate, but it may be against his company's policy for him to accept them. Can I just go ahead and offer him the tickets?
A: No.
1. First of all, the Company's Compliance Officer must approve in advance a gift of substantial value, such as Super Bowl tickets.
2. Second, even if the gift is approved, you cannot give a gift to a customer (or another third party) if you have reason to believe the gift will violate the customer's own conflict of interest policy.
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