The Definitive Guide to Gifts, Entertainment, Charitable Contributions, and Third-Party Travel Policies, Part II

The Definitive Guide to Gifts, Entertainment, Charitable Contributions, and Third-Party Travel Policies, Part II

“But I consider the client a friend, and I’ve been giving him gifts paid for by the company for ten years now.  I have to, or we might lose his business. The whole industry gives these kinds of gifts.  This limit for reimbursement is ridiculous!”  The foregoing conversation is a real one that I had with a sales manager.  Details have been changed to protect the clueless.

 We all know that we need a good gifts and charitable donations policy.  Many of the highest profile bribery prosecutions, in the U.S. and abroad have dealt with gifts, hospitality, third-party travel, and charitable contributions violations.  Excessive gifts or charitable contributions meant to influence a decision-maker for an unfair business advantage can cause havoc, as well as violations of the FCPA, UK Bribery Act, and local law. 

 Many compliance officers struggle when putting together a gifts and charitable donations policy.  What are best practices?  What is normal?  What is excessive?  And most importantly, what is defensible to a prosecutor? 

 We at Spark Compliance have researched this issue often.  We constantly give advice and write such policies for our clients.  To help you with this task, we’ve compiled benchmarking and best practices for gifts and charitable donations.  Previously we wrote about best practices relating to entertainment and third-party travel policies.  You can read that post HERE.

 Benchmarking Your Gifts Policy

Many companies set the threshold amount for gifts at $50.00.  A survey of Fortune 500 companies showed that more than 90 percent of the respondents set gift limits at $250 or less, with more than 65 percent reporting gift limits of $100 or less.

 Additionally, in most companies with which we have consulted, pre-approval by compliance or legal is required for all gifts to government officials. 

 In many companies, Internal Audit performs spot-checks of gifts receipts to ensure the process was properly followed. 

Best Practices for Gifts Policies…

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The Definitive Guide to Gifts, Entertainment, Charitable Contributions, and Third-Party Travel Policies, Part I

The Definitive Guide to Gifts, Entertainment, Charitable Contributions, and Third-Party Travel Policies, Part I

“But I want to send my wife to the Manolo Blahnik launch party in Barcelona. What’s the big deal - I’ve gone every year?  Yes, this year I’ll be in Africa on business at the time, but since it has a plus-one, so this time my wife can take my daughter. I don’t understand the problem.”  The foregoing conversation is a real one that I had with a CEO.  Details have been changed to protect the clueless.

We all know that we need a hospitality and third-party travel policy.  Many of the highest profile bribery prosecutions, in the U.S. and abroad have dealt with gifts, hospitality, third-party travel, and charitable contributions violations.  Excessive hospitality, gifts or charitable contributions meant to influence a decision-maker for an unfair business advantage can cause havoc, as well as violations of the FCPA, UK Bribery Act, and local law.

Many compliance officers struggle when putting together an entertainment and third-party travel policy.  What are best practices?  What is normal?  What is excessive?  And most importantly, what is defensible to a prosecutor? 

We at Spark Compliance have researched this issue often.  We constantly give advice and write such policies for our clients.  To help you with this task, we’ve created the definitive guide to gifts, entertainment, charitable contributions, and third-party travel policies.  This is the first of two posts – this one on benchmarking and best practices for entertainment and third-party travel policies. 

Benchmarking your Entertainment and Third-Party Travel Policy

A survey of Fortune 500 companies showed that more than 80 percent of respondents have spending limits of $250 or less for entertainment or hospitality, with approximately 35 percent of respondents limiting entertainment expenses to less than $100.

The vast majority of our clients have spending limits of $100 or $150 for hospitality to non-governmental officials.  In many companies, Internal Audit performs spot-checks of hospitality and third-party travel receipts to ensure the process was properly followed. 

Best Practices for Hospitality and Travel Policies…

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Why You Must Hone Your Elevator Speech, and How to Do It

Why You Must Hone Your Elevator Speech, and How to Do It

“So, what do you do?”  Whether at a conference, networking session, work meeting or cocktail party, this question will come up at nearly every event you attend.  Having a good answer to this question will make you more interesting and more likely to find yourself engaged in a meaningful conversation.  It will also make you more memorable, which can increase your career prospects and your network. 

The phrase “elevator speech” is used to describe the short nature of the time it should take to deliver it.  It only takes a few seconds to go from floor to floor on an elevator.  What makes a good elevator speech? 

1.     Clarity on who you are and what you do

A good elevator speech answers two questions: who are you, and what you do.  Who you are should always include your name.  When starting your elevator speech, try to avoid relying solely on your title.  Instead, try to explain what you do in the context of why you do it.  The fact that you’re a compliance manager or vice president doesn’t really tell anyone what you do

Your elevator speech will necessarily change depending on the environment.   For instance, at a conference, you might say, “I’m Jenny Campbell, and I work Xyzzy’s compliance and audit function in our Denver office.”  If you’re at a cocktail party where people are unlikely to work in compliance, you can try, “I’m Jenny Campbell, and I help my company to be more ethical and compliant with the law.”  If you’re at a work meeting, you could say, “I’m Jenny Campbell, and I work to make sure the company doesn’t pay bribes or get in trouble with the law through the compliance function.”  By expanding on what you do day-to-day, or what your intentions and responsibilities are, you’ll immediately be more interesting. 

2.     Succinctness…

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Metrics that Matter: Part 5 – Third-Party Management

Metrics that Matter: Part 5 – Third-Party Management

Jean-Paul Sartre famously said that, “Hell is other people.”  For many compliance officers, hell is dealing with other people known as third-parties, and the companies they own.

Third-party management is a perennial headache.  Recently at the Compliance Week conference, on-the-ground polling found that third-party management was the greatest challenge facing compliance officers today.  Tracking metrics around third-party management is critical to seeing trends in your company, and being able to respond to movements in the business quickly.

In this blog, we’re going to explore metrics relating to third-party management.  This is Part 5 of our series.  If you haven’t read Part 1, I recommend you go back and start there, as it sets the stage regarding why certain metrics should be chosen.  We’ve already explored metrics that can be used with policies and procedures, which can be found HERE, monitoring and auditing, which can be found HERE, and training, which can be found HERE.

Too Much Information (for a change!)

Perhaps more than any other area of the seven elements of an effective compliance program, third-party metrics are usually the easiest to collect.  Most large companies have some sort of online or technology-based system that can gather data.  Even small companies managing third-parties on an Excel sheet can sort by column to find out how many third-parties they have in a certain country. 

Because of this wealth of data, choosing the right metrics relating to third-parties is critical.  Having numbers for numbers’ sake is not useful.  You must carefully answer the most fundamental question when choosing third-party-related metrics…

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Three Simple Tricks to Create Powerful Commitment

Three Simple Tricks to Create Powerful Commitment

“I do,” say the lovers in front of friends and family.  “I now pronounce you husband and wife,” says the officiant, followed by cheering and clapping.  Marriage ceremonies happen in public.  For a marriage to be legally binding, nearly every jurisdiction requires that the ceremony is witnessed and then written down in public recordsWhy?  Because commitments made in public are much stronger than those made privately.  Social science research has borne this out time and again.

To help your employees be more compliant and ethical, construct opportunities for people to pro-actively and publicly commit to compliance.  Here are three ways to allow your employees to make their commitment to compliance loudly and proudly.

Raise your hand

When we’re asked questions by a teacher, we raise our hand to show that we agree or are in alignment with the answer.  When Americans pledge allegiance to the flag or sing the National Anthem, they place their hands over their heart.  Raising your hand or making an affirmative movement sends a signal to our mind that we agree with the speaker.  Movement of this sort physically manifests our intention to say “yes.” 

When you’re performing live training, ask the group to raise their hand if they’re willing to commit to being compliant and ethical.  When you’re presenting to the leadership team, ask who intends to use the slides to cascade information on a new policy to their team.  Find ways to ask people to pro-actively raise their hand for compliance and business ethics.  The results will speak for themselves.

Write it out…

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