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Marketing: The Bribery Act

20 January 2011
Alan Gayle offers you help with your marketing.

Alan Gayle is a sales and marketing consultant specialising in the construction industry. In this column he offers advice on how to make an impact in the market. This time he looks at how the Bribery Act could affect the way you entertain clients

Just over six months ago, on 8 April, The Bribery Act 2010 received Royal Assent. “So what”, I hear you say. Following a period of consultation that ended on 8 November, the Act should become law in April. “How does this affect the construction industry?”

Well, given the construction industry’s record in these matters, to all but the most ill-informed or naive that answer is obvious. What this has got to do with marketing is perhaps not quite so obvious… until, that is, you look at the Act’s wide-ranging new powers to question the innocence of corporate hospitality.

Ha, ha! Now I’ve got your attention.

Back on 14 January, Lord Tunnicliffe, then Government spokesman for the Ministry of Justice, said: “We recognise that corporate hospitality is an accepted part of modern business practice and the Government is not seeking to penalise expenditure on corporate hospitality for legitimate commercial purposes. But lavish corporate hospitality can also be used as a bribe to secure advantages and the offences in the Bill must therefore be capable of penalising those who use it for such purposes.”

But there’s been a change of Government since then, so we can all breathe a sigh on relief. Well, not quite.

The draft guidance issued by the Ministry of Justice in September indicated that all businesses, from the FTSE 100 multi-billion pound corporations to the smallest one-man-band, will be required to keep records of the hospitality they and their employees have both given out and received. Ouch!

In theory, every lunch bought for a client, every hospitality event you attend (eg golf days, tickets to the football, horse/dog racing days), every gift you receive, even a cheap bottle of vino at Christmas, will need to be recorded. For some, this will barely affect them. But for others it could be a real headache.

I know Directors in the stone industry who spend quite a considerable sum annually buying lunches for their most important clients. And while there’s nothing wrong with that, from April the record-keeping might leave a nasty aftertaste.

Things could get even more complicated for those in the stone industry who routinely take project teams on international quarry visits. The legitimacy of the quarry visit cannot be questioned but on occasions the size of the party, the length of the visit and the chosen accommodation might well be.

In an article in The Telegraph, Elizabeth Robertson, head of corporate crime at law firm Addleshaw Goddard, was quoted as saying: “The consequences [could be] catastrophic. The fines are unlimited. It’s a massive change. It’s the most significant piece of legislation to affect the business community since the implementation of the Proceeds of Crime Act in 2002.” Ominously, she added: “Small and medium businesses are really vulnerable. They don’t have elaborate systems and controls in place.”

So beware! The law is changing and as we already know, the construction industry has fallen foul of Government legislation relating to unfair working practices more than once or twice before.

The Government’s summary of the Bill can be found on www.justice.gov.uk/

publications/bribery-bill.htm. You will find a link to Lord Tunnicliffe’s letter on the same page. If you want a comprehensive guide to the Act, PriceWaterhouseCooper have produced one that can be downloaded free as a PDF from www.pwc.co.uk/pdf/act_now_or_pay_later_uk_bribery_bill_white_paper.pdf

Alan Gayle is a sales and marketing consultant specialising in the construction industry. He spent 19 years with some of the UK’s leading building product manufacturers and has worked in the stone sector for the past eight years.
Alan now runs Gayle Associates, which provides a range of sales and marketing services for small and medium sized contractors and suppliers. His clients are seeking growth but the management are too busy to do it themselves and they don’t want the commitment of a full-time employee.
 

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