The holiday season can be the most wonderful time of the year. It brings good food, end-of-year celebrations, and everyone’s favorite– gift-giving. While exchanging gifts is oftentimes a sign of appreciation, gratitude, and hard work, it can also be the root of conflicts of interest (COI) or non-compliance within companies.
While people tend to think of conflicts of interest as things like hiring a family member, conflicts can also arise during the gift-giving season. Here are five guidelines that will help you and your team avoid conflicts this holiday season.
Most organizations have, or should have, corporate policies establishing what is acceptable when it comes to exchanging gifts with employees, partners, and vendors. However, it is up to organizational leaders to ensure all employees understand– and comply with– corporate policies to ensure a COI does not arise. An example of a COI would be if someone were to accept tickets to an entertainment event from a vendor while deciding whether to award business to that or another vendor. While it may be considered relationship building, it also can be seen as unethical for the business and can lead to larger issues.
One of the key ways to raise employee awareness of how giving and receiving gifts may create conflicts is to underscore the organization’s commitment to business ethics and social responsibility. This can be done by deploying short-form refresher training or even by sending reminders through organizational communication channels, like email or IM channels.
Corporate policies and regulations also need to be distinctly outlined to ensure there is no confusion about what employees can and cannot give or receive. Discerning between appropriate and inappropriate gifts can be difficult under the best circumstances, so here are some basic rules to help organizational leaders successfully guide their employees this holiday season and prevent potential conflicts of interest.
1. Focus on appearance, not the intention.
When it comes to business gift-giving, the phrase “it’s the thought that counts” does not apply. If a gift gives the appearance of undue influence– no matter the original intent– it creates a conflict for both parties. This means employees need to shift from focusing on the intention of the gift and consider how a gift may be interpreted by others.
A good rule of thumb to follow here is if public disclosure of a gift would be embarrassing to either organization, it shouldn’t be given or accepted.
2. Consider the value of the gift.
One of the primary ways a gift communicates its intent is through its value. If a gift has a high cost associated with it– for example, an expensive piece of jewelry– that’s a good indication it may be tied to expectations and can, in turn, trigger a COI. This also applies to branded gifts as it is just as inappropriate to accept or give an expensive gift even if it has a company’s logo on it.
It’s equally important to know that value also applies to meals and entertainment, and while every company has its own policies on meal and event expenses, accepting an expensive bottle of wine or an extravagant meal can present the appearance of a conflict. While these guidelines apply to companies of all sizes, there are even stricter regulations for companies that do business internationally or with the government.
3. Share the gift.
Sometimes there are gray areas where a gift is neither cheap nor overly expensive. In these situations, getting fully into the holiday spirit and sharing the gift with the people in the office is likely the safest situation. This gesture transforms the gift from being a personal item to a gift the whole office can enjoy.
4. Don’t give or accept cash or cash equivalents.
While gift cards may seem like the easiest gift to give, especially with so many people now working at home offices, they are considered a cash equivalent, even at a nominal value. This is because when there is cash involved, income and tax laws can apply, therefore it can cause larger issues down the road. So, while a gift card to the local coffee shop may seem like a no-brainer, it unfortunately can be one of the more common COIs that businesses see.
5. Be transparent.
Transparency is the key to safe corporate gift exchanging. When gifts that are received and given are reported appropriately, it tends to decrease any risk that could be associated with potential COIs. Transparency also fosters a culture where employees feel safe about asking their organizational leaders about what may or may not align with business ethics and social responsibility.
The holiday season can be seen as a time to let your hair down, relax and celebrate. Teams can enjoy the end of year season while still playing it safe. At the end of the day, a business needs to operate as one unit, which means everyone needs to align on core principles and policies, and that includes gift exchanging during the beloved holiday season.