Matthias Dennig/ December 17, 2018/ Uncategorized

Christmas time is the time to give, also for businesses. But is Santa welcomed? While we can look forward to gifts from family and friends carefree, or – if things are not as expected – only with short disappointment till the big annual exchange – presents from business partners may come with legal consequences. Those who give or accept too much have already lost. Legal principles and laws must be followed – there is no holiday break for compliance.

Why business gifts can be problematic?

Small gifts maintain the friendship – True, but we live in a time with ever stricter regulations. The fight against bribery and corruption is part of a good business philosophy, promotes reputation and reduces risks at the same time. Potential damage due to violations of regulations can be immense. Image loss, fines, prosecution and ultimately loss of trust can be the result. Transparent and trusting business relationships are immensely important and responsible behavior is the basis. Big contributions are therefore inappropriate. The risk of losing reputation is too high within a society, which responds more sensitive with increasing awareness.

No gifts are not a solution either

And now? Is the solution the total abandonment of gifts? Certainly not. How sad would everyday life be without small presents or business lunches? After all, those also serve to intensify and improve existing relationships, and certainly not always with the evil ulterior motive of bribery. It is also indispensable to take the cultural environment into account when considering the amount of contributions. In other countries, especially in Asia, there are quite different standards when it comes to gifts. The rejection of a gift in many Asian cultures can be more often perceived as rudeness or worse than loss of face. A then rather counterproductive effect on the business relationship. Nobody wants that.

Business gift guidelines – a must-have

There is great uncertainty, especially among the employees. “May I take a piece of chocolate with my espresso, or am I already in a gray zone?“ Increasingly, the compliance departments receive inquiries from insecure employees. For example, business lunch with external partners often mandate a flat rate of € 35-50, when often the actual amount cannot be estimated in advance. In order to not leave employees with uncertainty about permissibility of gifts and invitations, company specific guidelines are required, such of Otto Group or of the Bausparkasse Schwäbisch Hall. There they are part of compliance in the area of ​​fraud prevention and the internal control system. The Gift Guidelines provide a framework of what is appropriate without appearing to influence the business partner. The legislature only gives little specifications. It is only required that benefits should be “socially adequate”. What the guidelines contain can therefore be determined by each company and also depends crucially on the respective company size and culture. Federal officials already have to obtain a permit for grants of more than € 25. For large industrial companies, especially at board level, this amount is unlikely to be realistic.

Useful help – the App

The ultimate control is with the compliance department, which has to decide what is still within the scope of the allowed and what not. The compliance department is ultimately in control over what is appropriate. It also needs to be documented where the contributions come from, how they are made and whether certain patterns can be identified. If, for example, a supplier is always generous shortly before the end of the contract, that naturally leads to certain conclusions. An extensive task that can now be solved more easily thanks to digitization. Mobile applications collect and archive all contributions received by each employee from external companies. Logging is easy with any smartphone on the spot.

Type of gift, the estimated value, the supplier and recipient are entered into the app. The values ​​of all received gifts are consolidated and statistically evaluated. So, rule violations can be detected immediately. Of course, the success ultimately depends on the users and shows whether the business culture could be successfully implemented on all levels.

Any further questions? It would be our pleasure to answer them.

References:; Zugriff: 28. November 2018-11-28; Zugriff: 28. November 2018-11-28; Zugriff : 28. November 2018; Zugriff: 28. November 2018-11-28; Zugriff: 28. November 2018; Zugriff: 29. November 2018

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For more information about the smartphone app, contact the author:

Matthias Dennig

About Matthias Dennig

Matthias Dennig works as a presales and consulting expert for the product SMARAGD aces360. His area of responsibility includes advising prospective clients and supporting the introduction of the SAP BIS based product SMARAGD aces360. For more than 15 years he has worked as a project manager in the compliance environment for targens GmbH in various major projects in Germany and other countries.