Grey matters ethical dilemma: Wine and dine – the verdict

CEO Harriet must decide what the correct protocol is when a supplier repeatedly tries to give a personal gift against company policy. Read the CISI's verdict

wine and dine1920
Harriet is the CEO of a small wealth management firm with about 100 staff members. The company has a gifts policy in place which states that all gifts received must be declared to the HR manager. Items of low value or items that have been personalised or engraved (such as pens or calendars) may be kept after being declared.

Additionally, gifts may be kept if they have been given as a result of a personal connection or relationship – but this is subject to Harriet’s discretion. Otherwise, all gifts are held by HR and staff members are given the chance to enter a raffle and win one of the gifts on the day before the office closes for the Christmas break.

One of the firm’s suppliers is a small, privately owned printing company, Rainbow, to whom the firm has sent all of its printing for a number of years, and where Harriet has a friendly relationship with its Managing Director, Herman.

In early December, a package arrives from Rainbow containing six bottles of wine, with a generic note saying: “Thank you for being such a great customer this year. We hope that your staff members enjoy this contribution to your Christmas gift raffle.” This is not unusual – Rainbow has sent the same gift for the past two years in a row – and the package is given to HR to be declared and added to the collection of other gifts received throughout the year.

Persistent presents
However, a week later another package arrives from Rainbow, addressed personally to Harriet. This is a bottle of wine, which Harriet knows is more expensive than the wine already received. It is accompanied by a slightly cryptic note from Herman to Harriet: “I know your policy is to share gifts between your employees at Christmas, but I did not want you to feel left out.”

Harriet sends this gift to HR to be added to the Christmas raffle and sends a polite note back to Herman thanking him for the wine, saying she is glad that he has enjoyed working with her, but that she is sure that Herman will understand that she cannot ignore the firm’s rules just because she is the boss.

A week or so after returning to work following the Christmas break, Harriet receives an email from Herman inviting her to lunch with him in a few days’ time. Harriet is happy to accept as it does not appear that Herman has taken offence over the note she sent to him regarding the bottle of wine. Herman says that he will meet Harriet at her office and they can go on to the restaurant together.

As arranged, Herman calls for Harriet at her office, and tells Harriet that he has booked a table at a well-known restaurant, just a short walk away. Harriet has not been there before as it is considerably more expensive than she would normally choose for a business lunch. Nevertheless, she enjoys a convivial lunch with Herman, whom she is able to reassure that the firm has no current plans to change its suppliers and they part on good terms. 

A few days later, Harriet arrives home  late after attending an evening function and is greeted by her partner who says  that they have received a package, which she opens to discover two bottles of rather good claret in a very nice presentation box. There was a note from Herman, which  said simply: “Enjoy!”

Slightly irked by the prospect of having to lug the heavy box in to work at a time when she is very busy, Harriet thinks no more about it and goes to bed.

With Harriet’s heavy schedule, the matter of the wine slips from her mind until a few weeks later when preparing for a dinner party. Her partner says that he has opened the wine that Herman sent as it looks rather good. On hearing this, Harriet sighs, remembering that she had meant to take the wine in to work and give it to HR to hold until Christmas. Clearly this is no longer an option.

The CISI verdict
Gratifyingly, 88 readers responded to this dilemma, which revolved around Harriet, the Managing Director of a small firm, receiving at home a gift of expensive wine from a business contact, and her failure to follow her own firm’s procedures. Bearing in mind the circumstances, it also called into question the motivation of the person giving the gift.

The giving and receiving of gifts at particular times of the year is something that goes on around the world and so it would be very easy to take the view that “it’s just a couple of bottles of wine” (option A), which is what a small number of readers did. This ignores the fact that the Managing Director would consciously have been flouting her own policies.

A slightly larger number of readers voted for option B (contribute value of wine to staff Christmas fund), which is appropriate in so far as Harriet has recognised that she cannot flout her own firm’s policies, but does ignore the motivation of Herman, who gave her the wine, despite being aware of the firm’s policy on gifts. So it really only deals with half of the problem. 

Responses C (review dealings with Herman) and D (write to him), the choices of the majority of readers, acknowledge that Herman’s actions were questionable and that he seemed to be blending a personal and a professional relationship. While there are many situations where this is inevitable, it should not be taken advantage of, therefore Herman appears to have crossed a line. Accordingly, it is sensible that Harriet should write to him from the office to make him aware of this.

Consequently, we consider that D represents the most appropriate course of action, while neither B nor C are wrong in themselves.

This dilemma appeared in the March print edition of the Securities & Investment Review (S&IR). The results of the survey and the opinion of the CISI will also appear in the July 2016 print edition of The Review.
Published: 04 Jul 2016
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