Are gifts for the good of industry

Feb 11 2010 by Bill Midgley, The Journal

THE alleged practices of British Aerospace have resulted in that company incurring a substantial 'fine', but before the business community in general commences on a path of criticism there are a few lessons that may be learned from the case and, perhaps, some questions to be asked of those of us in the business community.

BAe has paid its price but is what it supposedly saw as acceptable business practice so far removed from what many companies do on a regular if smaller basis?

Corporate entertaining, while perhaps not at the level of recent years, can be seen as no more than an inducement to transact business.

Golf competitions are enjoyable, yet again are only a means to influence decision-makers, and tickets to the theatre, sports events and charity dinners are commonplace. Indeed many charity functions would not exist were it not for corporate entertaining, when really a direct donation to the charity might be more beneficial.

The line seems to be drawn at cash inducements, although a few days at attractive hotels and spas for business executives and their partners may seem equally attractive as a financial inducement.

And before I am accused of hypocrisy I have previously enjoyed some corporate hospitality but certainly not cash gifts.

But before we moralise, it is necessary to reflect on the practices of the market place in question.

The British are, of course, incorruptible or so we once claimed. A somewhat hollow statement in the light of recent events. But other countries view the payment and acceptance of inducements as the normal way to transact business. Countries that are vital to our exports and the preservation of jobs.

It is relatively easy to moralise from afar, a little more difficult if you are the business that has to compete for orders against those countries that would not think twice about paying whatever is required to win that order.

So should we keep the high moral ground or compete on an equal basis? Not an easy question when the wider issues are to be considered, namely the future of a major industry and its workforce.

So when we are accepting that rather attractive leather-bound desk diary next December, we have a decision to make.

Should we accept the inducement or not, for inducement it is. Perhaps the answer is a discussion over dinner at a good restaurant, with partners of course.

:: Bill Midgley is a North East business executive and former chairman of the British Chambers of Commerce.