By Chris Wilks is a Partner at SA Law, www.salaw.com

As is often the case with new legislation, when the Bribery Bill was first published there were alarmist stories in the media announcing “the end of corporate hospitality”. I am pleased to say this scaremongering has now been shown to be nonsense. The Ministry of Justice has confirmed that bona fide hospitality, which is not excessive, unreasonable or unduly lavish, but simply seeks to improve the image of a business or foster friendly relations with customers and potential customers, is recognised as an important part of commerce. It is not the government’s intention to criminalise such behaviour.

That is not to say, however, that organisations can simply ignore the Act and it is crucial that directors understand the law, the impact a breach could have on their company’s reputation and, potentially, themselves as individuals, and what they can do to minimise the dangers.

First though, the boring bit.

The Bribery Act creates four offences which are:-

•Offering or giving a bribe.

•Requesting or receiving a bribe.

•Bribing a foreign public official.

•As a commercial organisation, failing to prevent bribery by a person associated with it and that could include not just employees, but could also extend to agents or intermediaries used by that business and its other business partners.

It is this fourth area which is causing most concern for businesses and directors, but the good news is that there is a defence available, provided the business has “adequate procedures” in place.

What does that mean?

Well clearly every case will be different and small organisations will have different challenges to those faced by multi-national enterprises, but there are some fundamental principles which apply across the board. Put simply, therefore, there should be:-

•A proper assessment of the bribery risks your business faces and a review of your current practices and those of the persons acting on behalf of your organisation.

•Proportionate procedures put in place to prevent bribery. These will vary from business to business depending on the risks you identify.

•Commitment at the highest level to those procedures and the anti-bribery programme.

•Communication of your procedures and proper training throughout the organisation.

•Ongoing monitoring and review of your procedures and practices.

To put it another way, simply having a paper compliance policy will not be enough; there has to be a real buy in by directors and senior managers and genuine implementation.

What are the risks if your procedures are not adequately robust?

Well clearly there is the danger of corporate prosecution and even the conviction and imprisonment of individual directors or senior staff who “turn a blind eye”. There is also the risk of being sanctioned by your professional body, being black listed and debarred from tendering, to say nothing of the impact on your reputation and the costs and resources involved in refuting allegations and protecting the integrity of your business. In addition any contract secured as a result of corrupt practices may well be unenforceable.

The Bribery Act comes into force in July and it would be as well if Boards started to consider the implications, and how they intend to respond, now.