The UK Bribery Act is to come into force on 1 July now that the British government has eventually published guidance on how the new law will be applied. Much of the delay has been around the treatment and status of corporate entertainment. Now the Justice Secretary has clarified that no one is going to be stopped “taking clients to Wimbledon or a Grand Prix.”
Thank goodness for that.
It is as if the boards of UK companies and the tens of thousands of international companies affected by the new act can now breathe a sigh of relief and resume the important business of entertaining each other. Worries about patchy economic recovery and double dips will now recede as business executives once again jostle for a seat on centre court or put in ear plugs to watch with avid attention in the unlikely event that one car overtakes another at the next Formula One race.
I know the treatment of corporate hospitality can be a vexed issue. But it is essentially a sideshow to the main body of the act. And it is easy to get lost in debates about ethical relativity: so it is OK to take a potential customer to a tennis match; if that customer is a foreign government official, is it OK to employ their child as a summer intern?; and, would it be OK to fund the pet development project run by the official’s spouse?
These are all part of a consistent thread of behaviour but somewhere in the process these activities switch from being legitimate to doubtful to potentially wrong. Navigating these kinds of pitfalls has always been complicated and has and will require managerial maturity rather than just strict adherence to a law and a set of guidelines that cannot be designed for every eventuality.
But all this focus on clay pigeon shooting and the Chelsea Flower Show is in danger of over-shadowing the fact that at its core this new law casts its net very wide. It requires active rather than passive compliance and does not make many allowances for the fact that so much of international business is constructed with Byzantine complexity particularly in the very countries where bribery and corruption is most rife. And its definition of jurisdiction is ambitious and, some still argue, ambiguous.
The defence that “good companies have nothing to fear” may not always be sufficient. Good companies – even ones with well developed anti-corruption cultures and practices still have strong grounds for concern even if they are at an advantage over those firms that have historically taken a strictly legalistic approach to meeting their obligations under existing legislation. One area of concern will be the risk that host governments will see the UK law as a kind of neo-colonial grandstanding by the British government and perniciously target British companies for alleged violations of local anti-graft measures.
But the more extreme rhetoric about the new law’s unfairness and likely efficacy are overstated. It will take a while for the new enforcement regime to settle down but resilient companies will adapt well.
In the meantime – to stretch the metaphor to breaking point – it is time for a pit stop, change the tyres, make sure the racket is correctly strung and to keep a close eye on the line judge.