Hospitality registers, the cycle of obligation and procurement ethics

Our post here on the Met Police chief resigning and the hospitality register question, and the LinkedIn debate we started around it caused a lot of comment.

One school of thought – and a real difficulty with the whole issue - was expressed well by Alan Barclay on LinkedIn.

Is it now assumed that I should now register EVERY birthday and Christmas present just in case Mr. Murdoch's Team decides to check me out....

How do you know if a friend who gives you a gift might one day turn out to be a potential supplier for instance?  Good point, although Alan agreed that a £12,000 gift from an acquaintance (as in the case of Stephenson) was not quite the same as a bottle of wine from your oldest mate!

Nigel Robson made a very insightful comment, drawing on social psychology theory.

Let's cut to the heart of it - "Hospitality" is designed to influence, build up a debt of gratitude or begin a competitive "Big Man" cycle of obligation - it affects people at a very primitive level in the human psyche...  It is also used within social groups to develop networks of obligations that can be called in at some point in the future in a form decided by the owner of the obligation. This behaviour is pretty much hardwired into humans and we have to make conscious efforts to overcome it.

I think he’s right, and ultimately the feeling in the discussion was that while it’s a shame we can’t trust people to be sensible, it is probably better these days to stay away from anything that could be perceived as having an influence – even if we’re personally convinced it doesn’t!

Karen Bowman supported the idea of using the CIPS ethical code for everyone involved in any way with acquisition decisions,

“Register alone not enough - absolutely! Each time a tender or contract is being dealt with those involved should formally confirm 'no interest' in any of the bidders nor their spouse, partner, family...

And Tim Oakley questioned whether anything is acceptable these days:

Does everybody have a level at which "Token gifts and modest hospitality" become inducements? In which case, should even token gifts (for example calendars, pocket diaries, boxes of chocolates and modest hospitality (Tea, coffee, soft drinks and biscuits) be outlawed?

But he also bemoaned the passing of a more innocent time:

How low has the impression of collective depravity sunken to make the acceptance of modest gifts and hospitality a public sector disciplinable offence?

I believe there is an acceptable level – when I used to visit suppliers, often a long way away from home, it didn’t seem inappropriate for them to buy me a modest lunch, just as I would offer the same if they’d come to my factory / office.  Having said that, I know some large retailers would not even allow that.

And I don’t think anyone here or on LinkedIn argued that just writing it down in the hospitality register made it OK, which was our initial point. Sir Paul seemed to be defending himself mainly on that basis – that it must be OK because he declared it. Sorry, that isn’t good enough.

Since then we’ve also had the acting Head of the Met talking about some failings in their process. From the Guardian:

Godwin admitted officers were "not entirely compliant" with in-house policies on recording and publicising the way they received hospitality, and outlined a number of measures being taken to improve transparency.

I hope he takes on board the need for proper policies in this area, not just a bigger and better register!

Let’s leave the final word to Nigel Robson again:

If people are in positions of impartial authority and wish to avoid criticism, then they have to ensure that their personal and professional ethics are actually up to the task.

Amen to that.

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Voices (8)

  1. PlanBee:

    Wow, I wonder how they managed to build Wembley in 1922 without all that corporate sponsorship? And I think you’ll find a significant proportion of the money for the new wembley came from Lottery funding.

    The vast majority of sporting sponsorship goes into paying exhorbitant 21 years olds £250,000 a week.

    Oh and by the way, the hospitality costs borne by ‘mortgage’ companies and the like end up being funded by Joe public one way another in higher costs.

    A world without corporate sponsorship…..more seats for the true sports fan, less ludricous salaries for sports stars and cheaper mortgages. Whats not to like.

  2. PlanBee:

    re Huhh

    If you want to got Ascot then go. Pay for yourself and go with people you want to be with. Perhaps if there was less corporate hopsitality then sports fans might be able to get tickets for the Olympics, or the best seat in Wembley wouldnt be empty for ten minutes after half time etc etc etc etc

    1. Huhh?:

      And if corporates didn’t spend the money on it – would anybody else be able to afford to go? From my time dealing with these large sporting events, the corporate money subsidised the public side, so you can have nice stadia, racecourses and ticket prices that aren’t through the roof.

      They couldn’t have built wembley without corp sponsors taking a punt on a box 4 years in advance of it being ready! I believe we provided a great deal of working capital as the project progressed.

      Careful what you wish for….

  3. Huhh?:

    Used to manage a massive hospitality budget for a mortgage company. The brokers expected it, nay demanded it. It was very convivial for all concerned. I mourn it’s passing – haven’t been to Ascot nearly enough since…

    Didn’t get too tangled up with the ethics… all of our competitors did it as well, so – right or wrong – to be in the game you had to play…

  4. bitter and twisted:

    And there’s the Innovative Answer: dont be a killjoy – get a hospitality budget and fight fire with fire.

  5. John Ramsay:

    There is nothing difficult about any of this. Suppliers have a duty to try to maximise sales and profits – whatever that takes. Hence it is perfectly acceptable for suppliers to offer buyers whatever it takes to secure business. There is nothing ‘unethical’ about this per se. Business under capitalism is intrinsically unethical.
    However, there are NO good reasons why buyers should accept anything at all (down to and including meals, bottles at XMAS etc etc), personally, from suppliers.
    So suppliers can offer whatever they like. but buyers should simply refuse everything.

  6. David Atkinson:

    Apologies for the missing ‘s’s

  7. David Atkinson:

    Tim Oakley makes a good point of lunches being paid for when on long distance visits to suppliers and his desire to reciprocate.

    Year ago, when I was a buyer for a household-named Amercian power tool manufacturer, we used to take suppliers for lunch and dinner. In fact, in Purchasing we actually had a hospitaility budget for such events. In 25 years in the professiona I never subsequently worked for an organisation that had the same arrangements in place. It says much about how organisations view their suppliers and why suppliers feel the need to pull any lever whatsoever in order to curry favour. Nigel Robson nail it.

    For more on this debate, have a read of this.

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