What’s the scenario?
Priya is an accountant working in the finance department of a medium-sized manufacturing company. As part of her role, she engages in procurement decisions, particularly reviewing supplier bids for various contracts.
Recently, a supplier, ABC Solutions & Services Ltd, who previously worked with her company, sent her a high-end bottle of wine as a thank-you for their past collaborations. She did not request or expect the gift, but, after speaking to her line manager James, she accepted it without much thought.
A week later, James asks Priya to recommend ABC Solutions & Services Ltd for an upcoming contract, skipping the usual competitive tender process. James argues that they have been dependable in the past and moving forward with them would save time, effort, and costs. He also makes a passing comment saying: "They tend to look after people who look after them. Remember that bottle of wine? I hear they even get tickets to concerts and football games."
What should Priya do?
Response and Guidance:
Gifts and hospitality are common in business, but clear policies and safeguards are essential to ensure they do not compromise integrity or influence decision-making.
The CIMA Code of Ethics includes the Fundamental Principle of Integrity which requires members and registered students to be “straightforward and honest in all professional and business relationships.” The concept of Integrity in this context also implies “fair dealing and truthfulness” (111.1A). There is a very real risk of Priya’s integrity being compromised if she were to bypass the typical formal tender process.
Similarly, the Fundamental Principle of Objectivity states that professional accountants must “not compromise their professional or business judgment because of bias, conflict of interest or the undue influence of others” (R112.1). By allowing the gift from the contractor, or pressure from James, to influence her decision, Priya could be accused of having her objectivity compromised.
It must be said that approaches to gifts can vary depending on industry and jurisdiction. The Section 230 of the Code addresses this specifically. Being mindful of local laws is crucial, as in some jurisdictions, giving gifts is standard practice, while in others, it could be considered bribery. Companies operating across different jurisdictions should be especially cautious, as the risk of businesses exploiting cultural norms to create undue influence and feigning ignorance is an ever-present risk.
If Priya has concerns, then a starting place could be to check to see if her company has any internal policies relating to gifts and hospitality. Many companies will have a policy that includes a monetary limit on the value of a gift that it is permissible to accept. They may also have a prohibition against accepting gifts or hospitality during the tender process. Priya can check whether the bottle of wine itself was acceptable. But even outside of that, the fact that James has told Priya to bypass the tender process, there is already a threat to her integrity and objectivity.
It is always important to remain professional when pushing back against colleagues, even in the most trying of times. The degree to which a person objects to the offending behaviour does not dispose of the need to remain professional. Priya could raise her concerns with James, making it clear that there are legal and regulatory requirements for following the formal tender process. Priya can fall back against any company policies, as well as her own regulatory obligations as a CIMA member to support this position.
If James is unwilling to alter his position, Priya can then consider whether to escalate further within the organisation. She should be sure to document the actions she has taken, including raising her concerns with James. If no policy on internal gifts and hospitality exists, then Priya could suggest that this might be an opportunity to introduce one.
By addressing the situation proactively, Priya can protect not only her own professional integrity but also the organisation’s reputation and commitment to fair business practices. One of the best ways to promote ethical practices and maintain high standards of practice, is to embed ethical practices and entrench them in the usual ways of working. Allowing standards to slip will likely lead to problems further down the line. However hard, pushing back against senior colleagues is, the alternative is serious legal and regulatory consequences which are often far more challenging to face.