The Definitive Guide to Gifts, Entertainment, Charitable Contributions, and Third-Party Travel Policies, Part I

“But I want to send my wife to the Manolo Blahnik launch party in Barcelona. What’s the big deal – I’ve gone every year?  Yes, this year I’ll be in Africa on business at the time, but since it has a plus-one, so this time my wife can take my daughter. I don’t understand the problem.”  The foregoing conversation is a real one that I had with a CEO.  Details have been changed to protect the clueless.

We all know that we need a hospitality and third-party travel policy.  Many of the highest profile bribery prosecutions, in the U.S. and abroad have dealt with gifts, hospitality, third-party travel, and charitable contributions violations.  Excessive hospitality, gifts or charitable contributions meant to influence a decision-maker for an unfair business advantage can cause havoc, as well as violations of the FCPA, UK Bribery Act, and local law.

Many compliance officers struggle when putting together an entertainment and third-party travel policy.  What are best practices?  What is normal?  What is excessive?  And most importantly, what is defensible to a prosecutor? 

We at Spark Compliance have researched this issue often.  We constantly give advice and write such policies for our clients.  To help you with this task, we’ve created the definitive guide to gifts, entertainment, charitable contributions, and third-party travel policies.  This is the first of two posts – this one on benchmarking and best practices for entertainment and third-party travel policies. 

Benchmarking your Entertainment and Third-Party Travel Policy

A survey of Fortune 500 companies showed that more than 80 percent of respondents have spending limits of $250 or less for entertainment or hospitality, with approximately 35 percent of respondents limiting entertainment expenses to less than $100.

The vast majority of our clients have spending limits of $100 or $150 for hospitality to non-governmental officials.  In many companies, Internal Audit performs spot-checks of hospitality and third-party travel receipts to ensure the process was properly followed. 

Best Practices for Hospitality and Travel Policies…