Many SMEs whose corporate hospitality has been at the heart of their customer service are now falling foul of ‘super compliance’. Put simply, their concerns about the UK Bribery Act mean they have removed all customer gifts or goodwill incentives. While ensuring your staff are fully conversant with the Act is good business practice, it’s equally as important to know what you are still able to offer clients.
Sensible promotional entertainment expenditure is not an offence under the Act, but the Serious Fraud Office may take action against your organisation if any particular case of corporate expenditure appears to fall outside the bounds of reasonable and proportionate hospitality.
You can help to protect your organisation by:
1 Issuing a clear policy on gifts and hospitality. There is a full defence from prosecution if you can show you had adequate procedures in place to prevent bribery.
2 Ensuring the amount of expenditure for a particular item is within the limits set out in the policy.
3 Appointing a senior colleague within your organisation to act as bribery officer. Their role is to grant approval for cases where expenditure may exceed corporate policy limits.
4 Ensuring expenditure is proportionate. The government does not intend to inhibit genuine hospitality or reasonable and proportionate business expenditure, so you can continue to provide bona fide hospitality and promotional expenditure.
5 Keeping evidence that you recorded the expenditure. It’s also wise to record those offers of hospitality that were declined as an indication of your organisation’s ethical practice and willingness to turn down more lavish gifts.
6 If offering gifts to overseas customers, ensuring the recipient was entitled to receive the hospitality under the law of their country.
7 Above all, staff training so that all within your organisation are fully versed on what they can and cannot offer and accept as gifts within the working environment.
The Act does not aim to stamp out corporate hospitality – rather to ensure that all gifts and hospitality are transparent, proportionate and effectively monitored and recorded. Tickets to a high profile sporting event, an invitation to the rugby or lunch with a supplier are all still accepted as legitimate business activities.
Unless companies have in place adequate procedures such as evidence their staff have been trained on the implications of the UK Bribery Act, there is a grave risk that they will unknowingly commit offences. But procedures serve another purpose. They also define the scope of legitimate business development activity. And without procedures companies may adopt an over-cautious approach and lose ground to their competitors.
Together with law firm Reynolds Porter Chamberlain, Idox Information Solutions has developed a new e-learning programme on the UK Bribery Act. Not only is it a quick and effective way for SMEs to train their staff, it provides an electronic record of who has completed the course. You can also download a 7-step Guide on Complying with the Act from Idox.
Food has become an increasingly profitable business and customers are always looking for something tasty and affordable. A few years ago, low fat products became very popular, despite actually containing a lot of sugar to compensate for the low fat taste. When customers noticed that they gained weight from eating too much sugar, attention turned to organic products with as few artificial additives as possible.
Matching what customers are looking for and the law
Whilst businesses are trying to match customer demands, they also need to try to keep their costs down in order to make a profit. This has led some companies to try to circumvent regular supply chains and take matters into their own hands.
This can occasionally give rise to legal disputes. Consider, for instance, the fact that some foods are protected because of their specific origin. For example, Champagne is from the Champagne area of France; if it is not produced there then it cannot be called Champagne.
Another example is Parma ham, which needs to come from Parma in Italy. A couple of years ago, the supermarket chain Asda tried to cut the cost of importing Parma ham by opting to slice and pack it in the UK. Workers in Italy whose livelihood depended on selling authentic Parma ham did not appreciate this.
The matter went as far as the European Court of Justice, which ruled that the ham had to be sliced and packed in Parma in order to be called Parma ham. However, it is allowed for supermarkets to cut the ham at the deli counter for customers.
In what way will these types of regulations impact us customers?
Customers will often be looking for products that are distinctive for one reason or another, so the provenance might actually matter. This may mean that shops have to sell the original rather than substituting it with something cheaper and putting their own brand on it. And by protecting a name, you might also help to sustain an industry of small suppliers and local producers which leads to more choice all round in the long run.
Of course, this may increase costs for the retailer at the sharp end of the food chain. It is often tricky to balance competing interests, but for any small business it is better to be aware of these regulations at the start, before a dispute starts. That could lead to a price mark-up that's in no-one's interest!
Check Contact Law's website for a quiz where you can test your knowledge of protected foods.
Back on the 26 May 2011 the EU passed some amendments to the Privacy and Electronic Communications Regulations, further expanding its attempts to protect user privacy on the internet (in stark contrast to David Cameron's desire to wiretap every UK citizen). However, the requirements were given a grace period of 12 months before they came into effect. That means that website owners should be compliant by 26 May 2012 – are you?
Here's the definition of a cookie as used by the Information Commissioner's Office (ICO):
“The Regulations apply to cookies and also to similar technologies for storing information. This could include, for example, Local Shared Objects (commonly referred to as “Flash Cookies”), web beacons or bugs (including transparent or clear gifs).
A cookie is a small file, typically of letters and numbers, downloaded on to a device when the user accesses certain websites. Cookies allow a website to recognise a user’s device.”
The key change in the wording of the EU regulations is that whereas previously it was quite acceptable to assume that a user is happy to have a cookie from your site downloaded to their machine as long as you gave them a way of opting out, now it is a legal requirement to get consent before you can store a cookie.
There are, however, a few examples of exemptions to this requirement. The biggest is that cookies used to track goods being added to a shopping basket are considered to be strictly necessary and therefore exempt from the new rules.
At this point there seems to be a step missing which I certainly feel is going to harm our own users’ experience of our site, and thus harm the business.
This in itself isn’t an issue. But how can we tell if this is a user we’ve had before and whether they need to be pestered about cookies again? Simple, we’ll put a cookie... Oh! Any user not accepting our cookies will have a “Please let us monitor you” alert flash at them each time they hit the site.
An alternative to this is to show a display once and then assume consent. However the ICO says that, as knowledge about the extent of cookie tracking is so low, it’s not acceptable to do this.
There are several reasons why it’s a valid concern to UK businesses:
However, the ICO has put together a very detailed guide explaining the changes in the law and giving some examples and suggestions of both exemptions and possible ways of tackling the issue. It’s worth taking a look.
Michael Derges is a writer and researcher for Stinkyink.com.
• Read Rory MccGwire’s blog on the Law Society Gazette, and check out his comment below.
• Robert Peters looks at the marketing implications of the new cookie regulations on Marketing Donut.
• And IT Donut has a full guide to the new EU regulations on cookies.
I was recently tipped off by a friend who manages a large high street bookstore that I was infringing trademark law on my website. We make homewares and accessories from recycled and vintage fabrics, and like many artisans and craft-based companies, one of our products has a Union Jack inspired design. It being the year of Britain’s hosting of the Olympics, we wanted to flag up our cushion. The wording in question was this: “Celebrate the Olympics in style with our Union Jack cushion”. Having read the guidelines my friend sent me, I promptly took down the text in question and quickly removed every other mention of the Olympics on my website.
Olympic trademark infringement phrases and symbols
In 2006, after London won the right to host the 2012 Games, the London Olympic Games and Paralympic Games Act was adopted to protect signs and representations relating specifically to the 2012 Games. This followed a previous Act, drawn up in 1995 to protect the symbols of the Olympic movement. However, the 2006 Act goes to even greater lengths to restrict the use of terms and phrases associated with the Olympics. They are:
Ignoring these restrictions and producing advertising, promotional material or web content which uses them could therefore result in hefty fines, or worse, court action.
If, like us here at OriginalStitch this is worrying you, then I suspect you are not the only ones. Small businesses without in-house brand consultants or PR firms to keep them abreast of legal issues such as this are at risk of incurring the wrath of LOCOG (London Organising Committee of the Olympic and Paralympic Games). Small businesses could unwittingly already be investing in marketing tactics they may be forced to pull.
LOCOG’s greatest fear appears to be that ambush marketing tactics will be employed — you can read an example of this in Mike Lynd’s article on Olympic trademarks; where companies try to ‘jump on the Olympic bandwagon’ with outrageous stunts to get their logo or company insignia noticed on the back of events hosted by the Olympics.
Jumping up and down waving your company’s logo at the riverside of a rowing event is ambush marketing — it could give the impression you are in some way affiliated with the event when you are not; in reality it is the larger brands who have the funds to stage bigger and more spectacular stunts who scare LOCOG, but they are doing it knowing the risks they face; we small businesses, probably do not.
A small business making and selling red, white and blue bunting for example, and wanting to attract people having Olympics get-togethers might spend £150 on flyers with a phrase as apparently innocuous as the heading we used on our website. But that’s a lot of money to a small business, especially if they have received no warning of these restrictions. The bunting selling business clearly isn’t trying to suggest that they have the full weight of the Olympic association behind them, or that they are an authorised Olympic pretty bunting retailer — they are simply catching a wave of public interest in an issue or event, and hooking their product onto it.
Million-pound exclusivity contracts
Most of us understand why these protections must be in place. They are there to protect the companies who have paid millions in sponsorship and spent months or years negotiating exclusivity clauses in their contracts as authorised Olympic associates; and clearly it is necessary to have punitive means of targeting unscrupulous individuals or companies who seek purposefully to con consumers with the impression they are endorsed by the Olympic organisations.
No matter what our view on the consequences of these exclusivity contracts on small businesses, or our opinion on the extraordinary lengths LOCOG are prepared to go to in order to stifle brands’ use of the Olympics in their PR and marketing message calendars, we have little choice but to play ball. But how to play it safe?
Says Mike, “The laws surrounding the various Olympic words and symbols are extraordinarily draconian; if you as a householder living in Stratford display a poster in your window for the "wrong" cola company or sports shoe company, the police have an absolute right to break into your home to remove the poster. It remains to be seen whether the law will in fact be enforced in a drastic fashion.“
But there are things you can do. And to ignore this momentous event in 2012 would be both a shame and a waste. You can read my ideas of how to market your business with an Olympic theme without breaking the law on Marketing Donut.
The new EU Consumer Rights Directive has been adopted. The new legislation seeks to strengthen consumer rights in all 27 EU countries, particularly for those who shop online.
Currently, UK customers are protected by a wide range of laws - such as Consumer Protection from Unfair Trading Regulations and the Distance Selling Regulations - but the new EU law should simplify matters for shoppers and businesses alike. The UK has two years to implement the rules at national level – the new law should be in force by autumn 2013. So what changes should businesses and consumers be aware of?
Online consumers will receive protection against “cost traps”. An example is when fraudsters try to trick consumers into paying for items that are available free elsewhere (eg horoscopes or recipes). Consumers will have to confirm in advance they understand they must pay for such items.
Increased price transparency means traders will have to disclose the total cost of the product or service, as well as any extra fees. If online shoppers aren’t properly informed before ordering, they won’t have to pay any such additional charges.
Pre-ticked boxes on websites will be banned. For example, currently, when buying a plane ticket, you may be offered travel insurance via a “pre-ticked” box, which you have to untick if you do not want it.
Consumers will also get 14 days to change their mind after purchasing (currently, under EU law, it’s seven days). If a seller hasn’t clearly informed customers about their withdrawal right, the return period will be extended to one year.
Consumers will also enjoy a right of withdrawal for solicited visits, for example, when a trader calls in advance and presses the consumer to agree to a visit. The right of withdrawal is extended to online auctions, although goods can only be returned when bought from a professional seller.
The withdrawal period will start when the consumer receives the goods, not when the contract is concluded (as is currently the case). The rules will apply to internet, phone and mail order sales, as well as sales outside shops (eg doorstep sales).
Consumers must be refunded within 14 days of their withdrawal (including delivery costs). Generally, traders will bear the risk for any damage to goods during transportation, until the consumer receives the goods. Consumers will receive a model withdrawal form they can use if they wish to withdraw from a contract concluded at a distance or at the doorstep.
Traders will no longer be allowed to charge more than the costs they incur when accepting card payments, neither will those who operate customer telephone hotlines be able charge more than the basic telephone rates.
If traders want consumers to pay for returning goods they must clearly inform consumers of that fact in advance. They must also clearly give at least an estimate of maximum costs of returning bulky goods bought online or by mail order.
Information about digital content will become clearer, including its compatibility with hardware and software and any technical protection measures (eg limited rights to copy content).
Mark Williams is editor of the Start Up Donut
The heart of the term social media is the word 'social', suggesting that the online world is for interacting, communicating and sharing knowledge. The aim of having social media guidelines for your business is that they should mirror this mindset with the idea that employees should behave as they would do in the offline world — with inhibitions, decorum and common courtesy. This is especially so as it is still common for people to alter their online and offline personas. Many still use the internet as an outlet for airing their thoughts with little consideration of the severity and long term effects of their actions. This is not to say that employees cannot be trusted, instead they can be positively guided to utilise their talent and act in a way which protects their own and the company’s online reputation. Some do's and don’ts for setting up social media guidelines for your employees are listed below:
1. Do choose trust and empowerment.
Social media use can instill fear and angst in the minds of businesses. Most instantly assume employees cannot be trusted or will not act in the company's best interest. Nevertheless, they must learn that the paradigm shift is here to stay. Rather than fretting about the potential negatives they must realise its benefits. It is never a good idea to set stringent controls on social media in the workplace or via guidelines. Banning social media in the workplace or heavily restricting use could result in a backlash. Employees are potential social media representatives and to make social media work properly across the enterprise they must be empowered to leverage social media in support of the brand and its products. Therefore guidelines should protect and advise on social media, not control or restrict.
2. Don’t forget to cater for all platforms.
This includes blogs, forums, message boards, social networks (Facebook, Twitter, LinkedIn etc), user generated content (ie YouTube, Flickr etc) and any other relevant channels. Create an individual framework for participation in various online communities. Covering all platforms avoids any confusion or loopholes, increases social media presence and identifies how social media channels overlap (ie status updates, uploading photos and friend/connection requests). Social media guidelines could include how to use each platform for business and personal use, how to utilise each platform’s functionality and suggestions on the most appropriate behaviour for each platform.
3. Do stress the importance of privacy and confidentiality.
It is essential to outline what information is regarded as private, confidential and sensitive, and which should never be disclosed in any circumstance. The next step is outlining how to behave when something is a grey area ie tweeting about a new client project — does the client want to be mentioned and is the project 100 per cent finished? Hold a team meeting at the beginning of each week to identify tweetable topics or assign a person as point of contact to give consent on disclosing potentially sensitive information. Privacy should also extend to client information, geolocation check-ins, other brands and competitors.
4. Don’t diminish personal responsibility.
It needs to be stressed that posting content online becomes permanently available thus you are accountable for your own reputation and digital footprint. Your online relationship changes and becomes even more essential as soon as you identify that you’re an employee of a firm or speak in any kind of professional capacity. Therefore, disclaimers should be encouraged to make it clear that you are an employee of a firm, but are interacting on behalf of yourself and not the company. It should be made clear that this doesn’t give a person a reason to be dishonest, rude or inappropriate. If someone would like to represent the company on a deeper, professional level there should be a point of contact or training offered to do so.
5. Do persuade employees to add value.
This leads onto thought leadership. Social media is about people, not logos. If employees want to communicate in a professional capacity then put suitable guidelines in place to cater for this. Guidelines for acting on behalf of the organisation should include:
By encouraging employees to demonstrate the depth and breadth of their expertise with information tailored to your clients’ needs, it can help position your company as a leader and trusted resource.
Overall, the ideal guidelines should protect the reputation of the company on all platforms, be in line with the company's vision and act as a best practice engagement strategy.
Award-wining marketer Rob Wilmot has devised a fail-safe, efficient, and fun presentation that shows you how to boost your profile and your business in 2011 through LinkedIn.
Among professionals, particularly lawyers, LinkedIn is increasingly essential to thriving trade. Launched at London’s Online Info Fair this month, Rob’s presentation shows you how to make the most of the site and its potential.
If you’re still dithering about using social media – for yourself or your work – Rob’s snappy slides will convince you to take the plunge (then show you how). And even if you’re a particularly seasoned user, Rob’s inventive tips explain how you can build more genuinely useful connections, master the delicacies of online etiquette, reach the people you need to know, and network yourself new friends and new business.
Almost a year to the day that Woolworths folded, the news broke that the bookshop chain Borders UK has also gone into administration.
Given the current economic climate, becoming insolvent - having debts that you are unable to pay - is a very real threat to many small-business owners. If you’re struggling to keep on top of paying your creditors, just ignoring the situation and hoping it will go away is probably the worst thing you can do.
You can reduce the risk of insolvency by keeping good control of your cashflow (see the section on ‘Keeping your cashflow healthy’ on the Start Up Donut). Building a good relationship with your creditors, such as your bank, can mean that they will be more supportive if you do run into financial difficulties. Choosing an appropriate structure for your business can also offer you an element of protection; for example, trading as a limited company offers the most protection against personal bankruptcy. If your business is already in financial dire straits, a licensed insolvency practitioner can offer advice on the best course of action to take. Just blindly trading on in the hope that you will be able to turn the business round can prove very costly to you personally if it does not work, and you could actually make the situation worse.
Go to the Insolvency section on the Law Donut website for further information.
The Government’s Insolvency Service website also offers advice on different aspects of bankruptcy, insolvency and compulsory liquidation.
Businesses will welcome the opportunity to give their views on amending the insolvency rules to help businesses facing financial difficulties.
The Insolvency Service is consulting on proposed measures that will help viable firms survive in difficult times. When a company becomes insolvent, it can affect employees, directors, creditors, and suppliers alike, and these proposals are seeking to reduce those knock-on effects. The main proposals are:
The Insolvency Service is particularly keen to hear the views of small businesses, who are likely to benefit most from the proposal that rescue finance should rank in front of other administration expenses. Also, while the proposals may have a direct effect on larger companies, the indirect effect of the measures may be felt by smaller businesses as suppliers and creditors of those companies. Businesses have until 7 September 2009 to respond to the consultation.