Beware the Golf Tournament

Ah, the tension between the need for “face time” and those ethics policies that prevent managers and employees from accepting “stuff” from vendors.  We’ve tried it all.  First, we put limits on gifts:  $25, $100.  The questions then sprung up: Is that face value?  Market value?  Then we tried the “No more than $200 per annum.”  From this approach sprung more questions and refinements, “Could I count this against my next annum?”  The response of confused “stuff” police was, “How many annums have you had this year?”  The new math on “stuff” soon drove us to “Nothing!” policies on “stuff.”  Nothing, and we mean nothing.  We even sent out cards at Thanksgiving, “Thank you for understanding we neither give nor accept gifts.  We wish you fine holidays.”  Translation:  Don’t even attempt “stuff.”  Where there’s a yearning for face time and a corresponding human need for stuff, the market finds a way. It found golf.  More precisely, it found the golf tournament.

Even in companies with “no stuff, NONE!” policies, the golf tournament is alive and well.  However, the beauty of the golf tournament is that it is cloaked in the veil of charity.  The Wall Street Journal profiled the CVS Caremark Charity Classic, but this is but one tournament in thousands held around the country that spell out some troublesome practices and trends.

Here’s how it all works.  Company A’s executives are members of the board of a charity.  Company A may vene itself be a major donor to the charity.  The charity may even benefit many of the company’s customers.  The charity holds a golf tournament to raise money.  The executives participate in the tournament.  In some cases, Company A even pays the executives’ participation fees (good for company image).  Company B is a supplier to Company A or a vendor that would like to be a supplier.  Enter the desire for face time.  In some tournaments, Company A executives turns to every Company B executive in the supply chain and ask for participation.  And participate they do.  They pay their entry fees because Company A executives asks.  But sometimes Company B folks want and get more.  Company B antes up the dough for primo participation in the tournament.  If a VP of Company A is playing a round with a celebrity, Company B pays enough to get its VP in the same foursome.  Not only is there the face time, there is the ever-so-subtle quid pro quo hook of, “Don’t you remember how much I contributed to your charity?”

In some tournaments, the relationship is less subtle.  All the Companies B become underwriters for the golf tournament.  Their company names are all over the well publicized event.  And in exchange for underwriting the event?  Why, Company B executives are guaranteed time with Company A executives.  There is nothing quite like discussing business one-on-one with someone who must feel some gratitude for your company’s $50,000 underwriting donation to your favorite charity via the golf tournament.

In some industries the golf tournament access has become so sophisticated that the vendors actually pool their resources to come across as heavy underwriters who then garner heavy face time.  But there is also the sophisticated twist of the auction that has become part of the golf tournament.  Generally conducted during the awards dinner at the tournament, Company B executives participate in an access auction that finds them bidding for trips that Company A executives will take with them.  The trips could be golf outings or just relaxing weekends.  But, Company B executives get one-on-one face time with Company A executives, and all without the other vendors tagging along as they will be at the golf tournament. Some auctions even permit the COmpany B executives to choose which Company A executives they want as part of their trips.

Some employees have called the golf tournaments and auctions a pay-to-play system that they find troublesome.  Vendors, on the other hand, respond that they can play all the golf, fund all the tournaments, and win all the executive auctions they want, but if they do not deliver quality products on time, they are out.  In short, no matter how much golf is played or money is paid, both sides operate with absolute integrity. They kid themselves.  Golf tournaments are fraught with conflicts of interest.

There are only two ways to resolve a conflict:  Don’t or disclose.  Many companies do not disclose.  Most companies have not yet explored the question of whether they should or should not sanction the golf tournament access techniques.  Thsoe who raise the golf tournament issue are skewered as Scrooges who would deny worthy charities all this cash.  However, the potential for abuse here is great.  Payment for access is a risky proposition that requires introspection that companies have avoided too easily beneath the protective cloak of charitable purpose and supposed innocence of “just a round of golf.”

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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