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.”
