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Zero-Tolerance Policy
To avoid even the appearance of impropriety, CIOs should not accept any gifts or meals, argues Jack Marshall, president of ProEthics Ltd., an ethics consulting firm in Alexandria, Va. "The right amount is zero" for the value of acceptable gifts, he says. "These guys aren't giving you gifts because they like the look of your face." They want influence. They want some payback from their investment.
Even when gifts are of nominal value, they can look bad if someone later questions the way the CIO handled the contract. Consider the case of Wandzia Grycz, technology chief of the city of San José, Calif. She resigned after critics claimed that she and other city officials unfairly favored Cisco Systems on an $8-million contract. If anyone can show she accepted a $10 lunch from Cisco, that wouldn't look so bad to most people. But if a CIO in similar straits had accepted repeated meals or perks of nominal value, he could be accused of having accepted a bribe, says Marshall. (No such accusations have been made in Grycz's case.)
Since most midmarket companies have not had the time or resources to invest in developing a well-thought-out set of ethics guidelines, midmarket CIOs are often left to use their own judgment on what is or isn't an acceptable part of vendor relations (see Establishing an Ethics Policy).
Without policies to guide them, midmarket CIOs tend to trust their instincts, which vary widely. Some were determined to avoid even the appearance of impropriety, which is the gold standard of ethical behavior. These CIOs would take only a cup of coffee. Others were willing to accept more, and even maintain friendships with their vendors, saying it did not affect their judgment. Here are their rationales for how they deal with vendors on the issues of gifts, references, customer councils and friendships.
Rolling in the Trojan Horse
Although many gifts are really of just nominal value, Marshall of ProEthics points out that they make the recipient feel better about the giver, potentially clouding the CIO's judgment when it comes to choosing the best vendor.
None of the CIOs we interviewed had ever accepted take-home gifts, but their policies varied widely on meals and sports tickets. Most would not accept meals from potential vendors, especially during bidding periods. Aldo Moreno, CIO of Herbalife International, a $1.2-billion-a-year meal replacement and vitamin wholesaler in Los Angeles, says his vendors have offered to take him out to any restaurant he names. One even offered dinner on a sailboat. Moreno always turns them down. "Typically when we're going to negotiations, I don't go out to dinner. I don't go out to lunch. We meet in my office. That's it," he says.
Once the vendors have been given a contract, CIOs are much more willing to deal with them socially. De Brino of Compass says he'll let current vendors buy him meals, even though he knows they may be bidding on new projects in the future. But he always picks up the next one, and he keeps notes so he doesn't forget whose turn it is.
Mandi Turner, information services director for $60-million Louisville, Ky., law firm Greenebaum Doll & McDonald, says she doesn't accept expensive meals but doesn't mind accepting inexpensive lunches. She also accepts tickets from current vendors to parties related to the Kentucky Derby, mostly because it gives her access to her vendors' engineers. Turner says she works at the events, although not everyone does. "You see people there that are having their mint juleps and that's all, but you also see the serious people," she says. She isn't interested in parties without the engineers. "Whatever money you would have spent on that lovely little party, just put it into a discount," she advises vendors.
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