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Ethics Q&A: How to Navigate the Planner-Supplier Relationship

From commissions to loyalty points to expensive gifts, understand where to draw the line.

For a variety of questions related to meeting-planner ethics, here are answers provided by Joan Eisenstodt, president of meetings consultancy Eisenstodt Associates LLC and former chair of the American Society of Association Executives' ethics committee.

Q: Should hotel planner points be given back to the organization? My job at a non-profit has so few perks that I count those as my own. What if I simply ask my managers about it, and they say it is okay?
A: Points are given for individual stays and for entire meetings. It is best for all involved if the policy is in writing and that you have specific written permission to keep any points and, if so, under what circumstances you may do so. If you are asking about points earned for the meeting itself, it’s smart to have a policy that details what will also happen with any points earned or expected from a future meeting, in the event that the person who might earn the points leaves the employ of the organization.

Q: So, asking for or accepting points for an event after you've left the company is unethical?
A: Most points are rewarded after the final account is paid. If points are given at the time the contract is signed, before the meeting occurs, and the planner leaves, I think the ethical issues are compounded. Further, asking for points at any time is, to me, unethical based on all the industry codes. One viewer sent in this comment: "Totally agree with Joan here. Most of the time I negotiate a comp room for myself during the meeting so I get no points for that room. Points earned for the signing go to the client."

Q: Does the use of third-party sourcing vendors help mitigate the risk of in-house planners receiving perks or attending fam trips?
A: It’s best to have all policies for perks or points or any other benefit in writing, regardless of using a third party or not.

Q: Do you feel as conflicted about accepting a gift if you receive it after a contract has been signed?
A: I prefer to receive no gifts from vendors with whom I’m working, regardless of timing or purpose of the gift. Again, having a policy that governs when and how and if you may accept gifts and in what dollar amount is a best-practices guideline.

Q: How can you gracefully turn down a tangible gift or entertainment opportunity? The resistance to a planner saying no can be very high in some circumstances. Is it better in those cases to simply accept a gift, but then use it in your office or donate it to a charitable cause?
A: For both gifts and meals/entertainment, a written policy is always best as a guideline. If there is no internal policy, request that one be written. With meal or entertainment opportunities, an offer is usually not a surprise–that is, no one shows up to take you to lunch or dinner without asking first. Therefore, simply disclose your policies at the start of the relationship, and have an appropriate response ready if something is offered. As for gifts: With the policy disclosed to your business counterparts up front, there might be fewer gifts coming to you in the future. If there has not been disclosure of policy ahead of time, then it can sometimes be awkward to decline a gift (and difficult for suppliers who are tasked with both entertaining and giving gifts to specific clients). In any case, you should know the implications of a gift's acceptance. Remember that some gifts might be taxed because of their value, so donating it or even raffling it off in the office might pose an issue. Check with your organization's attorney.

Q: Do you consider "swag" a gift?
A: I smiled when I read this, because when I’m conducting training I always provide creative tools as gifts for people to keep, and I often give prizes of books for participation. “Swag” is often given to everyone in attendance, and sometimes the value is over the limit of what your policy may allow you to accept. Again, rely on policy.

Q: Are you more sensitive about ethics because you work for yourself, i.e. accepting fam trips without an obvious need for that location? My agency is fine with that since it is not footing the bill.
A: An interesting question. All we have in this world, especially professionally, is our reputation. Whether one works for themselves or for others, how one behaves in a profession follows them; there can be both short- and long-term consequences if one behaves unethically. The industry associations; the CMP, CAE, and other designations; and most associations, corporations, and government contractors and agencies have ethics policies to guide behaviors. As an entire industry, we have found ourselves in "hot water” ethically because of the behavior of some. I think this is a good question for you to explore with others you work with and with your clients. And it’s always smart to have all policies in writing.

Q: You mentioned you are paid by your clients, not by commission. If you are paid by a client at a discounted rate, is it ethical to also get a commission, assuming all is transparent?
A: I’d say that my rates have always been "discounted" in that I'm rarely paid what I’m worth or what I propose; therefore, a negotiated fee is contracted. Whether it is proper to also receive commission should be decided through a negotiated, stated, and open arrangement between you or your company, the client, and the entity that would pay the commission.

Q: Is it ethical for hotels to tell organizations they could get better rates if they don't use third parties?
A: There's actually a bigger issue in play here. First, it depends on what the RFP states in terms of who the client is. Second, it depends on what the contract between the third party and its client says. Third, it depends on what the policies—ethical and other—are for each party. I’m hoping others will think hard about this after reading this.

Q: What are your thoughts on giving and receiving referral fees?
A: If the question is whether I think it’s ethical or not, it depends on what kind of referrals you mean. With referrals from one planner or a speaker to another company, or from a third party to a hotel, if there's an expectation that by saying, “I think so-and-so is interested in your property or services and thus, if you get the business, I expect X,” that for me is questionable. Years ago, on an online industry discussion group, an association planner asked about ideas for properties and provided their specs. A third party took that and pasted on its letterhead and sent it to a hotel with an expectation of receiving commission if the meeting booked. In no way do I think that is ethical. In other cases, ethical propriety is based on a transparent agreement between all the parties.

Q: As a supplier, do you take your clients out or send them gifts?
A: I consider myself a planning consultant and yes, I have sent gifts to clients—usually in the form of food for all in a department or, as noted above, if I’m conducting training I give out useful or creative tools to use. But I do ask ahead of time if those are permitted.

Q: Would reporting someone for using a professional designation when they don't actually have it depend on your position in the company? For instance, I know some people who use an industry designation and that angers me because I am studying hard to earn that designation myself.
A: I know that it’s awkward to report someone for using, say, the CMP designation when he or she has not earned it or has not renewed it. However, I think reporting someone for what is clearly unethical behavior is incumbent on all of us, if we want to maintain the respectability of our profession.

Q: Do you consider overrides and rebates the same as commissions and kickbacks?
A: It depends on the situation. I looked up override because I was not familiar with the term in this context. (I’ve never worked in hotel sales.) This is the definition I found: “Commission received by a sales manager (or the upline in network marketing) on the sales made by salespersons (or the downline in network marketing) working under him or her. ... Fee paid by a seller to a broker in case the broker deals directly with a buyer.” If the terms are negotiated and disclosed in the proposal and then contracted by the parties, it might all be kosher. If any of this is under the table, though, then I consider that to be unethical. The industry is not unified, from what I’ve read about this topic, as to a clear ethical line.

Q: Simply stated, how can a commission be unethical if there is full disclosure?
A: Good question. And again, it depends. Sometimes what is called “full disclosure” is actually not to all the parties and is not upfront. Sometimes the third party doesn’t allow any access to the end user/client by the entity paying the commission. Sometimes the commission is disclosed only to two of the parties and not the end user. I performed a client audit years ago and uncovered just that kind of relationship—much to the surprise of the end-user group who was booking meetings through a third party and had no idea the third party had a separate agreement with the hotel company, and things got very sticky. So, if we define “full disclosure" as "in writing and agreed to with signature by all parties,” it might be ethical. But I’ve seen so many situations—including sliding a commissionable agreement into a signed contract after signature—that I’m skeptical of the term "full disclosure" being just that.

Q: What are your thoughts about companies that require rebate/override/commission agreements with supplier partners and within those agreements require that the supplier is  not able to disclose this to others, especially clients?
A: If it looks, walks, and quacks like a duck...

Q: You have talked about ethics from the perspective of the meeting planner's responsibility. What's the ethical responsibility on the side of the hotels and other vendors who are offering gifts and entertainment? Isn't it unethical for them to offer it?
A: It is simply best for all parties to disclose their ethics policies up front and ensure that all other parties know those guidelines. Yes, it is difficult for many who sell to not entertain because their requirements to make so many calls or entertain so many people and close business by month’s end is challenging. I’d like to see the industry change on this, but that is a subject for another time. To be safe, ask and even request a written statement of what is and is not ethical policy for a business counterpart before any work begins.

Q: Have you ever been in a situation where a client has used the intellectual work you have done in sourcing to contract directly with a hotel? How would you handle that?
A: To the best of my knowledge, I have not been in that situation. I’d go back to what the contract between the parties stated. Alas, I’ve learned that in many relationships with third parties, there is no contract and thus it becomes a "she said/he said" situation. It would be best if hotels asked for letters up front clarifying who are authorized parties for each aspect of the relationship.

Q: Changing the terms of a contract after it is signed is illegal, not just unethical. Correct?
A: Not necessarily, if all parties agree in writing to the changes.

As evidenced by many of the situations above, having a written policy and/or a letter or statement in writing about what is and is not permissible in a business relationship is the best guideline. This allows buyer and seller to understand all the parameters. But because so many business relationships become friendships, or at least professional friendships, it is often difficult to smoothly draw a line. As noted in the webinar, it’s smart to disclose parameters by saying to your counterpart at certain moments, “I’m now wearing my business (or professional) hat.”

For more on planner and supplier ethics, check out this article.

NOTE: The information and advice above, like that presented during the webinar, are the opinion of Joan Eisenstodt of Eisenstodt Associates LLC and do not constitute legal or professional advice. In all instances when there are policy questions, a planner or supplier should consult an employer’s or client’s policy, or human resources personnel, or attorney, or perhaps even one’s own attorney. It is always recommended that ethics policies and any communications regarding those policies be in writing.


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