Barry Simpson and Roger Harper, the owners of Excel Engineering, a Slough company that provided plant maintenance and emergency repair services, must have thought they had a great customer in Mars UK. The bulk of Excel's £3m turnover came from the confectionery maker.

But bribery was part of the deal. The pair showered Tony Welcher, Mars's middle manager responsible for plant maintenance, with cash and gifts in return for the business. They even paid part of the cost of building a conservatory at Welcher's home. In return, Welcher approved false or inflated invoices. It all came to an end last year, when all three received long prison sentences at Reading Crown Court.

An isolated incident in the otherwise incorruptible world of British business? Unlikely. Laurence Cockroft, chairman of Transparency International UK, the global body that fights corruption, is critical of the way the investigation into allegations of bribery at BAE Systems was dropped. Even so, police investigations into corporate bribery have been running at around 150 a year in recent years, he says. But only a fraction result in convictions. And in a 2006 survey, 41 per cent of 335 construction professionals thought bribery was "widespread" in their industry.

Directors who want to make sure that they don't get caught up in bribery allegations may face more difficult decisions following the passing of the Companies Act 2006. In the past, it was considered acceptable for directors to receive lunches, days out and even trips abroad from suppliers vying for contracts.

Now that directors' duties are codified in statute for the first time, directors must ensure they don't accept any "benefit" that might conflict with their duty to the company, says Richard Barham, corporate partner at law firm Denton Wilde Sapte. Taking a supplier's freebie, with the clear understanding that it will get some business as a result, could now be illegal.

Barham says: "Directors will need to be careful to make sure that any benefits they do receive personally from being a director are at a level where they don't create any suggestion that their decision-making is influenced by the gift."

The act places a duty on directors to adopt business standards that maintain their company's good reputation. If they're going to do that effectively, they may need to make it clear to employees that giving or receiving bribes won't be tolerated, says Barham.

"It will be expected that the company would make it clear to employees, either in their handbook or terms of employment, that they should not give or receive any bribe," Barham says. But he agrees there's a grey area that is not easy to define. "Much will depend on the intentions of the giver as well as the thoughts of the recipient," he adds.

Five ways to tackle bribery

1. Have a written policy on bribery and ensure staff know the company takes a zero-tolerance approach.

2. Include in the policy limits on the value of hospitality staff members can offer or accept.

3. Introduce rules on purchasing and procurement so that staff are held accountable for the methodology they used when either buying or selling.

4. Provide an opportunity for whistleblowers to report suspicions anonymously—but investigate allegations with caution.

5. Report well founded suspicions to the police.