Ethics - Directorship

Apparently, according to the asset mgmt code, it is not ok to hold a directorship position in a company if it poses a conflict of interest. according to EOC 8 in that reading.

This IS ok under the Code and Standards as long as it is disclosed, but NOT under the Asset manager code. which I find rediculous.

I don’t think there is a difference. It clearly says, “Schmmidt does not disclose his board service to SZR clients” in the case. And since he is receiving stock options and it is a conflict of interest, wouldn’t he need written permission from all parties involved?

He would, under the code, but the answer states that he needs to terminate the relationship, not just disclose it.

guidline A.3 of the asset manager code states that a manager must REFUSE to participate in any business relationship that could reasonably be expected to affect their idependence, objectivity, or loyalty to clients.

Good distinction thanks… It also says “of more than a minimal value” which is to be determined by the firm. And to refuse any cash gift.

Damn, but then at the end it says, “This provision is not meant to preclude managers from maintaining multiple business relationships with a client as long as potential conflicts of interest are managed and disclosed”. What do we make of that?