That’s a good point. He can do whatever he wants as long as he complies with the company rules.
ruhi22 Wrote: ------------------------------------------------------- > I think we need to assume that CFA Code and > Standards apply, unless they explicitly tell us > that they don’t apply. I clearly remember reading > this at the top of the Ethics section during Level > I. I agree completely.
ruhi22 Wrote: ------------------------------------------------------- > So I re-read Standard VI- Disclosure of conflicts. > It says that the service as a director poses 3 > conflicts of interest- > > 1. Receiving stock ownership as compensation in a > publicly traded company > 2. Conflict betn. duties owed to clients and > duties owed to shareholder of the company > 3. Opportunity to receive material non public > information. > > #1 doesn’t apply. #3 doesn’t apply here either. #2 > might still apply in a private firm, where the > holdings are betn. selected personnel only. Any > thoughts? I agree that #2 could apply in a private firm and if the question had implied as such then I would say it should be disclosed. I don’t think that not disclosing you are on a small private BOD is ALWAYS ok, but in this instance it is. If they wanted it to be disclosed, I would have liked to see more info given as to why serving on the BOD might cause a conflict with his employer or clients.
frankly, not disclosing a board membership on a private biotech company doesn’t come near passing any kind of “common sense” test… but i will re-read the CFA sections. and basically we want to pass the CFA test.
wanderingcfa, makes sense. if there was a conflict w.r.t #2, it would have been mentioned. So, there was no potential conflict of interest here. I feel quite convinced now. Thanks for your help!