David Saul, CFA, heads the trust department at Savage National Bank. Fairway Enterprises invites Saul to sit on its Board of Directors. In return for his services on the Board, Fairway offers to provide Saul and his family with access to the facilities at Wilmont Country Club at no cost. Saul will not receive any monetary compensation for his services on the Board. According to CFA Institute Standards of Professional Conduct, which of the following actions must Saul take? A) Saul must reject the offer to serve on the Board of Directors. B) Saul need not disclose to Savage Bank his acceptance of the offer, because the offer involves no monetary compensation. C) Saul must disclose in writing to Savage Bank the terms of the offer whether or not he accepts the offer to serve on the Board of Directors. D) Saul must obtain written consent from all parties to only if he decides to accept the offer to serve on the Board of Directors.
D
D?
D
Here is the hard and fast part; how do we distinguish all parties involved from just written consent from the employer? D is the answer.
the potential conflict of interest from serving the board?
I would say because each job could possibly take time and effort away from the other employer, hence he needs to approvals. Not too sure if thats right though
In all cases of outside employment do all parties need to be in agreement?
he has to obtain consent from all parties involved because he owes duties to all his employers
Not as long as working at one place won’t effect the time or effort of working @ the other institution/
getterdone Wrote: ------------------------------------------------------- > I would say because each job could possibly take > time and effort away from the other employer, > hence he needs to approvals. Not too sure if thats > right though I agree with getter
Say he joins a nonprofit organization, teaching Finacial Literacy on saturdays, or sundays. And he gets a small compensation, would he need only the acceptance of his employer for the compensation arrangement?
what if he gets this new job on the board and keeps his old job then he receives an additional compensation from an account that he manages with the first firm does he have to disclose this additional compensation to the new firm where he serves on the board?
yes, but not necessary from the non-profit, any additional compensation needs to be approved by your current employer. KJH am I right or wrong in my asuumptions in regards to your questions?
map1 Wrote: ------------------------------------------------------- > Say he joins a nonprofit organization, teaching > Finacial Literacy on saturdays, or sundays. And he > gets a small compensation, would he need only the > acceptance of his employer for the compensation > arrangement? my intuition tells me that because he owes the same duties to all his employers, he would have to disclose everything both to his current employer and his new employer
getterdone Wrote: ------------------------------------------------------- > yes, but not necessary from the non-profit, any > additional compensation needs to be approved by > your current employer. > > KJH am I right or wrong in my asuumptions in > regards to your questions? Friggen ethics, sometimes its all parties involved, and sometimes its consent from employer, earlier today it was no consent to serve on a board (thunder posted, FI guy serving on a equity board). I need to revisit the SOPH handbook. Mickey Mouse Ethics!
Roger Bake, CFA is FI Portfolio manager for a medium sized firm and has been asked to serve on the board of directors for cold delight, inc, a national chain of ice cream shops. Baker personally owns stock in cold delight, but the firm has no debt securities outstanding. Baker’s former college roommate is the CEO of the company. As a member of the board of directors, baker would attend four meetings each year and receive $15000 a year in director’s fee, and he and his immediate family will also receive a 50% discount in all cold delight stores. According to standard IV(B) additional compensation arrangements, baker A Must provide written disclosure and obtain written permission from his employer before accepting the position and its benefits B Must provide written disclosure and receive permission from his employer, but it need not to be written C may accept position without perission but must disclose the duties of the position and compensation to his employer D does not need to disclose the offer or receive permission Answer is D. Seems like the answer is whatever the question feels like it should be.
who is Mickey Mouse and what boards is he on, and someone, check him up for approvals! Is that Minnie still a vixen?