Hey everyone, I’m having trouble coming up with a common framework for approaching these ethics problems so I was hoping people could help those in trouble (like myself) clarifying these 1) Go to a company site where there isn’t accessible lodging and aircraft, so the company books and pays both for you. My take: You DO have to obtain approval in WRITING to your boss, but you can accept it 2) Same as 1) but there is accessible lodging and transportation My take: You CAN accept with approval in writing from boss, but it is RECOMMENDED that you pay it yourself 3) If you get a gift based on past performance My take: Required: can accept with writing from boss , recommended: don’t know? 4) If you’re promised a gift based on future performance My take: Can take with WRITTEN approval from boss disclosing gift and dollar amount 5) If get sent to conference by a firm you do business with My take: CANNOT accept, as may interfere with independence and judgment Misc. Is there any case where oral approval is sufficient? Is there ever a case where its mandatory you must pay? When do you have to disclose dollar sums? Is that only if a client promises a bonus on future performance and you get written approval? Is there an instance where you need written approval from the gift giver/company organizing the trip? More to come! Please feel free to add any as well!
Each case is different…there will always be a gray area…but these are some of my takeaways 1. Not accessible lodging and aircraft…It’s recommended to offer payment of expenses but not a violation to accept the offer. 2. Accesible Lodging and Aircraft…Don’t accept, pay your expense 3. Gift based on past perf…disclose to all parties 4. Promised gift based on future perf…Big NO, this will jeopardize your independence 5. Business conference at client site…Offer to pay 5. Business conf at company HQ…your company pays 6. Oral approval has no value…oral disclosure has
AB I disagree on number 4 This is from the SOPH; Standard IV(B) requires members and candidates to obtain permission from their employer before accepting compensation or other benefits from third parties for the services rendered to the employer or for any services that might create a conflict of interest with their employer’s interest. Compensation and benefits include direct compensation by the client and any indirect compensation or other benefits received from third parties. “Written Consent” includes any form of communication that can be documented (for example, communication via computer e-mail that can be retrieved and documented). Members and candidates must obtain permission for additional compensation/ benefits because such arrangements may affect loyalties and objectivity and create potential conflicts of interest. Disclosure allows an employer to consider the outside arrangements when evaluating the actions and motivations of members and candidates. Moreover, the employer is entitled to have full knowledge of compensation/benefit arrangements to assess the true cost of the services members or candidates are providing. The example they give is a bonus offered if a portfolio gets to a certain level of performance. So I agree with Muffin…you can accept a gift for future performance(bonus), but you MUST disclose all the terms linked to it
Can you guys go into detail about the looser/stricter laws and their relation to the Standards? I seem to get confused for that a lot, esp. ones like you live in stricter law A, you’re in B to do business, when do you follow what rule
SJZ Wrote: ------------------------------------------------------- > Can you guys go into detail about the > looser/stricter laws and their relation to the > Standards? I seem to get confused for that a lot, > esp. ones like you live in stricter law A, you’re > in B to do business, when do you follow what rule Always follow the strictest rule 
Lets try to keep this on standards concerning gifts, referral fees and client site trips Another question would be where do you disclose gifts to more than current or prospective clients/your employer, are there any? And is it ever required that you pay your own way?
devildog Wrote: ------------------------------------------------------- > AB > I disagree on number 4 > This is from the SOPH; > Standard IV(B) requires members and candidates to > obtain permission from their > employer before accepting compensation or other > benefits from third parties for > the services rendered to the employer or for any > services that might create a > conflict of interest with their employer’s > interest. Compensation and benefits > include direct compensation by the client and any > indirect compensation or other > benefits received from third parties. “Written > Consent” includes any form of > communication that can be documented (for example, > communication via > computer e-mail that can be retrieved and > documented). > Members and candidates must obtain permission for > additional compensation/ > benefits because such arrangements may affect > loyalties and objectivity and > create potential conflicts of interest. Disclosure > allows an employer to consider > the outside arrangements when evaluating the > actions and motivations of members > and candidates. Moreover, the employer is entitled > to have full knowledge > of compensation/benefit arrangements to assess the > true cost of the services > members or candidates are providing. > > > The example they give is a bonus offered if a > portfolio gets to a certain level of performance. > So I agree with Muffin…you can accept a gift for > future performance(bonus), but you MUST disclose > all the terms linked to it Devildog, I agree with the SOPH statement but while solving problems, if there were performance related offers then most of the time the answer was " that CFA member or candidate should accept only a flat fee becaue a bonus will impair his/her independence" I think my takeaway will be that accepting bonus with a written permission is not a violation (as SOPH says) but inclination should be towards denial of offer. Comments?
I agree that it could lead to partiality toward someone’s account. Check out the SOPH here; http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2005.n3.4000 Page 91 In the example they give they discuss a performance bonus in the form of a trip which was not disclosed. The violation of the standard is in not notifying the employer One of the reasons disclosure is required is so your employer can determine if it is going to cause a conflict. My opinion is that we should not confuse multiple standards. The question is CAN you accept additional comp not SHOULD you accept it. You can accept it with full disclosure to your employer. It doesn’t say specifically in the standards that you must refuse additional comp based on performance. You need to evaluate each case individually, but is it by no means a definite no.
Anyone well versed with Ethics able to help us out here?