Professional Ethics

Question 1

What are features of a profession?

Answer 1

• Specialism
• High levels of integrity
• Barriers to entry, e.g. exams
• Activities usually overssen by an institute/association
• Minimum expected standards of behaviour
• Disciplinary consequences
• Reputational consequences
• Ongoing Continuous professional development (CPD) requirements

Question 2

What approaches are there to a code of practice?

Answer 2

• Rules based approach: what members cna and can’t do
  
  • short time horizon
  • detailed rules
  • prescriptive behaviour
  • literal interpretation
  • standards imposed objectively
  • rules are mandatory
• Principles based approach: broad set of principles with which members should comply
  
  • enduring principles
  • long time horizon
  • driven by core principles
  • focuses on spirit of compliance
  • degree of subjectivity and discretion when applying code

Question 3

What are the benefits and limits of codes of ethics?

Answer 3

+ codes create greater awareness of professional standards

+ codes generate insight and debate into ethical behaviour

• codes cannot ensure financial workers behave
• only a small % of financial workers are members of professional bodies
• some firms don’t recognise their role in setting ethical standards

Question 4

What is the Chartered Banker: Professional Standards Board (CB: PSB) Code of Professional Conduct?

Answer 4

I will demonstrate my personal commitment to professionalism in banking by:

1. Treating all customers, colleagues and counterparties with respect and integrity
2. Considering the risks and implications of my actions and advice, and holding myself accountable for them and for the impact these may have on others
3. Complying with all current regulatory and legal requirements and following best industry practice
4. Treating info with appropriate confidentiality and sensitivity
5. Being alert to and managing potential conflicts of interest which may arise whilst performing my role
6. Developing and maintaining my pro knowledge and skills
7. Acting at all times in a fair, honest, trustworthy and diligent manner.

Question 5

What is a corporate code?

What are the issues with it?

Answer 5

Corporate codes are produced by individual/groups of organisations

However they’re often reactionary from bad publicity or scandal

Question 6

What does a corporate code typically contain?

Answer 6

• allusion to values such as honesty
• commitment to community and social responsibility
• commitment to the interests of stakeholders
• commitment to law
• expression of respect for environment