Introduction:
For every company’s success stands on the ethical behavior of the company towards their customers. Harry Markham a pension investment advisor. Once in early 2012, he was in a dilemma about the state of pension fund while he was involved into preparation for the meeting along the board of trustees. Harry Markham completed his master of finance in the year 2004 from the B- school of USA, and he was found to be working for investment consulting associates (ICA) which had been involved into giving advice for funds related to pension. Markham could closely remain connected with the way the liabilities of pension funds were valued since Markham’s joining in the company. If Markham follows the principles which are guided in the MOF and CFA programmer, he got those numeric which were twice increased value compared to those reported for the funds. But he was not given permission to make any adjustment to the official numbers, inspire of the client members and the firm itself being least bothered in questioning them to make the board of trustees, the firm was unable to make any objection for the board who did not want the complain that the liabilities of the funds were much greater than number considered as per the government accounting standard rules (GASR) rules. Markham’s concern was with the loyalties with the firm, with the board of trustee, investors, investment expertise etc. Markham was in a dilemma whether or not to raise the issue of liability in the conference room to the board of the state pension fund. He knew that there was risk in the either side. But as he was bound with the ethical code of conduct, he was finding it difficult to hide the whole thing (Swanson & Frederick, 2016).
Discussion:
Harry Markham often said that ‘My role isn’t for deciding the liability value. As an investment advisor his role is to offer different ethical views. He was challenged both by ethically and practically. The central problem is an ethical issue for Harry Markham’s, CFA. His loyalty related to his firm, the board of trustees as well as the pension holders is at odds with his personal and professional standards.
As an investment advisor Markham need to identify the circumstances of the investors, like their background, their ability to take risk, the annual income, the budget for investment etc. to make the best investment advice. The CFA professionals said that one should not give advice without identifying the client’s circumstances. And the next is they got those funds which are grossly being shortage of money, but the accounting could not consider them to be as shortage of money. Before giving advice Markham let the firms know where they are starting. Therefore, the client will be knowing that got to start from a multi- billion dollar. On the other hand Markham was concerned about not getting what he could believe were in accurate figures, he also know that his clients are afraid of getting bad news. He was bothered about the fact that if he was to reflect issue related to liability then surely he and his business company would be fired.
Investment committees and staffs believe that their main motto is to earn, at least at the discounted rate given by the government. A sponsor told Markham that it could not be as per planning members’ interest to decrease the rate of discount as the liability increase would bring about shock to the taxpayers as well as to the state legislature that it would determine the support related to political for the plan’. The sponsors of the plan are least interested to know that they were low funded compared to the numbers those are showing and the messengers are blamed. On the other hand if it was officially elected they don’t desire a crisis as per their knowledge (Swanson & Frederick, 2016).
An advisor for investment is responsible to make good investment decisions, and have a knowledge in client’s financial condition to make sound investment decision. This sometimes involve those information which the clients are afraid of.
Generally, as a Chartered Financial Analyst, Markham need to attest the compliance with respect to the ethical code of conduct. He need to air those information which is ethical to do and are relevant to the firm and the client too. As an employee of the company, Markham need to be loyal, need to know all the code of conducts, need to be ethical.
Ethics mostly concern on that is right as well as that is wrong in behavior related to business judged as per the basis of the future standard of practice as per approval of the society. Business ethics is a code of conduct consisting of regulation of the business activities towards society as well as other business units. As well as business ethics defines the social, legal, cultural and economic limits within which business organization are expected to plan their activities. According to Markham’s dilemma relating to conflicting loyalties of a firm explained as the loyalty of boards of trustees including such peoples engaged in making investments decisions relating to public pension. Such person are hired by the firm as an investment expertise the code of ethics needs to maintain by such individual persons to conduct their performances effectively. The board of trustees will remain unaware for its dangers and will be happy related to the pension plan of state and will still have its own support with respect to political. His self as well as professional views related to ethics are violated. Moreover, the liabilities will deal as per the plan and the employees will not get benefits or taxpayers will require to pay more (Swanson & Frederick, 2016).
Conclusion:
It can be concluded from the above discussion that the ethical issue arises from Harry Markham is related to loyalty of firm, board of trustees as well as pensioners with personal standards. It can also be concluded that funds are shortage of money but accounting does fail to show them shortage of money. Further discussion reveals about responsibility of investment advisor to take good investment decisions. It can also be concluded that business ethics is a social, legal as well as cultural limits for which organization plan their activities accordingly. Hence, it can be concluded that as per Markham people engaged in making investments should be hired by firm as investment expertise being code of performance efficiently.
References:
Swanson, D. L., & Frederick, W. C. (2016). Denial and leadership in business ethics education. Business ethics: New challenges for business schools and corporate leaders, 222-240.
