Ethics Flashcards
What is the RICS’ motto?
“Est Modus in Rebus” – Latin for “There is measure in all things”
What is the RICS’ mission statement?
- To qualify and equip their members to offer the highest standards of professional service.
- To promote and enforce standards.
- To lead solutions to the major challenges facing the built environment through professional expertise.
When was the RICS founded?
1868.
Who is the President of RICS?
Tina Paillet (Pa-yey).
Who is the President Elect of RICS?
Justin Sullivan.
Who is the RICS CEO?
Justin Young.
How is the RICS structured?
- The RICS was founded in 1868 with the Royal Charter being granted by the Privy Council in1881.
- The RICS is self-regulated and internally monitored meaning that it is not regulated by the Government or external parties.
- The Bye-Laws determine how the RICS is regulated.
- The Governing council manage and agree the strategy for the RICS.
- The new governance structure is under review following the Bichard Review.
What is the structure of RICS as of October 2023?
Governing Council (GC)
- The governing body of RICS under the Royal Charter. The role of GC is to set the strategy and vision of RICS. Underneath GC are the RICS Board and the Standards & Regulation Board.
RICS Board
- Delivers the RICS business plan and oversees operations, excluding standards and regulation.
- The Board is supported by the Membership Services Committee, Knowledge & Practice Committee, Audit, Risk Assurance & Finance Committee and Nominations & Remuneration Committee.
- The Membership Services Committee sits over the World Regional Boards (WRBs). These are responsible for the strategy and business plan for the five world regions: Americas, Middle East & Africa, Asia Pacific, Europe and UK & Ireland.
The Standards & Regulation Board
- Exercises the regulatory function of RICS, including strategy, governance, structure, policy and operational oversight in the public interest. It is accountable to GC, but not specifically directed by them.
- The Board also oversees RICS professional standards, entry and admission to the profession, education and qualification standards, regulatory operations, regulatory schemes (such as the Firm Registration, Valuer Registration, Designated Professional Body Scheme and Client Money Protection Schemes), dispute resolution services and Regulatory Tribunal (plus their associated rules). It is independently led and comprises both non-members and Members of RICS.
What is the Royal Charter and what is its purpose?
- A document granted by the Monarchy and advised by the Privy Council, which defines an organisation’s objective, constitution and grants it power to govern its own affairs.
- The Royal Charter requires the RICS to promote the usefulness of the profession for the public advantage in the UK and in other parts of the world.
What are bye-laws?
- Set out in the Royal Charter and determine how the RICS is regulated.
- 10 Bye-Laws in total.
- The Bye-Laws include disciplinary information.
What are the RICS’ 5 principles of better regulation?
PACTT
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency
What is the difference between RICS ethics and rules?
- Ethics are a set of moral values.
- Rules of Conduct are a framework that we work to.
When and why did the Rules of Conduct change?
- Effective from 2nd February 2022.
- Previous RoC had been in place since 2007.
- After consultation with members, firms and the public, it was voted that the rules would be updated and merged into one new document.
- Intention to provide a greater clarity through one document, encompassing RoC for firms, RoC for members, example behaviours.
What are the changes to the new Rules of Conduct?
- They replace the previous RoC for members, RoC for firms and the Global Professional and Ethical Standards.
- Appendix A contains professional obligations for firms (7) and members (3).
- Example behaviours are provided.
- More focus on evolving technologies, global challenges and diversity and inclusion.
What are the new Rules of Conduct?
- Rule 1 - Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
- Rule 2 - Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
- Rule 3 - Members and firms must provide good-quality and diligent service.
- Rule 4 - Members and firms must treat others with respect and encourage diversity and inclusion.
- Rule 5 - Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
Explain your understanding of Rule 1?
- RICS Members and firms should not allow themselves to be influenced improperly through the acceptance of work referrals, gifts or hospitality.
- Members and Firms must also be sure to identify conflicts of interest and not provide services or advice where these conflicts of interest occur.
- This could be a scenario where you have reduced impartiality due to an existing relationship, for example being friends with a Main Contractor who has subsequently been selected to submit a tender would form a conflict of interest.
Explain your understanding of Rule 2?
- To ensure compliance with Rule 2, Members and firms must only act for clients where they have the necessary knowledge, skills and resources to carry out the work competently.
- Firms must supervise any employees or subcontractors undertaking work on their behalf, for example requesting that a Junior Surveyor undertakes a complex valuation due to resourcing issues would create problems in achieving compliance with this Rule. Instead, an experienced and suitably qualified surveyor should be asked to undertake the valuation.
Explain your understanding of Rule 3?
As an RICS member or regulated Firm we must also be sure to understand a clients’ project specific requirements before acting on their behalf. The clients’ scope of services should be agreed along with any exclusions and timescales for achieving each of the deliverables before signing up to formal terms of engagement.
Explain your understanding of Rule 4?
- The RICS also expects its members to respect the rights of others and treat others with courtesy.
- We need to ensure that everyone is treated fairly and look to eliminate any instances of discrimination on the basis of age, disability, gender, pregnancy, race, religion or sexual orientation.
- RICS members and firms also need to adopt a no tolerance policy of bullying or harassment.
Explain your understanding of Rule 5?
- Members and firms are required to question practices and decisions that they suspect are not right and raise concerns with colleagues, senior management, clients or the RICS.
- When making public statements we need to ensure these do not undermine public confidence in the profession.
- When receiving and processing complaints, we need to ensure these are dealt with promptly, openly and professionally.
- In complying with Rule 5, a useful sense check to ensure compliance is to ask ourselves if we would be comfortable in standing behind our actions if these were brought into the media or a public forum.
What are the professional obligations of members?
- 1 - Members must comply with the CPD requirements set by the RICS which requires 20 hours of CPD for each calendar year, 10 hours of which must be formal CPD.
- 2 - Members must cooperate with RICS.
- 3 - Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
What are the professional obligations of firms?
- 1 - Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
- 2 - Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS.
- 3 - Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from or inability to work.
- 4 - Firms must cooperate with RICS.
- 5 - Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
- 6 - Firms must display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS.
- 7 - Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
Why do the RICS have Rules of Conduct?
- To provide a framework that we can all work to and so the client knows they are getting a set level of service.
- As well as being an important tool for the Institution, the Rules of Conduct are also a useful professional guide for individual institution members.
Can you provide an example of when you have complied with Rule 1 of the RoC?
When receiving an enquiry for a terminal schedule of dilapidations, I identified a conflict of interest (party conflict) due to the fact that we had previously acted on behalf of the tenant. The prospective client was the landlord of the property, who was informed of the conflict and decided against using our services.
If the prospective client did want to instruct yourselves to undertake the terminal schedule of dilapidations, despite the conflict of interest, how might you go about managing this?
- Obtain prior written informed consent from both the landlord and tenant, ensuring that all parties are fully aware of the implications of the conflict are consenting willingly.
- Maintain records of steps taken regarding managing the conflict.
- Set up information barriers (have a surveyor from another office carry out the instruction).
- If it were not possible to set up an effective information barrier it may be more ethical to decline the instruction.
Can you provide an example of when you have complied with Rule 2 of the RoC?
- I ensure that I do not undertake any work in which I am not competent to do.
- I carry out regular CPD in line with the RICS CPD policy.
Can you provide an example of when you have complied with Rule 3 of the RoC?
- I ensure that any work I undertake is done so to a high standard, following relevant guidance set out by RICS.
- A clear client brief is established and terms of service are set out within fee proposals, including the services to be provided, fees, timescales and any exclusions and assumptions.
Can you provide an example of when you have complied with Rule 4 of the RoC?
- I always treat others with courtesy and respect no matter who I am dealing with.
- I am encouraging of diversity within the workplace and always work collaboratively with colleagues regardless of their age, sex, ethnicity, religious beliefs etc.
Can you provide an example of when you have complied with Rule 5 of the RoC?
When using social media I ensure that I use it responsibly and do not make any statements that may undermine the reputation of the profession or RICS.
What are the RICS’ CPD requirements?
- All RICS members (AssocRICS, MRICS and FRICS) must undertake at least 20 hours of CPD each year. This must be completed by 31st December and recorded online (or using the RICS mobile app) by 31st January. At least ten hours must be formal (structured) CPD
- Every three years, CPD relating to ethics must be undertaken.
Can you please explain the RICS Ethics Decision Tree?
Provided step by step guidance and considerations on how to deal with ethical decisions.
Steps:
- Do you have sufficient facts on the issue?
- Is it legal?
- Is it in line with RICS Rules of Conduct?
- Have you consulted with appropriate people to make an informed decision?
- Do you have clear reasoning in reaching your decision?
What information do regulated firms need to provide to RICS annually?
- It is called annual return and carried out on-line.
- Failure to do so leads to a fixed penalty.
- It includes:-
o Type of business and staffing.
o Nature of clients.
o Training provision.
o Complaints handling procedures details and records.
o PI insurance details.
o Whether the firm holds clients’ money
What is a bribe?
An exchange of something of value in return to the person receiving it promising to do something improper in their line of business.
Is there any RICS guidance you are aware of surrounding bribery?
Countering bribery, corruption, money laundering and terrorist financing, 1st edition, February 2019 – Professional Standard
What is the primary UK legislation surrounding bribery?
The Bribery Act 2010.
What are the offences under the Bribery Act 2010?
- To offer, promise or give a bribe (Section 1)
- To ask for, agree to or receive a bribe (Section 2)
- To bribe a foreign public official – including facilitation payments (Section 6)
- Failure of a corporate organisation to prevent a bribe on its behalf (Section 7)
Under what circumstances are facilitation payments ok?
- When under duress, for example when there is a risk of life, limb or liberty.
- You should put safety first, make the payment and report the matter immediately or as soon as is practicable to your manager or your ethics compliance contact.
What are the 6 principles of prevention under the Bribery Act 2010?
- Proportionate procedures
- Top-level commitment
- Risk Assessment
- Due diligence
- Communication (including training)
- Monitoring and review
What are the penalties under the Bribery Act 2010?
Up to 10 years’ imprisonment and/or an unlimited fine.
Under what circumstances would you be comfortable accepting an offer of a gift or hospitality from a client or contractor?
- If it is genuinely and proportionately for business purposes.
- If it would be rude to decline for cultural reasons and the value was reasonable.
What might you consider before accepting a gift or hospitality?
- Is the value of the offer proportionate to the work undertaken?
- Who is the intended recipient; is it an individual or a range of people, such as a project team?
- Is the offer reasonable and proportionate?
- Is the offer for genuine business purposes?
- When was the offer made? Was it near a critical business decision or contract award, or at a regular business marketing event?
- How easy is it to politely decline the offer?
- What are my company policies on gifts and hospitality?
What would you do after accepting an offer of a gift or hospitality?
- Inform my manager or senior management of receiving a gift / hospitality.
- Include details of the gift on the gifts and hospitality register.
- Follow the company’s procedures / policy.
Please tell me what you understand about conflicts of interest?
- A conflict of interest is where someone in a position of trust has competing personal or professional interests making it difficult for them to fulfil their duties impartially.
- An existing relationship will result in reduced impartiality and Chartered Surveyors have an obligation to make clients aware of this and if necessary, decline work opportunities where a conflict of interest occurs.
Are you aware of any RICS guidance around conflicts of interest?
RICS Professional Standard - Conflicts of Interest, 1st edition, March 2017.
What are the different types of conflict of interest?
- Party Conflict – where the duty to act in the interest of a client or other party in a professional assignment conflict with a duty owed to another client or party in relation to the same or related professional assignment.
- Own Interest Conflict – Where the duty to act in the interest of a client in a professional assignment conflict with the interests of the member or firm.
- Confidential Information Conflict – Where the duty to provide material information to one client conflicts with the duty owed to another client to keep that same information confidential.
What would you need to have in place before proceeding with an instruction where there is a conflict of interest?
Prior written informed consent.
When may obtaining informed consent not be enough?
- If the instruction is illegal.
- If the instruction is contentious.
- If two instructions conflict with each other.
- If the firm / member are unable to act impartially.
- Dual agency (acting for a buyer and seller – to never be done).
What are the disciplinary processes adopted by the RICS?
- Fixed Penalty Notices.
- Regulatory Compliance Orders (as of 1st October 2019)
- Consent Orders (before 1st October 2019)
- Regulatory Tribunal
What is a Fixed Penalty Notice?
An administrative fine and/or caution when RICS members breach the Rules:
- Rule 2 of Rules of Conduct in regards to Continuing Professional Development (CPD).
- Professional Obligations under Rules of Conduct in regards to providing information to RICS.
- Rules 13 of the Rules for the Registration of Firms in regards to payment of Fees.
- First breach will attract a caution. Second breach within 10 years of a caution will result in a caution and a fine.
What is a Regulatory Compliance Order?
A Regulatory Compliance Order is an agreement between RICS and a Regulated Member (either an RICS professional or a RICS-regulated firm) that they are liable for disciplinary action. In agreement the regulated member:
- accepts that they have fallen short of the standards expected; and
- accepts the proposed sanction; and, in some cases,
- accepts to take steps to meet the standards expected and/or to prevent it happening again.
What is a Consent Order?
RICS may only enter into a Consent Order in relation to any concerns or information received prior to 1 October 2019, when the Regulatory Compliance Order were introduced.
A Regulated Member agrees to accept a Consent Order with the Head of Regulation which can contains the following terms:
- To take a certain action within a specified period of time
- To desist from taking a certain action within a specified period of time
- Pay a fine (up to £2,000 per breach or equivalent currency value)
- Pay RICS’ costs
What is the Bichard Review?
- The Birchard Review was an independent review commissioned by the RICS Governing Board in December 2021 into the purpose, governance and strategy of the RICS.
- This was commissioned following the Levitt Review and aimed to create a new sense of purpose and direction of the RICS.
The review advised on 36 recommendations that are currently being implemented which include:
- Commercial Activity will now be separated from other activities within the RICS and led by a suitable qualified executive with strong commercial experience who reports to the Commercial Committee.
- RICS Matrics should give younger members a stronger voice through an improved governance structure with an appropriately selected representative from the community of younger members to sit on the Governing Council.
- A Diversity and Inclusion Panel will be setup to provide advice to the RICS Board and Standards and Regulation Board.
- Improvement of Technology within the RICS.
- A Public Interest Panel will be setup to advise the Governing Council.
The Governance Structure will be updated to include a Public Interest Panel, Sustainability Panel, Commercial Committee and Audit, Risk, Finance & Assurance Committee.