Ethics & Professional Standards: Ethics & Trust in Investment Profession Flashcards
What is “Ethics”?
The study of moral principles or of making good choices. Ethics encompasses a set of moral principles and rules of conduct that provide guidance for our behavior.
What are “Moral Principles”?
Beliefs regarding what is good, acceptable, or obligatory behavior and what is bad, unacceptable, or forbidden behavior.
What is a “Code of Ethics”?
An established guide that communicates an organization’s values and overall expectations regarding member behavior. A code of ethics serves as a general guide for how community members should act.
What are “Standards of Conduct”?
Behaviors required by a group; established benchmarks that clarify or enhance a group’s code of ethics.
What is a “Profession”?
An occupational group that has specific education, expert knowledge, and a framework of practice and behavior that underpins community trust, respect, and recognition.
What are “Situational Influences”?
External factors, such as environmental or cultural elements, that shape our behavior.
Are legal actions always ethical?
No.
What is an example of something that is not ethical yet is legal?
Some countries, for example, do not have laws prohibiting trading while in possession of material nonpublic information, but many investment professionals and CFA Institute consider such trading unethical.
What is the “Framework for Ethical Decision Making”?
The framework consists of multiple steps designed to guide professionals through the ethical decision-making process. These steps include:
1.Identifying relevant facts, stakeholders, duties, ethical principles, and conflicts of interest.
2.Considering situational influences, seeking additional guidance, and evaluating alternative actions.
3.Deciding and acting on the ethical choice and reflecting on the outcomes to ensure they align with ethical expectations.
