Ethics, Rules of Conduct and professionalism (L1-3) Flashcards
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
- Chartered Surveyors have an obligation to make clients aware and if necessary, decline work where a conflict occurs
What types of conflicts of interest do the RICS define?
- Party Conflict
- Own Interest Conflict
- Confidential Information Conflict
What is a Party Conflict?
This occurs when there is conflicting obligations to act in the best of interests of different clients or parties involved in the same or related professional assignments.
What is a Own Interest Conflict?
This occurs when the obligation to act in the clients best interests conflicts with the members or firms own interest.
What is a Confidential Information Conflict?
This occurs when a members or firms obligation to provide information to one client conflicts with their obligation to keep that same information confidential for another client.
How could the conflict of interest be managed internally if two separate departments were working for the same client?
- Put procedures in place to ensure exclusivity of staff to avoid any cross over of information between departments
- Ensure there are separate communication lines into the client
- Provide secure office and data storage
- Set up NDA agreements with staff
- Monitor the potential conflict
If the client was insistent that you worked for them despite an existing conflict of interest, how would you proceed?
- Check their understanding of reduced impartiality
- Agree working procedures to manage the conflict
- Seek a letter of instruction to continue
- Keep them updated of any risks
What are the main principles of the Bribery Act (2010)?
The offences are:
- Making a bribe
- Receiving a bribe
- Bribery of a foreign public official
- Failure of a corporate entity to prevent bribery on its behalf
What are the six principles of prevention companies should put in place under the Bribery Act (2010)?
- Proportionate Procedures
- Top level commitment
- Risk assessments
- Due diligence
- Communication
- Monitoring & review
Under the Bribery Act (2010), under what circumstances is a facilitation payment permitted?
- The only circumstance in which it is ok to make a facilitation payment is when your are under duress
- For example, if there is real and present risk or danger to life, limb or liberty.
What are the ethical principles that the RICS Rules of Conduct are based on?
- Honesty
- Integrity
- Competence
- Service
- Respect
- Responsibility
What is the difference between RICS ethics and rules?
- Ethics are a set of moral values
- Rules of conduct is framework that we work to
When did the Rules of Conduct change?
2nd February 2022
Why did the previous Rules of Conduct change?
- Previous rules has been in place since 2007
- Majority vote to bring them into one clear framework providing a
- Simpler structure
- with Clear examples
- Focusing on respect , diversity and inclusion
- Evolving technology and
- Tackling global challenges
What are the RICS Rules of Conduct?
Member and firms must:
- Rule 1 : Be honest, act with integrity and comply with their professional obligations
- Rule 2: Maintain professional competence and ensure that services are provided by competent individuals with the necessary expertise
- Rule 3: Provide good-quality and diligent services
- Rule 4: Treat others with respect and encourage diversity and inclusion
- Rule 5: Act in the public interest, take responsibility for their actions, act to prevent harm and maintain public confidence in the profession
What is ethical procurement?
- Ethical procurement refers to the practice of acquiring goods, services, and works in a manner that is fair, transparent, and responsible.
- It involves considering not only the cost but also ethical implications of the procurement and its outcomes.
When was the RICS fouded?
1868
What are the professional obligations of the members?
Members must:
- Comply with CPD requirements (20 hours each calendar year, 10 of which must be formal)
- Cooperate with RICS
-Promptly provide all information reasonably requested by the Standards and Regulation Board
What is the distinction between formal and non-formal CPD?
- All CPD must be relevant to your role or wider profession
- Formal CPD will have externally set learning outcomes and involve an assessment of learning or interaction such as formal webinars
- Non-formal CPD won’t have this such as private reading
- The CPD decision tree can help in this regard
What procedures must you follow if you are starting up a new practice?
- Contact RICS for company start up pack
- Register for Regulation
- Appoint contact officer for RICS communications
- Prepare complaints handling procedure
- Abide by Rules of Conduct
- Use designation ‘Regulated by RICS’ on all practice material
What insurances would you need if you were setting up your own firm?
- Professional Indemnity Insurance
- Employer’s Liability Insurance
- Public Liability Insurance
- Building Insurance for office
What is the purpose of Professional Indemnity Insurance?
To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty e.g. neglect, errors or omissions.
What are the RICS minimum levels of indemnity?
- Turnover up to £100k it is £250k
- Over £100k up to 200k it is £500k
- Over £200k and above it is £1m
What does the Royal Charter mean to you?
- It is the mechanism in which how the RICS was formed as an organisation i.e. incorporated by Royal Charter
- The Royal Charter is controlled by governing council, and it is approved by the monarch under the guidance of privy council
- Sets out the objectives of the institution – to secure advancement and acquisition of knowledge
What are the 5 Rules of Conduct?
- Rule 1 – Be honest, act with integrity and comply with professional obligations including obligations to the RICS
- Rule 2 – Maintain professional competence and ensuring that services are provided by competent individuals with the necessary expertise
- Rule 3 – Provide good quality and diligent services
- Rule 4 – Treat other with respect and encourage diversity and inclusion
- Rule 5 – Act in the public interest, take responsibility for their actions, act to prevent harm and maintain public confidence in the profession
What are the ethical principles upon which these rules are based?
- Honesty
- Integrity
- Competence
- Service
- Respect
- Responsibility
What are the mandatory professional obligations for Members?
- Comply with CPD requirements (20 hours annually, 10 of which must be formal)
- Co-operate with RICS
- Promptly provide all information reasonably requested by the standards and regulations board
Tell me about some of the Mandatory obligations for RICS Regulated Firms?
- Publish complaints-handling procedure (which includes ADR provider approved by RICS) and maintain complaints log
- Ensure adequate PI insurance that meets the standards approved by RICS
- Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event they are unable to work
- Co-operate with RICS
- Promptly provide all information reasonably requested by the standards and regulations board
- Use designation, regulated by RICS on all practice material
- Report to RICS any matter that they are required to report under the Rules for the Registration of Firms
What are the principles of the Anti-Bribery Laws? How does this affect your day-to-day activities?
- The offences are:
o Making a bribe
o Receiving a bribe
o Bribery of a foreign public official and
o Failure of a corporate entity to prevent bribery on its behalf - As a QS, the Bribery Act 2010 requires a high level of ethical awareness and compliance in my day-to-day activities, particularly around
o Procurement
o Contractual negotiations and
o Financial transactions
I need to ensure I am
o Vigilant in identifying and preventing bribery activities,
o Ensure my actions are transparent and in line with the law which may involve rejecting gifts and hospitality and that suppliers are not involved in unethical behaviour
Once qualified, and if you were to set up your own firm regulated by the RICS, what are your obligations to achieve this?
o Contact RICS for company start-up pack
o Register for Regulation
o Appoint a contact officer for RICS communications
o Prepare a complaints handling procedure
o Abide by Rules of Conduct
o Use designation, Regulated by RICS on all practiced material
- Arrange PII cover to apporved RICS standards
Who does professional indemnity insurance protect?
o The consultant or firm – it provides financial cover in the event a client suffers financial loss as a result of a breach of professional duty e.g. neglect, errors or omissions
How do you ascertain the level of PI for your new firm?
o Using the RICS Professional Indemnity Insurance Requirements standard
o This sets out the standards of cover approved by the RICS
o The level of PI is based on annual turnover (or estimated for a new firm), these are:
o Turnover up to £100k it is £250k
o Turnover between £100k - £200k it is £500k
o Turnover over £200k it is £1m
What happens to PI once you stop trading?
o Usually, the PI policy will act as run-off insurance for the reminder of the policy period (this may need to be extended in line with limitation periods)
If you are a sole trader, what do you need to have in place should you be unable to perform your duties, say due to ill health, death or some other way you are incapacitated?
o As per firms’ obligations they should have
o Appropriate arrangements for their professional work to continue such as Run-off cover
Provide an example on one of your projects where you have acted with integrity?
o On the Williamsgate project
o Received a contractor’s quotation for a CE which did not include the direct fee percentage
o Even though highlighting this would increase the contractors quotation and therefore the cost
o My duty to act honestly and with integrity prevailed and
o I advised that a revised quotation should be instructed such that the contractor could correctly apply the direct fee percentage
You mention conflict of interests; what guidance does the RICS give in relation to the process of dealing with this?
o The Conflicts of interest professional standard provides clear rules for RICS members and regulated firms to identify and manage actual and potential conflicts of interest
o This includes:
o Not advising or representing a client were doing so would involve a CoI or a potential risk of a CoI
o Obtaining informed consent
If it is the correct thing to do and all client’s interests will be served and
o Keeping records
Of decisions made IRT accepting or proceeding with work
The obtaining of Informed Consent and
Any measures taken to avoid CoIs arising
Provide an example of a time when you have carried out a task that promotes trust in the profession?
o On the Williamsgate project
o Received a contractor’s quotation for a CE which did not include the direct fee percentage
o Even though highlighting this would increase the contractors quotation and therefore the cost
o My duty to act honestly and with integrity prevailed and
o I advised that a revised quotation should be instructed such that the contractor could correctly apply the direct fee percentage
o Doing so promotes trust in the profession that services are provided honestly and with integrity
Talk me through the steps you would take when identifying a conflict of interest in the workplace
o This will be based on the size, complexity and number of practice areas in the firm
o Identification maybe achieved through:
o Database checks
o Advisory emails to staff to enquire about any individual involvement
o Existing record searches
o Requesting staff to declare personal interests
What is your company’s policy on gifts and hospitality
o My employers internal control manual contains a hospitality policy which includes the giving or receiving of gifts. The policy sets out
o That gifts and hospitality are recorded on each applicable occasion whether accepted or not
o Giving or receiving of gifts of less than £10 or basic refreshments with a value of £50 pp need not be included in record
o Hospitality that is excessive or perceived as influencing decisions should not be accepted
o Regardless of foreign culture, hospitality or gifts must not be offered or accepted when dealing with Foreign Public Officials
What does the RICS policy state about gifts and hospitality?
o RICS members should follow these rules:
o Only offer or accept gifts and hospitality that are customary, proportionate and reasonable in terms of value and frequency
o Never offer or accept any gift or hospitality if it may improperly influence your decisions/judgement or give the appearance of doing so (e.g. consider the timing of the gift)
o Only offer or accept gifts and hospitality that you would be happy for others to know about
o Follow the policies and procedures of your employer in relation to gifts, hospitality - e.g. record in company’s gifts and hospitality register
o Report any concerns about bribery to your employer or to RICS Regulation
What are the rules around bribery and how is this adopted in your workplace?
o The offences are:
o Making a bribe
o Receiving a bribe
o Bribery of a foreign public official and
o Failure of a corporate entity to prevent bribery on its behalf
o My employer has procedures and policies in place such as a hospitality policy including gifts which permits only proportionate and reasonable hospitality for legitimate business purposes which applies when conducting business overseas.
o In addition, we have a United Supply Chain approach setting out standards that we expect from organisations we deal with and makes clear that we do not tolerate corruption or bribery.
Provide an example of how you have provided credible advice to a client in relation to the ethical principles in your day to day practices.
o On the Williamsgate project
o Received a contractor’s quotation for a CE which did not include the direct fee percentage
o Even though highlighting this would increase the contractors quotation and therefore the cost
o My duty and morals ]/ ethics to act honestly and with integrity prevailed and
o I advised that a revised quotation should be instructed such that the contractor could correctly apply the direct fee percentage
How does your example exclusion of fee percentage on the Williamsgate project relate to RICS Rules of Conduct?
o Members and firms have an obligation to act honestly, with integrity and comply with their professional obligations
o Highlighting the contractor had not included his fee demonstrates my ability to operate honestly and with integrity and comply with my professional obligations which under the contract require me to act as stated in the contract and more widely discharge my duties impartially
o Such behaviour also promotes trust and confidence in the profession
Who is the RICS CEO?
Justin Young
Who is the president of the RICS?
Tina Paillet
Who is the president elect of the RICS?
Justin Sullivan
Who is the senior vice president?
Nicholas Maclean
