Global Ethics — the Road Ahead
I recently completed a very educational and encouraging round of meetings in the various markets in which CFA Institute has local membership groups, or “societies.” What I’ve heard and experienced over the two-month-long process is remarkable in terms of its implications for the financial services industry. In an environment of great financial and political unrest around the world, I witnessed both unity and diversity along the way. It presents an important challenge for CFA Institute and others concerned with ethics. Allow me to explain.
I was struck mainly by the continuing impact of the global financial crisis. It remains a consistent theme in nearly every region and financial market that we visited. The crisis’ lingering impact was particularly profound during a stop in Madrid for the Europe, Middle East and Africa regional meeting, where over 20 percent unemployment and serious breaches of financial market confidence and trust only served to reinforce this common global theme.
Each market in our membership represents a diverse economic reality. Economies, markets, and regulatory structures are as varied as the people and cultures they represent. As a result, how we might have an impact on improving ethics and integrity in each situation will be a challenge, to be sure. Yet, as difficult as the global financial unrest is, it presents a unique opportunity for our organization to rally around our global ethics resources, which offer a consistent message across diverse markets.
It goes without saying that the CFA charter is a first line of response, offering a clear ethics message and vision for the global investment profession. Simply put, it is the battleship of our fleet. The promotion of our CFA program and the ongoing demand for the credential ensure that this will continue to be our ethics hallmark.
However, there is a range of other ethics activities and opportunities which I promote and discuss in our outreach efforts. Certainly, the Global Investment Performance Standards (GIPS®) come to mind, with their focus on honest and consistent reporting of investment performance by asset managers. In addition, we have begun more active global promotion of the Asset Manager Code of Professional Conduct, and have recently completed our annual, global survey (PDF) of market ethics to help inform discussions with regulators and the media.
These are a few of the many CFA Institute codes, standards, and research projects focused on ethical practice. They are available to CFA members and nonmembers alike, and I invite you to review these offerings and contact our CFA Institute staff for further information. They are not a cure-all for the current financial crisis, but they are an important antidote to future global meltdowns. Help us spread the word.