Views on improving the integrity of global capital markets
24 October 2011

Fighting the Dark Angels

Jon StokesAt a recent compliance conference co-sponsored by CFA Institute, Board of Governors Vice Chair Alan Meder, CFA, CFP, challenged attendees to create a culture of integrity at their firms that goes beyond ticking the compliance box. Grounding his keynote address on the tenets espoused by historical figures through the ages,  Meder — senior vice president of Chicago-based Duff & Phelps Investment Management Co. — reminded listeners that the investment industry is “built on trust, as much it relies on expertise” and that “clients, co-workers, and the public expect integrity — always, not sometimes.”

In paraphrasing Abraham Lincoln’s Gettysburg address, Meder described how, during the most recent financial crisis, “the darker angels of our nature, such as greed and financial gluttony, came to overshadow sound business practice and rational asset valuations.” Yet the teachings of Socrates, Plato, and Aristotle lay the foundations of ethical leadership, according to Meder:  exhibiting courage to take ethical positions and stay true to your beliefs; engaging in just and virtuous deeds to build trust and relationships; and making decisions focused on good outcomes for others. “Integrity does not align well with a selfish view,” he noted.

Meder outlined a four-step process to make integrity a daily consideration:

  1. Setting high standards in writing that can set a bar to judge corporate culture and guide employees — a framework that will set expectations and promote an environment of honesty and fairness.
  2.  Ongoing training on ethical principles and the standards of the firm.
  3. Actively assessing the integrity of individuals and group situations, focusing on the greater good and long-term perspective while being alert for conflicts and selfish acts.
  4. Taking action when conduct is not in accord with ethical principles.

Meder’s speech corroborates much of the work CFA Institute does in promoting a culture of integrity for investment management firms.  The close to 600 firms that claim compliance with the Asset Manager Code of Professional Conduct recognize the value in establishing a solid ethical plan of action and setting a standard by which investors can actively assess their firms’ commitment to clients’ best interests. The CFA Institute case-based ethical decision-making training course available for investment management firms empowers employees with a framework for identifying appropriate conduct and gives them confidence to take action when integrity is threatened.  As noted by Meder in his speech, ethical crises resurface and find a way to haunt each generation. Only with courage, education, and commitment to integrity will investment professionals resist falling in with our “darker angels.”

About the Author(s)
Jon Stokes

Jon Stokes was the Director of Ethics and Standards Education at CFA Institute. His responsibilities included design and creation of on-line ethics education, development and maintenance of the CFA Institute Code of Ethics and Standards of Professional Conduct, and the design and management of the CFA Institute Ethical Decision-Making and Giving Voice to Values education programs. Stokes holds a JD degree.

1 thought on “Fighting the Dark Angels”

  1. Samuel B. Jones, Jr. CFA says:

    The following article from today’s WSJ makes a great postscript for Alan’s remarks:
    But let’s not forget that a healthy culture of ethics is a fundamental cornerstone for building and maintaining any lasting culture of trust.

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