2009 World’s Most Ethical Companies - by Ethisphere

2009 World’s Most Ethical Companies by Ethisphere
website

99 companies made it into the "World's Most Ethical Companies" list (available in the website).

Some highlights of selected winners are available. It will be good if the questionaires used to evaluate the ethical quotient are available.

Its methodology:
Corporate citizenship and responsibility: 20%
Corporate governance: 10%
Innovation that contributes to public well being: 15%
Industry leadership: 5%
Executive leadership and tone from the top: 15%
Legal, regulatory and reputation track record: 20%
Internal systems and ethics/compliance program: 15%

Does it pay to be ethical ?
According to the graph (in the webstie) that compare "WME vs S&P" growth% over past 5 years, it is a strong YES.

There are other interesting lists and ratings in Ethisphere, for e.g:
100 Most Influential Peoples in Business Ethics;
50 Codes Rated;
Global Anti-corruption Quotient 2009.

I place its blog into my "Investment bloglist". This blog will help in showing fraud prevention insights and ethical practices that will help in preserving investment value.

Ethics on financial/investment field (2) - CFA Institute Standards of Professional Conduct

Both CFA Institute and CAIA are using CFA Institute Standards of Professional Conduct.

Let’s explore what is inside.

The portion more related to clients/customers are Professionalism; Duties to clients;
Investment analysis, recommendations and actions; Conflicts of interest.

For details, refer to the following files:
Code of Ethics and Standards of Professional Conduct

Standard of Practice Handbook
(we can find many Guidances, Recommended Procedures, Applications etc.)

CFA Institute Standards of Professional Conduct:
1. Professionalism
a. knowledge of the law
b. independence and objectivity
c. misrepresentation
d. misconduct

2. Integrity of capital markets
a. material nonpublic information
b. market manipulation

3. Duties to clients
a. loyalty, prudence and care
b. fair dealing
c. suitability
d. performance presentation
e. preservation of confidentiality

4. Duties to employers
a. loyalty
b. additional compensation arrangement
c. responsibilities of supervisors

5. Investment analysis, recommendations and actions
a. diligence and reasonable basis
b. communication with clients and prospecting clients
c. record retention

6. Conflicts of interest
a. disclosure of conflicts
b. priority of transactions
c. referral fees

7. Responsibilities as a CFA Institute member or CFA candidate
a. conduct as members and candidates in the CFA program
b. reference to CFA Institute, the CFA designation and the CFA program

Ethics on financial/investment field (1)

Ethics are very important in financial/investment professionals, especiallly to those that are advising customers/investors directly. Whenever there are financial scandals, questions related to ethics will be asked, especially by investors that are "victimised".

What are the ethics relevant to financial/investment professionals ?
Are ethics incorporated into curriculums ?
Are there laws/regulations governing ethics of financial/investment professionals ?
Can they be sued ? Can we recover the losses ?
… the list goes on…

Many of the questions are too big for me. Let’s explore..

Let’s take a look whether Ethics materials are included in curriculum of financial/investment professionals and what the aspects of Ethics are.

I look for the curriculum of financial/investment professionals from websites mentioned in my previous post.

CFP’s curriculum:
Code of Ethics and Professional Responsibility and Disciplinary Rules and Procedures,
Financial Planning Practice Standards,
Disciplinary Rules and Procedures.

CFA Institute’s curriculum:
Code of Ethics and Standards of Professional Conduct,
"Guidance" for Standards I-VII

CAIA’s curriculum:
CAIA is using CFA Institute Standards of Professional Conduct

FRM’s curriculum:
couldn’t find material on ethics from its website.
Maybe because risk management is more of technical work and involves less direct dealings with customers/investors.