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Ethics and Corporate Governance

Module description

This module aims to introduce ideas and concepts that will help you understand the importance of ethical behaviour in the investment industry as well as the challenges to adhering to high ethical standards. You will be introduced to various types of ethical issues within the investment profession and a framework as a way to approach ethical decision-making. You will learn to look at and evaluate decision from multiple perspectives, develop sound judgment and decision-making skills and avoid making decision that have unanticipated ethical consequences. You will learn to recognise areas that are prone to ethical pitfalls and identify and process those circumstances and influences that can impair judgment and lead to ethical lapses.

Module aims - intentions of the module

The primary objective of this module is to introduce concepts that facilitate an understanding of the significance of ethical behaviour in the investment industry and the challenges associated with upholding high ethical standards. Students will become familiar with the Code of Ethics and Standards of Professional Conduct that CFA candidates must adhere to, aligning with broader industry expectations. Additionally, you will comprehend the necessity for elevated ethical standards in the investment sector and gain proficiency in the Global Investment Performance Standards.

Students will explore various ethical dilemmas within the investment profession and adopt a framework for approaching ethical decision-making. Through the application of this framework and the analysis of specific circumstances for each available alternative, participants will learn to discern the optimal course of action to fulfil their responsibilities in an ethical manner.

The overarching goal is to employ an ethical decision-making framework that encourages students to view situations from multiple perspectives and articulate their actions to a broader stakeholder audience. Utilising such a framework enables effective examination of choices in the context of common conflicting interests tied to professional obligations, such as researching, developing investment recommendations, and managing funds for others. Students will cultivate the ability to evaluate decisions from various viewpoints, refine judgment and decision-making skills, and avoid decisions that may lead to unforeseen ethical consequences.

Skills acquisition: Students will develop a range of transferable skills and the ability to relate an ethical decision-making framework to a firm’s or profession’s code of ethics. You will practice ethical decision-making skills to confront hard issues effectively and make ethical good decisions despite the reality of conflicts.

Research in teaching: The module builds on recent investment management research within the finance disciplines to define ethical decision-making tools and theories.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

• 1. Explain the fundamental concepts of ethics, including the principles and values that underpin ethical behaviour.
• 2. Identify the ethical responsibilities required by the Code of Ethics and Standards of Professional Conduct
• 3. Distinguish between ethical and legal standards, understanding the nuances and intersections between the two.
• 4. Evaluate various challenges and obstacles that individuals might encounter in maintaining ethical behaviour.

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

• 5. Apply a framework for ethical decision-making in the context of the investment industry
• 6. Recommend practices and procedures aimed at preventing violations of the Code of Ethics and Standards of Professional Conduct in professional settings.

ILO: Personal and key skills

On successfully completing the module you will be able to...

• 7. Develop effective written communication skills, together with analysis, argument and commentary.
• 8. Demonstrate the practical application of the Code of Ethics and Standards of Professional Conduct to real-world situations involving issues of professional integrity.

Syllabus plan

• Ethics and Trust in the Investment Profession
• Code of Ethics and Standards of Professional Conduct
• Professionalism
• Integrity of Capital Markets
• Duties to Clients
• Duties to Employers
• Investment Analysis, Recommendations and Actions
• Conflicts of Interests
• Global Investment Performance Standards

Learning activities and teaching methods (given in hours of study time)

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

Details of re-assessment (where required by referral or deferral)

Re-assessment notes

Defer - As first time

Refer - Capped at 40%

Indicative learning resources - Basic reading

• Ethical and Professional Standards, CFA® Program Curriculum Level I Volume I, CFA Institute.

Key words search

Ethics, Corporate Governance, ethical decision making