The CFA Institute has published a code of conduct for pension fund trustees, hoping it will help educate board members on the ethics of the investment profession.
Jonathan Stokes, director of standards of practice at the Charlottesville, Va.-based CFA Institute, said the institute previously has developed codes for various groups related to the money management industry. It was clear that there was a need for pension fund trustees, he said, noting trustees often have no background in money management.
We hope the code will further their understanding of ethics in the investment profession and participants will have better confidence that those who manage and are in charge of their retirement are held to the highest ethical standard, Mr. Stokes said.
The first and arguably most important concept of the 10-item code is that trustees act in good faith and in the best interest of scheme participants and beneficiaries.
That underlies everything else, Mr. Stokes said.
Among other principles: Act with prudence and reasonable care; act with skill, competence and diligence; maintain independence and objectivity by, among other actions, avoiding conflicts of interest, refraining from self-dealing and refusing any gift that could reasonably be expected to affect their loyalty; and deal fairly, objectively and impartially with all participants and beneficiaries.
The entire code is available on the CFA Institute's website at http://www.cfapubs.org/toc/ccb/2008/2008/3. Jennifer Byrd