Investment Ethics: Analyzing Harry Markham's Loyalty Dilemma

This case study delves into the ethical dilemma faced by Harry Markham, a financial consultant at Investment Consulting Associates (ICA), regarding the valuation of public sector pension fund liabilities. Markham discovers that the actual liabilities are significantly higher than reported figures, posing a conflict between adhering to his professional ethics and satisfying his firm's and clients' desires to maintain lower, potentially misleading numbers. The analysis explores alternative courses of action, emphasizing the importance of ethical conduct, compliance with regulations, and transparent communication with clients. It argues for prioritizing ethical standards and suggests strategies for persuading the board of directors to adopt a more accurate and responsible approach to pension fund valuation. The solution highlights the long-term benefits of maintaining professionalism and integrity in the financial industry.

Running head: CASE ANALYSIS
Case Analysis
Name of the Student
Name of the University
Author notes:

1CASE ANALYSIS
Main issue of the case
The firm that harry Markham worked for was a consultancy firm that provided
investment advice to its clients. The main issue of the case lies in the fact that he found
the condition of the liabilities of the public pension funds to be getting unfavourable over
time. He found out that the value of liabilities of the funds would amount to twice the
presently valued amount if he used his finance skill. This would pose no threat provided
he could make changes to the figure on the company (Bowen, Fidgeon & Page, 2014). It
was however not possible since this would lead to violation of the trust of the board of
directors. The issue revolves around the fact that his role as a financial adviser implies
that he provides ethical advice to the clients although the scenario would result in
violation of the CFA Code of Ethics and Standards of Professional Conduct.
Alternative courses of action
The current course of action on the part of Markham would imply that there would be an
incidence of violation of the CFA Code of Ethics and Standards of Professional conduct. The
board of directors did not intend to listen about the fact the actual numbers that were provided by
Government Accounting Standards Board (GASB). GASP shared their long term goals by
setting the rate of discount to 8%. This was opined by the economists as “nonsense valuation”.
The alternative action would be to persuade the board of directors by gaining support of other
members. They would have to be reinstated and reiterated about the fact that the current
expectations of the organization are unrealistic and therefore could lead to unrealized goals and
violation of ethical standards.

2CASE ANALYSIS
Significance of the alternative course of action
It is necessary for companies to abide by the laws and regulations that are set by government
bodies. The alternative course of action which is characterized by persuasion of the board of
directors by reinstating the codes of ethics. This action plan should be followed in order to
ensure that the company abides by the Code of Ethics and Standards of Professional Conduct.
This will reflect the companies understanding of the current laws, would showcase their
reliability on clients of company and its duties towards the clients (Riek & Howard, 2014). The
company should inform their clients about the actual valuation and state of their pension fund.
Clients are the consumers of the services that are offered by the consultancy firm and therefore
should be dealt with fairly (Mikulincer, Shaver & Berant, 2013). This plan will ensure that the
company is staying true to the goals and ethics regarding presentation of their performance. This
generally leads to enhanced client company relationships (Sjoerdsma, & Weele, 2015).
It can be opined that Mr. Markham should follow an alternative strategy that is same as the
above. This can be justified by stating the importance of the duties that companies have for their
clients. This should be followed as a company has to ensure fairness, should keep in mind the
importance of sustainability and the importance of actual presentation. This alternative solution
will help the company in maintaining professionalism. Professionalism is ensured when the
operations of the company showcase their knowledge of the law, projects unacceptability of
misconduct and false representation (Evetts, 2013). This should be carried out as it would help
the management to secure better positions in the market and would thus contribute the integrity
of the capital market as a whole.

3CASE ANALYSIS
If I had to confront the dilemma
The method of adaptation of the alternative course of action that has been followed by Mr.
Markham would ensure that the rights and interests of the clients are protected. It would also
ensure that the reputation of the company is not in jeopardy. Just as the alternative course of
action taken up by Mr. Markham, the same would be followed by me. I would have also found
myself in dilemma and would be concerned with the conflicting nature of the present business,
the interest of the clients and nature of acceptance of the board of directors. As the directors have
been found to provide contradicting opinions, it would be best suitable for me to develop a report
through which I could persuade and convince the board of directors’ towards support my
initiative. It can be said that creating a good report helps in projecting ideas effectively to the
desired people (Yıldız, Meydan & Güner, 2014). I would require to calculate the actual valuation
of the liabilities that is actually present in the company’s pension fund and would have to further
enumerate the outcomes of violation of ethical code of conduct.

4CASE ANALYSIS
Bowen, C., Fidgeon, P., & Page, S. J. (2014). Maritime tourism and terrorism: customer
perceptions of the potential terrorist threat to cruise shipping. Current Issues in
Tourism, 17(7), 610-639.
Evetts, J. (2013). Professionalism: Value and ideology. Current Sociology, 61(5-6), 778-796.
Mikulincer, M., Shaver, P. R., & Berant, E. (2013). An attachment perspective on therapeutic
processes and outcomes. Journal of Personality, 81(6), 606-616.
REFERENCES
Riek, L., & Howard, D. (2014). A code of ethics for the human-robot interaction profession.
Sjoerdsma, M., & van Weele, A. J. (2015). Managing supplier relationships in a new product
development context. Journal of Purchasing and Supply Management, 21(3), 192-203.
Yıldız, S., Meydan, C., & Güner, M. (2014). Measurement of intellectual capital components
through activity reports of companies. Procedia-Social and Behavioral Sciences, 109,
614-621.