Discussion on Harry Markham’s loyalty dilemma PDF

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Discussion on Harry Markham’s loyalty dilemma Harry Markham, who graduated Master of Finance in 2004 in a top business school in the United States, had worked for a firm called Investment Consulting Associates (ICA) as an investment advisor. The main mission of the ICA was to give investment advice to pension funds. While working at the firm, he gradually realized that the public sector pension fund viabilities were undervalued, which lead him to the dilemma of reporting it or not, or he had to give advice for state treasurers and boards of trustees using those wrong numbers. If he reported it, he and his firm would be fired. But as an investment advisor, Markham had a responsibility to help plan sponsors to make good investment decisions. Moreover, Markham had to attest to his compliance with Code of Ethics and Standards of Professional Conduct and he might not make any misrepresentations in investment analysis recommendations. Now, he was in between his firm and the investors who needed his advices. And he had to take his side before the conference presentation. He had duties to his employers which was loyalty, additional compensation arrangement, responsibility of supervisors. And he also had duties to his clients (loyalty, prudence and care, fair dealing…). What should his decision be? Loyalty to his firm or loyalty to his clients? To solve this situation, critical thinking must be use. Prom my point of view, some question should be used to understand the situation, analyze data and draw conclusion (College success, 2015). Firstly, what was the problem about? The problem was about Markham’s dilemma in choosing sides, his employers or his clients when he realized there was a mistake in accounting data of his firm which undervalued the reliabilities of the public sector pension fund. He then hesitated between telling the truth or not.

Secondly, what are the options? Actually, there were two obvious options to choose from: telling the truth which might lead to losing his job and ruining his firm. On the contrary, if not telling the truth, he might break his duties to his clients which was also against the code of ethics and standards of professional conduct. In my opinion, as an adviser, he must first be honest, brave to face the truth that there was something wrong with the accountant data. The reason is that if he spoke up, I don’t think he would be interpreted as disloyalty towards his firm because he was an honest man who dared telling the truth. His firm might face many big problems but to its clients, this company was worth believing. Of course the firm needed to compensate an appropriate amount for its clients but finally, the gain would be much more than the lost. So, I think he should address the issue in front of the conference and tell them a solution for it. My decision comes from data in the text and my own knowledge and experience. I have carefully read and analyzed those information, researched on the codes of ethics and standards of professional conduct. Looking at the exhibit 1 in the case study, we can see that how underfunded the state pension was comparing to economists estimated. Moreover, according to the standards, “high ethical standards are critical to maintaining the public’s trust in financial markets and in the investment profession” (Loyalty Dilemma Case Study). All members must abide by the Code and Standards or they will face disciplinary sanction by CFA Institute. So why risk his career for breaking the rules? To conclude, Markham’s situation was difficult and hard to have a final decision because it effected the firm of else their clients. By using critical thinking to analyze the issue, I think he must choose to tell the truth publicly so that his firm’s dignity will remain good in its investors.

Reference: Loyalty Dilemma Case Study (n.d) https://mitsloan.mit.edu/LearningEdge/Leadership/HarryMarkhamA/Pages/Harry-MarkhamLoyalty-Dilemma-A.aspx College success. (2015). Retrieved from http://open.lib.umn.edu/collegesuccess/ or download the pdf....