LOS 1.a: Explain ethics.
Ethics can be described as a set of shared beliefs about what is good or acceptable behavior and what is bad or unacceptable behavior.
Ethical conduct has been described as behavior that follows moral principles and is consistent with society's ethical expectations.
Can also be described as conduct that improves outcomes for stakeholders,（利益相关者 ) who are people directly or indirectly affected by the conduct. e.g. clients, co-workers, employers, and the investment profession as a whole.
Ethical conduct is behavior that balances your self-interest with the impact on others.
LOS 1.b: Describe the role of a code of ethics in defining a profession.
Code of ethics is a written set of moral principles that can guide behavior by describing what is considered acceptable behavior. Some codes of ethics include a set of rules or standards that require some minimum level of ethical behavior.
Profession refers to a group of people with specialized skills and knowledge who serve others and agree to behave in accordance with a code of ethics. A professional code of ethics is a way for a profession to communicate to the public that its members will use their knowledge and skills to serve their clients in an honest and ethical manner.
LOS 1.c: Identify challenges to ethical behavior.
Individuals tend to overrate 过高估计 the ethical quality of their behavior on a relative basis and overemphasize the importance of their own personal traits in determining the ethical quality of their behavior.
External or situational influences are a more important determinant of the ethical quality of behavior than internal(personal) traits that influence behavior. e.g. social pressure from others.
LOS 1.d: Describe the need for high ethical standards in the investment industry.
Investment professionals have an special responsibility because they are entrusted with their clients' wealth.
Investment advice and management are intangible products, making quality and value received more difficult to evaluate than for tangible products.
Unethical behavior: lost trust, loss financial supports for borrowers, reducing jobs, growths and innovation.
Some behaviors such as providing incomplete, misleading, or false information to investors, can affect the allocation of the capital that is raised, negative consequences extends to all the participants in an economy.
LOS 1.e: Distinguish between ethical and legal standards.
Not all unethical actions are illegal, and not all illegal actions are unethical.
e.g Whistleblowing behavior, civil disobedience.
New laws and regulations often result from recent instances of what is perceived to be unethical behavior.
Ethical decisions require more judgement and consideration of the impact of behavior on many stakeholders compared to legal decisions.
LOS 1.f: Describe and apply a framework for ethical decision making.
Ethics should be integrated into a firm's decision making process. This will allow decision makers and teams to consider alternative actions as well as shorter- and longer- term consequences from various perspectives, improving the ethical aspects of their decisions.
Using a framework for ethical decision making helps individuals identify the important issues involved, examine these issues from multiple perspectives, develop the necessary judgement and decision making skills required, and avoid unanticipated ethical consequences.
Identify: Relevant facts, stakeholders and duties owned, ethical principles, conflicts of interest.
Consider: Situational influences, additional guidance, alternative actions.
Decide and act.
Reflect: was the outcome as anticipated? Why or why not?