CFA Level I · CFA Level I Exam · Guidance for Standard VI: Conflicts of Interest
A candidate working as an analyst is invited to join the board of a local company unrelated to her firm's coverage universe. Her employer's policy restricts outside board membership. Under Standard VI(A), the candidate should most likely:
She should comply with the employer's restriction and promptly report any conflict that is not resolved. Standard VI(A) guidance requires members to follow employer restrictions on outside boards, which exist to avoid even the appearance of a conflict.
- Ajoin the board and disclose it to clients only.
- Bcomply with the employer's restriction and report any unresolved conflict promptly.Correct
- Cjoin the board because no coverage conflict exists.
Explanation
The guidance says employers may prohibit activities such as outside board membership to avoid even the appearance of a conflict, and members must comply with those restrictions. Unresolved conflicts must be reported promptly to the employer. Joining anyway or telling only clients ignores the employer.
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