Skip to content

IAI Actuarial Core Principles · Business Management · Communicating strategy; culture and structure in decision making; strategy case studies

A pension consultancy in Mumbai has a strong culture of never challenging senior partners. A junior actuary, a member of the IAI, notices that a senior partner's valuation report uses a discount rate that appears unjustifiably optimistic and could mislead trustees. The partner dismisses the concern, saying 'this is how we do things here.' Which response best reconciles the firm's culture with the actuary's professional obligations?

The actuary should escalate the concern through the firm's internal or compliance route, document it, avoid allowing a misleading report to be issued, and seek IAI guidance if it remains unresolved. Professional duties of integrity under the Actuaries' Code take precedence over a culture that discourages challenge.

  1. AFollow the firm's culture, because obligations to the employer override all other duties
  2. BImmediately publish the concern in the press without informing anyone at the firm
  3. CRaise the concern through the firm's internal escalation or compliance route, document it, and not let the report be issued in a misleading form, seeking guidance from the IAI if unresolvedCorrect
  4. DResign silently and take no further action
  5. Alter the report on her own without informing the partner

Explanation

The Actuaries' Code requires members to act with integrity, and to ensure that their communications are not misleading, even if the firm's culture discourages challenge. The sensible approach is to escalate internally, document the concern and seek professional guidance if needed. Going directly to the press, silent acquiescence or unilaterally changing the report would each be inappropriate or breach duties of confidentiality and proper conduct.

Did you get it right without looking?

One question tells you little. A timed set on Communicating strategy; culture and structure in decision making; strategy case studies shows your real accuracy, how long you take and where you lose marks.

Practise Communicating strategy; culture and structure in decision making; strategy case studiesFree diagnostic mock

More Communicating strategy; culture and structure in decision making; strategy case studies questions