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CFA Level I · CFA Level I Exam · Guidance for Standard I: Professionalism

A pension fund's investment committee member is choosing a new manager. A candidate manager's representative offers to donate to the committee member's favorite charity, which the committee member suggested. Which statement best describes the application of Standard I(B)?

The donation breaches Standard I(B) for both sides. Soliciting gifts or contributions, even to a favorite charity, can be seen as influencing the hiring decision without benefiting the individual. Offering them to sway a hiring representative also fails to comply with the Standard.

  1. AThe donation is acceptable because the committee member gains nothing personally
  2. BThe donation is acceptable if the candidate manager discloses it to its own clients
  3. CThe donation breaches the Standard for both parties because it could be seen as influencing the hiring decisionCorrect

Explanation

Solicitations need not benefit the member personally to conflict with Standard I(B). Requesting contributions to a favorite charity can be perceived as an attempt to influence the decision. Offering such donations with intent to impair another person's objectivity is also non-compliant.

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