Skip to content

CFA Level I · CFA Level I Exam · Guidance for Standard IV: Duties to Employers

A portfolio manager is invited to join the board of a local company unrelated to his employer's clients. His employer explicitly prohibits outside board memberships to avoid the appearance of conflicts. The manager believes the role would create no real conflict. The manager most likely:

The manager must comply with the employer's restriction. Employers may prohibit activities like outside board membership to avoid even the appearance of a conflict, and Standard VI(A) guidance requires members and candidates to follow those restrictions regardless of whether the manager sees an actual conflict.

  1. Amust comply with the employer's restrictionCorrect
  2. Bmay accept if he discloses the role after joining
  3. Cmay accept because no actual conflict would exist

Explanation

The guidance notes that the mere appearance of a conflict can cause problems, so employers may prohibit activities such as outside board membership even where no real conflict exists. Members and candidates must comply with these restrictions. Disclosure after joining does not cure a prohibited activity.

Did you get it right without looking?

One question tells you little. A timed set on Guidance for Standard IV: Duties to Employers shows your real accuracy, how long you take and where you lose marks.

Practise Guidance for Standard IV: Duties to EmployersFree diagnostic mock

More Guidance for Standard IV: Duties to Employers questions