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CFA Level I · CFA Level I Exam · Guidance for Standard VI: Conflicts of Interest

An analyst's firm has an employer policy restricting outside board membership. The analyst is invited to join the board of a local company that she does not cover and believes poses no real conflict. The analyst's most appropriate action under Standard VI(A) is to:

She should comply with the employer's restriction. The guidance states that the mere appearance of a conflict may cause problems, employers may prohibit outside board membership to avoid it, and members and candidates must comply with such restrictions even where no real conflict exists.

  1. Aaccept the seat, since she does not cover the company.
  2. Bcomply with the employer restriction, since the appearance of a conflict may create problems.Correct
  3. Caccept the seat and disclose it to clients only, since the policy is the employer's concern.

Explanation

The mere appearance of a conflict can create problems for members and employers, and employers may prohibit activities such as outside board membership. Members must comply with these restrictions even if they see no real conflict.

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