CFA Level I · CFA Level I Exam · Guidance for Standard IV: Duties to Employers
Marcus Obi is employed by a brokerage firm whose written policy prohibits staff from serving on outside company boards. Obi is invited to join the board of a local company he does not cover. The policy does not conflict with any law or with the Code and Standards. Under Standard IV(A), Obi most likely should:
Obi should decline the board seat. Standard IV(A) implicitly requires members to follow employer policies governing the employment relationship when those policies do not conflict with laws or the Code and Standards, and a ban on outside boards is a permissible restriction even if no real conflict exists.
- Aaccept the seat because the company is outside his coverage universe.
- Bdecline the seat, as members must comply with employer policies that govern the employer–employee relationship.Correct
- Caccept the seat and disclose it only after the first board meeting.
Explanation
Standard IV(A) implies an obligation to comply with employer policies governing the employer–employee relationship, provided they do not conflict with law or the Code and Standards. Employers may prohibit outside board membership to avoid even the appearance of a conflict. Not covering the company does not override the policy, and delayed disclosure does not cure a prohibited activity.
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