Ethics is about proper conduct. In order to decide whether conduct is proper, we need a yardstick. In everyday life, the yardstick for ethics is provided by our values, which are our fundamental beliefs. In Canadian society, our fundamental values would include those for:
- the sanctity of human life
- freedom of speech
- freedom of conscience
- the right to hold private property
Ethical conduct conforms to approved standards guided by our fundamental values, whereas unethical conduct does not.
In the securities industry, maintaining high ethical standards serves to protect investors and also serves to protect the reputation of firms, individuals, and the securities industry as a whole. However, distinguishing what constitutes ethical behaviour cannot be prescribed for every possible situation. When making an ethical judgment, you should ask yourself the following questions:
- Is the action legal?
- Does it conform to my firm’s policies?
- Would I be embarrassed if my supervisors, colleagues, clients, family, or friends knew all the details?
- How would the public view the conduct if it was reported in the news?
- Would the practice likely be an accepted industry practice?
- Would I approve if others acted in the same way?
- How would I feel if I were the subject of the action?
- Am I compromising my personal ethics in any way?
- Does the action make me feel uncomfortable?
Where the answer to any of the above questions would indicate a contravention of the values contemplated, you must seriously consider whether the behaviour is ethical.
The Golden Rule
It is important to note that ethics is really a moral judgement of what is right or wrong based on our collective societal values. Actions may be legal or permitted but not necessarily ethical. In these situations, it is common to be governed by the so-called Golden Rule:
“Do unto others as you would have them do unto you.”
The Golden Rule has a very long history and has roots in societies in both the eastern and the western hemispheres. This testifies to its enduring and universal applicability.
Ethical conduct in the securities industry is governed by the requirements established in securities legislation and regulations. These requirements are rooted in the specific realities of the industry, in particular, the paramount need for trust. In order for the securities industry to function properly, clients must be confident that the industry participants that they deal with are trustworthy and honest.
The concepts of ethics and standard of conduct are further explored in the Ethics and Professional Conduct Course. Register now to learn more.