Harry Markham, a pension fund investment advisor, is torn about whether to tell the board of trustees of the pension fund he is advising that he believes the value of their projected liabilities are actually much larger than what the actuaries say they are. Confronted by the differing viewpoints held by economists and actuaries on how to value liabilities, Markham wonders, in light of the CFA Code of Ethics and Standards of Professional Conduct that he attests to on an annual basis, what are his duties and responsibilities as a professional and to whom—the trustees, his firm, the pensioners—he owes his loyalty.
To introduce students to differing views between actuaries and economists on pension fund liability valuation, and how these views can create conflicts of interest; and get students to think about how they might practice values-based leadership in a business setting.
COULD BE TAUGHT IN THE FOLLOWING COURSE(S)
leadership, ethics, accounting
HARRY MARKHAM'S LOYALTY DILEMMA (A)
Educator Copy* *An educator (non-watermarked) copy of this case is available only to individuals who hold teaching positions at academic institutions and want to use the case in a course.
SUPPLEMENT MATERIALS UPON REQUEST
(for approved educators only)
Harry Markham's Loyalty Dilemma (B)