Paul Greenwood, Chairman of the Professional Affairs Board, gives some insight into the Professional Conduct Standards (PCS)

(this article was first published in the October 2005 issue of The Actuary)

The natural reaction is "Of course". But why are you so sure it is true? Have you thought about it this year? When have you felt under pressure to bend (or break) your professional ethics?

Ten years ago all boards of listed companies were pretty comfortable with their governance structures; but think how much they have changed because of Cadbury, Higgs, Turnbull and Sarbanes-Oxley.

Some scenarios that might be relevant to you are:

• Your company is considering a strategy which you feel may conflict with the public's best interests. What should you do?
• Your best mate has had a tip for a share and tells you down the pub that he wants to invest a considerable sum of money. You do not work in the investment area; but at least know a good deal more than he does. Can you advise him?
• "We have a strict code of Chinese walls in our firm; therefore the conflict of interest thing doesn't apply to us". True or false?
• A new firm of consultants launches in the UK market with a promise of undercutting the lowest quote for actuarial services by 25%. How do you compete?
• It's just you and your boss in a two-person actuarial consultancy. You are seriously uncomfortable with something she had just done. Are your first priorities to your boss, the profession, the client or yourself?

Confidentiality and conflicts of interest form the basis of many of these questions. What alternative actions are possible? Which are acceptable? Is the answer obvious?

This applies to You. And You. And You.

If you work for a large firm, whether insurer or consultant, you naturally comply with their ethical standards. But does that meet all the profession's requirements? And some issues are purely personal or unconnected with your employment,

In some circumstances compliance with the PCS may require careful analysis and the determination to undertake a difficult or even a painful action. Even if you work outside the UK or are fully retired, you are always required to comply with the PCS (as well as the standards of any other relevant actuarial association),

The profession, through the Professional Guidance Committee (PGC) can assist you on a confidential basis to reach your decision, sometimes by providing contact with a suitably experienced actuary who helps to focus your analysis. Please contact the Secretary to the Professional Affairs Board (PAB), Richard Maconachie, in the Edinburgh office (richard.maconachie@actuaries.org.uk, or telephone 0131 240 1301). Please note that such contact will not preclude disciplinary action if a complaint is received.

All professions are experiencing an increased level of complaints about non-adherence to professional standards: medics, accountants and lawyers are affected as well as actuaries. The Morris Report remarked favourably on the changes the UK actuarial profession made to its disciplinary schemes from 1 January 2004. However, the level of awareness amongst the profession of the content and implications of the PCS, which is generally the basis of any potential misconduct that causes a disciplinary action, is less than appropriate.

Over the next few months there will be occasional articles published in The Actuary setting out actuarial dilemmas. When reading them, please think how the circumstances and issues can be translated to be relevant to your own circumstances. There will be further analysis of the scenarios in subseqent articles. Letters to the Editor will be welcome.

Additional material

• Professional Conduct Standards (PCS) case studies
• Results of PCS awareness survey (Jan 2006) [pdf]
• Frequently asked questions