A code of conduct is used to refer to a collection of rules and regulations that outline the proper practices and responsibilities of an individual, organization or party. In the actuarial profession, the professionals are involved in complex analysis and offer advice to their clients. Therefore, most actuaries are torn between the need for close relationships with clients and professional obligations. In other words, actuaries have an institutional obligation, as well as an individual profession. However, the code of conduct should be adhered to the latter, to ensure that they do not violate their ethical obligations.
Effect of a Code of Conduct on Minty’s Behavior
The February 2001 report was released to the foundation by the institute. This report had come from David Minty. However, the report was presented in a misleading way. Any slight adjustments made by the actuaries in their reports can have an enormous impact in the result. Therefore, there was a serious misunderstanding of the work of Minty. This meant that the foundation dealt with data that was not well understood. Therefore, in this case, the professional code of conduct should have prevented the mistake and altered Minty’s behavior. This is because actuaries deal with complex calculations (Haigh 2007)However, their code of conduct demands that this information should be well presented to the client without any impartiality. Ambiguity in the presentation of the report is a violation of the professional obligation of the individual.
The asbestos victims deserved compensation for the inconveniences and the harm cause. Looking at the work of actuaries, dealing with calculations and analysis seems to be the order of the day. However, the fact that the victims deserved compensation should have been at the mind of Minty. This does not call for the knowledge of the profession itself. It calls for adherence to a code of conduct by the actuaries. Therefore, Minty did his work as he should have done it. However, he had the obligation to make sure that the aim of his report met the ethical conduct of actuaries. He should have been more interested in the compensation of the victims than his relationship with the foundation (Lloyd 2010).
Unlike bank managers and other people who are in different positions of work, actuaries presence is not clearly felt by its stakeholders. This is because their role is advisory. Therefore, the decisions that are made do not seem to come from them. However, it is clear that the people who play the major role in the making of decisions of large firms are actuaries. That is the reason why they are most respected of many professions (Merritt 2007). Therefore, the greatest mistake that can occur to a firm can come from the actuaries. This is because he is responsible for the crucial decisions that are made in the respective firms. Therefore, a professional code of conduct, that is adhered to, can go a long way to make sure that most mistakes in large firms are omitted. This was the case of James Hardie Industries Limited. The ambiguity in Minty’s report might have seemed small at the time of presentation. However, at the time of implementation, it becomes magnified and the results can be catastrophic. It can even lead to the collapse of a large firm which has the potential to affect the economy of a nation (Martin 2011). On this, a professional code of conduct can be deemed to have been necessary in the alteration of Minty’s behavior (Sally 2011).
The professional code conduct did not outline all the consequences of violating it. This means that Minty did not foresee what would have happened as a result of his behavior. Therefore, the lack of enforcement of the code of conduct by the institute also contributed to his behavior. In the past, they had also had soft approaches in disciplining their members. Therefore, this contributed to the violation by Minty (Gordon 2010). It is a general reality that the enforcement the professional code of ethics is the main remedy to this incompetence and unethical behavior (Feathers 2004).
From the essay above, it is clear that a professional code of conduct is necessary for every profession. Its implementation and use is even more valuable. This is because it has the potential to prevent massive mistakes that are often made by large firms. This sums up to one conclusion with regard to Minty’s case. The enforcement of the professional code of conduct should have been able to alter the behavior of Minty that cost the first official scalp of the foundation. Just like any other professionals, actuaries have an ethical obligation that they should fulfill.