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A code of ethics for a global investment industry must therefore be universal and consistently applied to the highest standard, regardless of jurisdiction, to enable it to support the building of trust and integrity for the profession and its participants.INTEXTLINKTEXT” src=”/Pictures/web/y/x/x/Dr-Tony-Tan-CFA-Institut_660.jpg” />Tony Tan, co-head of ethics, standards and professional conduct at the CFA InstituteIt must also ensure that the stewards of assets act both in the spirit and the letter of the guidance set out therein, in pursuit of true professionalism.A code that supports this ethos can help industry participants in re-establishing awareness of the fundamental societal purpose of finance, which is to connect those who have capital with those who need it.In an interconnected global economy, employers and professionals must be aware of how their actions, products and services, impact on the long-term health of the capital markets and market participants. Decisions made in one country often have unplanned effects on others, and these ripples of change can quickly become huge waves.To ensure capital markets retain their role as efficient capital allocators for market participants, investment professionals must consider the broader impact of their decision-making processes, and those in authority must consider market sustainability in their corporate policies.This goes far beyond environment, social and governance (ESG) investment strategies.“A universally upheld code of ethics, improved hiring practices, continuing education and [flexibility] are all required to bring this shared goal to pass.”We must also encourage organisations to move away from hierarchical, cause-and-effect structures to ones that hire purpose-driven, ethical and highly educated talent. These hires will increase the industry’s alignment with its operating environment, and positively contribute to a society that benefits from a more professional investment management industry.So how do we support an industry fraught with complexity and nuance to do better?Standards and best practiceThe CFA Institute’s Code of Ethics and Standards of Professional Conduct, currently in its 11th edition, offers a benchmark for every investment management professional globally, regardless of job title, cultural differences or local laws.The Code and Standards are governed by the CFA’s Standards of Practice Council, a committee that has continuous oversight of them and meets periodically to ensure they remain relevant and guide best practice.Understanding of the Code and Standards is tested at each of level of the three-level CFA Program, and every CFA charterholder has committed to uphold the code by signing up to its principles and following them in their daily practice.The CFA Institute Professional Conduct Compliance and Enforcement group oversees this commitment by CFA charterholders, and additionally provides for the monitoring of 250,000 candidates in over 175 markets.Since 1987, CFA Institute has provided the industry with the Global Investment Standards (GIPS), which provide investors with investment performance measurement and reporting rules that are reliable and comparable across markets. Greater public understanding of these codes and standards, to which so many in the investment management profession are committed, will indeed support Raj Thamotheram’s belief that “investment can be a true profession”. Of course, self-regulation, standards and professional credibility must be established, integrated and fully embedded into the ecosystem of investment management if practitioners expect society at large to recognise their industry as a profession.A universally upheld code of ethics, improved hiring practices, continuing education and an industry that can flex to the changing needs of society are all required to bring this shared goal to pass.Tony Tan is co-head of ethics, standards and professional conduct at the CFA Institute. He is responsible for leading the institute’s efforts in advocacy, policy development and regulatory outreach in the Asia-Pacific region. This article is a response to Preventable Surprises CEO Raj Thamotheram’s February 2018 Long Term Matters column, ‘Investment can be a true profession’. Read the full article here.A universal culture of integrity, principles and ethics should be taught, reinforced and practiced. Yet while many of us champion and support this goal, public confidence in the investment management profession continues to suffer as corporate misconduct headlines persist.In his February 2018 article, Raj Thamotheram raised the question of ethics in the investment industry and the importance of a universal code of ethics that is fit for purpose and enforced. We agree.In a complex environment, even good people can make poor decisions. Across the financial services industry, local or regional norms often guide the day-to-day behaviour of employers, regulators and professionals. Situational influences can shape thinking, decision-making and conduct, and even the highest personal or local standards can fall short when compared to global ones.