Group members

Md. Rezaur Rahman 91701038

Afsana Sultan 91702004
Esmat Momtaz Emtu 917020
Afrina Binte Kamal 91702011
Ishrat Jahan Chowdhury 91702028
Suraiya Rahman 91702046

Case Summary:
Harry Markham: Chartered Financial Analyst (CFA) and Chief Investor advisors in ICA
(Investment Company Associates) since 2004.

Realization: Calculations for a public sector pension fund differ significantly from the
number being reported by the GASB (Government Accounting Standard Board)

Dilemma: weather to disclose his liability concerns or not to BOT

Case Problem:
 Ethical issue for Harry Markham
 His loyalty to his
o Firm
o BOT
o Pensioners
 Is at odds with his
o Personal & professional standards

Key Issues:
 Ethical issues between stated values & behaviors among stake holders:
o The firm (ICA & Harry)
o BOT for state pension fund
o State employees (Pensioners)
 Harry’s personal & professional code of ethics
 Discrepancy in how liabilities are calculated & impact for the long term (viability of
their plan)
 All stakeholders want to maintain status quo/equilibrium

Evaluate the Alternatives:

“Do not explain the liability issues”
 Pros
 BOT will be kept unaware of the
problem & will be happy
 He & his firm will save their jobs
 State pension fund will still have
political support
Cons
 Personal & professional ethical views
violated
 Harms the interest of clients
 Loss of potential client & his job
 Unable to make sound investment
decision
 Employees will lose benefits & Tax
payers have to pay more

Evaluate the Alternatives:

“Explain the liability issues”
Pros Cons
 Shows loyalty to personal &  Could be viewed disloyal to his firm
professional ethics  He & his firm could be fired
 Allow him to better explain BOT the  State pension plan may lose taxpayers
true financial picture & provide sound support
financial advising  State pension plan could lose political
 Shows loyalty to people in the state support
retirement plan

Recommendation:
Harry Markham should take this issue to BOT and make them aware of the urgency &
complexity of the situation. After understanding the problem BOT members should discuss
this issue with the state treasure & convince him to bring down the discount rate from 8% to
3% which could help the government to lower its liabilities & save the country from future
economic crisis.

Even though election is just around the corner, state treasure should communicate to the
citizens the real scenario & assure them the discount rate will be increased in the future when
the government will have sufficient fund for the pensions. This would prevent the firm from
losing its clients as well as save the country from potential economic crisis.