Professionalism Counts, July 2024

Setting the Tone

We’ve all heard the phrase “tone from the top,” which rose to prominence in the wake of the corporate scandals of the early 2000s. The phrase is shorthand for the idea that an organization’s leadership sets the ethical tone for their organization. But it is not only the C-suite that sets the tone; leaders at all levels influence their reports and peers. Even if you lead a small team, you set the tone for those who report to you.

Research has shown that people come to view the ethical standards of their organization or profession as the norm and adopt them as their own. Employees who see their managers and top leaders acting ethically are likely to behave ethically themselves; the reverse is also true.

The current Boeing scandal is a reminder of the importance of a strong, ethical corporate culture—and how badly things can go wrong when an ethical culture is not a top priority. Simply having a code of conduct isn’t enough. (Boeing has one.) Leaders and managers at all levels must communicate the importance of following the code of conduct and follow it themselves. And not only must they follow the code; they must be seen to follow the code and set the expectation that their subordinates will follow the code. Finally, the code must be enforced, with consequences for breaches.

Actuaries are fortunate in that they have not just a Code of Professional Conduct, but a fully fledged professionalism framework to help them maintain high standards—the Code of Professional Conduct, the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States (USQS), and the actuarial standards of practice (ASOPs). The profession has also created the Actuarial Board for Counseling and Discipline (ABCD) to facilitate compliance.

While the “D” of discipline stands out, the “C” of counseling is just as important—perhaps more so. As someone involved in the establishment of the ABCD said, “Ultimately, counseling is a much more powerful tool than discipline. Discipline is what you want to apply when all else fails. We wanted to have the ability, when individuals had unknowingly violated standards, to make sure that they understood what they should be doing. If people who know better continue to violate standards, we can always resort to punitive actions.” Reflecting that view, the ABCD provides a highly valuable service, the request for guidance (RFG) process. Actuaries may submit an RFG on professionalism issues to the ABCD and discuss the matter confidentially with an ABCD member.

What you can do

Whether you are leading the organization or supervising a handful of actuaries, you can take steps to encourage a strong culture of professionalism in your workplace:

Lead by example and promote the Academy as a resource for actuaries.
Set expectations that all work and behavior will meet the standards set in the Code, USQS, and ASOPs.
Talk about the importance of professionalism and resources available to actuaries in your work often.
Set aside time for more formal discussion and training on ethical issues, the Code, the USQS, and the ASOPs.
Tell your reports about times you faced ethical or professionalism issues and how you resolved them.
Encourage your reports to discuss professionalism issues openly and access Academy resources. If they are not comfortable doing so, encourage them to submit an RFG.
Complete your CE requirements each year and require your reports to do so—and encourage them to volunteer.
Take care when encouraging staff to meet goals. (There have been cases where exhortations to meet goals have inadvertently led to staff breaching ethical codes.)

Our standards were put in place to protect the public and earn the public’s trust. Without them, the chance that individuals could be harmed is greater.

If an actuary takes shortcuts or otherwise disregards the standards, the end-users of the products actuaries work on—any one of us—could be financially harmed if the companies and organizations providing the products they rely on are unable to deliver.

By setting the tone for your organization or even just a small part of it, you are being a strong advocate for and ambassador of the actuarial profession, which is critical toward helping to maintain the profession’s standards and the public’s trust in actuaries.