Discussion points and feedback:
- What areas of the Actuaries’ Code (the Code) should Erin be mindful of?
The two areas of the Code that Erin should be mindful of are Communication and Competence and Care. It's really important that the information she gives to the board is accurate and not misleading. The Communication principle of the Code states that “Members must take reasonable steps to ensure that any communication for which they are responsible or in which they have a significant involvement is accurate, not misleading, and contains an appropriate level of information.”
Erin wasn't involved in the entire project and although she could give an update to the best of her ability, there’s a risk she might have missed something and therefore there's a risk that the board could make a financial loss which could result in reputational issues - both for the firm and also personally. The Competence and Care principle states that “Members must ensure they have an appropriate level of relevant knowledge and skill to carry out a piece of work.”
- How could Erin have been clearer in her response to the board when she was asked about presenting?
Erin was put on the spot, and it was the first time she had attended a board meeting. Erin clearly felt pressure that she should present because that's what she was asked to do. Erin should consider her professional judgement and make sure her judgement is not compromised, and not under undue influence from the board to feel the need to present. The Impartiality principle states that “Members must ensure that their professional judgement is not compromised, and cannot reasonably be seen to be compromised, by bias, conflict of interest, or the undue influence of others.”
- The timelines for the project appeared very short – what could have been done to mitigate that?
Having the deadline for the transaction at the same time as the board making a decision was poor planning and didn’t allow for anything to go wrong. It put too much pressure on that meeting, on that decision, and too much pressure to approve it. More contingency should have been built in rather than being complacent. At the start of the video Vanessa was complacent and said that the transaction would be approved. It’s easy to view an important process with challenge and scrutiny as being a rubber stamp exercise when you repeat a piece of work over and over. However, there are things you can do to mitigate that, like making sure you change up the people that are involved, have a good peer review process, and rotate people you use for an independent view to ensure they remain independent.
- How could Erin have responded to Hari’s comments?
There were definitely some areas of concern in what Hari was telling Erin. Hari said that there had been no peer review on his paper, and that he was delighted there weren't many experts in the meeting to scrutinise his paper. In this scenario we don't know the context of what Hari was presenting, but this could be in breach of APS X2, Review of Actuarial Work. APS X2 states that “Members must consider whether to apply Work Review to Actuarial Work for which they are responsible and should, to the extent it is appropriate and proportionate, ensure that Work Review is applied, either in totality or by component, to that Actuarial Work.”
The Speaking up principle could help Erin here. The Speaking up principle states that “Members should speak up if they believe, or have reasonable cause to believe, that a course of action is unethical or is unlawful.” As Erin is new to the role, she may not be comfortable speaking directly to Hari, but she could wait for Vanessa to come back, or she could consult her company’s speaking up policy and guidance.
Hari suggested ‘winging it’ – there are occasions when there’s not sufficient time to prepare as thoroughly as you’d like and sometimes you have to make do with good enough and, by definition, good enough is good enough. If ‘winging it’ means making the best of a bad situation but making sure that you still meet the standards of your actuarial integrity, then it's not great, but it will do. If ‘winging it’ means you are blasé and you don't care that you're getting by on the bare minimum and could get away with it, then that is not good and is not in the spirit of the Code.
