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Case Studies
Personal relationship taking a higher priority
Nancy was a bank administration manager. Her brother, Gordon, was the owner of an interior decoration company. Nancy's bank decided to renovate the conference room on the directors' floor and Nancy was assigned to appoint a contractor for this project. Due to the urgency of the project and that the amount involved was small, she placed an order with Gordon without observing her bank's policy on the selection of contractors. She never disclosed their relationship to the bank.
Case Analysis
A bank employee should seek management's advice if he/she has any doubt about the propriety of any course of action, or if the employee finds his/her own interests may be in conflict with those of the bank. Nancy might breach the Code of Conduct[1] of her bank as she awarded the contract to her brother's company without disclosing their relationship to her employer. Even when Nancy was confident that the service provided by Gordon's company was as good as those of other firms, she should declare the interest to her employer.
[1] According to HKMA’s Supervisory Policy Manual CG-3, each authorized institute (bank) should develop its own Code of Conduct containing certain minimum conduct requirements which include “all staff should avoid situations that may lead to or involve a conflict of interest, actual or potential.”