Question

Working for a financial investments company, what are the metrics that we should apply that would help us understand that the environment is sufficiently ethical and we can rely on the financial and operational metrics? Explain?

Answer 1

one of the most important metric is the presence of 'chinese wall' in a financial institution. This hypothetical wall required that any information should not leave one department of the company to reach other department. And, that any person who does not have any relevence should not have access to the data from any other department other than his own. This prevents a case of conflict in between the business units.

For example: I am an investment banker and I have to get its IPO done, now I want the companies shares to go up. But, for this I cannot take help from the trading devision of my investment bank which can produce a praising report just becase the company is our client.

Other thing is insider trading. This one goes beyond the chinese wall as the information can come from even outside the firm. Any investment company should keep a check that no such illegal trading is happening at their trading floor. To keep a check on this regular interview are conducted with the employees in a casual way.