Dealing With Critical Ethical and Professional Issues

An honest assessment, and possibly outside resources, can aid in remedying questionable working situations.

by Sheree Clark
December/January 2007

Q: The people I work with and I have opposing principles, and I really don’t have a lot of respect for the way things are done around here. Until now I have closed my eyes, but it’s harder to do these days. What are my options?

While I understand your angst, your use of the term values is a little vague. Are we talking about questionable business practices and ethical lapses, or about some kind of harassment of you personally? Are the people you work with blatantly lacking in morals, or is it merely that the corporate culture is too relaxed for you? There is a pretty long continuum when it comes to what we individually defi ne as values, principles, integrity, etc. The fi rst step is to do an assessment of the rift between you and them and determine whether the possibility of a remedy exists.

Sometimes there just is no “gray” area. Identify a trusted colleague or peer with whom you can explore the topic of values in the workplace. Start the conversation in general terms, perhaps by asking what he or she likes best about the job and employer, and try to get a sense of his or her comfort level with the topic. If it seems appropriate, share your own observations and ask for feedback about your circumstances. Be careful not to let the conversation turn into a “gripe session.” While it is not essential that you have the support of a third party, a reality check can help uncover insights you might overlook.

And while you’re at it, you should ask yourself some thoughtprovoking questions about the situation: When did my feelings of mismatched values or priorities start? Was there a watershed moment that I can identify? How is this situation affecting me personally? Am I losing sleep or feeling generally more stressed out? Is my work suffering? Can I live with it if nothing changes? Has this ever happened to me before? Is it possible that I am stuck in a repeating pattern? Do other people in the organization seem to feel the same way that I do, or is it just me who perceives a problem? What needs to happen for me to feel the situation has been resolved? How far am I willing to go to find the resolution? Do I want to stay here? After evaluating your own role in the situation, identify the nature of the issue that needs to be addressed.

The way that you handle the sort of circumstances that you are facing will vary based on how personal the issue is, as well as the potential for legal issues. Business practice-related issues: The American Institute of Graphic Arts (AIGA) has released a series of brochures exploring critical ethical and professional issues encountered by designers. The series, titled Design Business and Ethics, examines key concerns a designer faces in maintaining a successful practice. Authored by industry leaders from across the country, each brochure offers practical ideas for approaching design issues. Many of the tenets described in the AIGA’s publications can also be applied to designers operating in corporate or inhouse design settings. One brochure you should review is :

“Business and Ethical Expectations for Professional Designers” (to download, visit www.aiga.org). Additionally, the AIGA publishes Standards of Professional Practice in which it specifically addresses:

• The designer’s responsibility to clients
• The designer’s responsibility to other designers
• Fees
• Publicity
• Authorship
• The designer’s responsibility to the public
• The designer’s responsibility to society and the environment

If your area of concern is specifically dealt with in one of the AIGA’s brochures or codes, you might use the document as a springboard for conversation with the leaders in your organization.

It is entirely possible that your colleagues are unaware that their behavior is not in keeping with our profession’s standards. Be advised, however, you may be perceived as condescending or self-righteous and your efforts not universally embraced. If the attitude you find troubling is prevalent within the organization, it’s possible you’ll be seen as a troublemaker and be treated accordingly. Before you take action, you’ll want to realistically assess your chances of effecting change.
Corporate culture-related issues:

All organizations have personalities and—just as with people—those personalities can evolve over time. The changes may be the result of growth and the addition of new staff, or could have come about because of outside infl uences such as an economic downturn or increased competition. Policy changes can affect morale and result in a climate shift within the organization.

It can be very stressful to be in a company that “isn’t the same place it was,” regardless of reasons for the transformation. Similarly, new hires sometimes discover that they misjudged the personality of the group when they accepted a job, and now fi nd themselves feeling miscast or even outcast. If you work in a larger corporation or fi rm, you might be able to manage the situation by seeking to relocate within the organization. A move to another team or even a change in where you sit can make an uncomfortable situation more tolerable.

If you discover that it’s not only you who feels that a cultural rift exists that needs to be fi xed, you may turn to an outside facilitator. An organizational consultant can facilitate a discussion or develop a series of exercises designed to help the group discover solutions and workable compromises. It may even be possible to work through cultural issues without an outside resource, if there is a particularly skilled communicator on the staff or management team.


Employment law-related issues:
Matters that relate to employment, personnel policy and behavior in the workplace are often more complex and may lead you to seek professional counsel. Such issues include sexual harassment, favoritism, discrimination, hostile work environment, etc. If your situation involves or could potentially involve employment law, the first steps that you take are very important. You should try in good faith to resolve the problem. This usually includes having a meeting with the human resources department and/or the offending party or parties in the workplace. You may also want to take the precautionary step of talking to an attorney who specializes in employment law, especially if you are not optimistic about the outcome. You’ll want to document your conversations or actions, in case you end up in a dispute or litigation.

Recommended resources:
How to Reduce Workplace Conflict and Stress: How Leaders and Their Employees Can Protect Their Sanity and Productivity from Tension and Turf Wars, by Anna Maravelas, $14.99, Career Press, www.amazon.com How Honesty Pays: Restoring Integrity to the Workplace, by Charles E. Watson, $39.95, Praeger Publishers, www.amazon.com Your Rights in the Workplace, by Barbara Kate Repa, $29.99, Nolo Corporate Integrity: Rethinking Organizational Ethics and Leadership, by Marvin T. Brown, $75, Cambridge University Press, www.amazon.com The Balanced Company: A Corporate Integrity Theory, by Muel Kaptein and Johan Wempe, $44.50, Oxford University Press, www.amazon.com A Better Way to Think About Business: How Personal Integrity Leads to Corporate Success, by Robert C. Solomon, $15.95, Oxford University Press, www.amazon.com The Corporate Culture Survival Guide, by Edgar H. Schein, $26.95, Jossey-Bass Publishers, www.amazon.com

About the author:
Sheree Clark is managing partner of Sayles Graphic Design in Des Moines, Iowa; an author and speaker on organizational and business issues; and owner of Art/Smart Consulting, which provides selfpromotion and business strategies to creative professionals

Commercial bond market to open up

Many financial experts are full of optimism about the growth rate of the commercial bond market that should provide a boom for Vietnamese businesses in the near future.

According to Truong Hung Long, Deputy Director of the Finance and Banking Department under the Finance Ministry, the commercial bond market is on the cusp of huge gains.

The department’s director Pham Phan Dung said that Vietnamese businesses have an opportunity to expand their capital mobilisation both inside and outside the country through bond issuances.

According to the Finance Ministry, a legal framework has been made for businesses to issue bonds to the public. Both the Laws on Business and Securities, and Decree No. 52 holds regulations that create conditions for businesses to issue bonds for capital mobilisation.

Kicking off in 1994, it wasn’t until 2006 that the market showed signs that it may flourish. Decree No. 52 was issued last year to allow businesses to issue bonds separately. Under the decree, not only State-owned businesses but also private, joint stock and foreign-invested companies were permitted to issue bonds.

In 2006, local businesses raked in more than 8 trillion VND through bond issuances. Five trillion of which was scoffed up by the Electricity of Viet Nam (EVN), 800 billion VND by the Viet Nam Shipbuilding Industry Group (Vinashin) and 260 billion VND by the Song Da Corporation.

Close to 7 trillion VND worth of bonds were issued by local businesses over the first seven months of the year.

However, according to a representative from Citibank at a conference on the developing bond market in August, foreign investors are cautious of bonds issued by local businesses due to low confidence in domestic business transparency.

In order to issue bonds effectively, Dung proposed that Vietnamese businesses improve their business efficiency, competitive edge and make financial reports transparent to earn trust from investors.

Hisatsugu Furukawa, a consultant with the Japanese International Cooperation Agency (JICA), agreed with Dung that transparency on financial issues is the only way to earn investors’ trust.

In a bid to support bond issuance by local businesses, the Finance Ministry has hooked up with the Secretariat of the Association of Southeast Asian Nations (ASEAN) and the Japan-ASEAN Financial Technical Assistance Fund to draft business bond handbooks to supply essential information for local businesses to issue bonds abroad. They are scheduled to be released by the fourth quarter of this year.

Bond Market Collapse Worries Vermont Student-Loan Agency

Normally, this is a slow time of year for the Winooski-based Vermont Student Assistance Corp., which loans hundreds of millions of dollars annually to parents and students looking to finance higher education.

But the latest crisis on Wall Street has the state’s largest student lender scrambling to secure $190 million to meet the demand for loans it expects to make this fall.

The apparent collapse last month of the auction-rate securities market, which VSAC relies on to finance its lending, poses no threat to students who have already borrowed, said Scott Giles, the agency’s vice president of policy, planning and research. However, it has threatened the short-term financial viability of VSAC, which currently lacks nearly half of the $390 million it needs for the 2008-2009 school year.

“Auction-rate securities were, for a long time, the most efficient way to sell bonds, take the money and give it to students,” Giles said. “It’s not very efficient now, nor will it ever be again.”

Nor, like most things related to the municipal bond market, is it easy to explain. Here’s one way to think about it: The sub-prime mortgage debacle may have finally found its mark in Vermont.

Auction-rate securities, or ARS, are variable-rate, long-term bonds that allow investors the opportunity to cash out at will and collect short-term interest rates, which are reset at auction every seven to 35 days. While a lack of bidders could result in a failed auction, in the past, underwriters — Wall Street banks such as Goldman Sachs, Lehman Brothers and Merrill Lynch — would submit a “clearing bid” to complete the auction and provide liquidity to bond holders.

The problems in the market peaked in mid-February when major underwriters refused to bid, instead allowing hundreds of bond auctions to fail. That kicked in a penalty, known as the “fail rate,” that increased — in some cases by more than double — the interest costs for bond issuers such as VSAC.

As a result, Giles said, VSAC is paying close to 1 percent more in interest on the nearly $2 billion in auction-rate securities in its portfolio. If the agency doesn’t refinance the bonds, the failure of the ARS market could cost VSAC $20 million. Giles said VSAC “has the ability to cover” the additional costs should it fail to secure re-financing before the end of the year. Likewise, because students continue to pay on existing loans, the agency has the resources to continue operations for the foreseeable future.

“We are prepared to draw upon our reserves to make sure Vermont students have access to student loans,” he said.

Giles’ optimism is in contrast to that of much larger student-loan agencies in Pennsylvania and Michigan, which have announced they will eliminate some student-loan programs or stop lending altogether for the time being. The problem in those states, Giles said, is the growing number of non-guaranteed private loans, which under current market conditions are a risky investment. (Private loans make up a small part of VSAC’s portfolio, about $54 million in 2007, down from $86 million in 2006.)

Just about everyone, including Giles, blames the collapse of the sub-prime mortgage market for declining confidence in the auction-rate securities market. The failure of bond-rating agencies and insurance companies to ascribe an appropriate level of risk to securities fashioned from billions of dollars in bad loans has spooked investors from the broader bond market.

Giles believes investors’ fears are “irrational,” especially when it comes to student loans, which are 97 percent guaranteed by the federal government. Moreover, he said, VSAC has the fourth lowest student-loan default rate in the country, making the agency’s loans a more attractive investment than those of less credit-worthy issuers.

“We actually believe the market will settle out,” Giles said. “At some point, people will start moving back into quality assets.”

Until then, VSAC is considering refinancing its bond portfolio with something called a variable-rate demand obligation. A VRDO, as it is known, is similar to an auction-rate security in that it would allow VSAC to borrow long-term while offering investors short-term interest rates.

Thomas Melloni, an attorney with the Burlington firm Burak Anderson & Melloni, said interest rates for a VRDO are set daily and weekly, and the “demand” function allows bondholders to cash out when they like. Unlike auction-rated securities, however, a VRDO requires a letter of credit from a bank or financial institution that agrees to meet the bondholders’ demand.

Vermont Treasurer Jeb Spaulding said officials are also exploring the possibility that the state pension fund “could play some role” in helping refinance some of VSAC’s existing debt. “There’s no way of knowing at this point whether that’s even possible,” Spaulding said. “First of all, that’s a board decision, and it will take a lot of due diligence.”

Indeed, timing could be VSAC’s largest hurdle at this point. Across the country, local governments and quasi-public agencies like hospitals and housing-finance and student-loan corporations that rely on auction-rate securities are desperately seeking ways to refinance more than $350 billion in total debt.

“Everyone is trying to do it at once,” Spaulding said, “and there is only so much capital out there.”

Under normal conditions, VSAC would wait another couple months to secure financing for the loans it will offer in the fall; that way, VSAC wouldn’t be paying interest to investors who are backing the loans before the loans themselves started earning revenue for the agency. Giles said VSAC has begun talking to various financial institutions about lines of credit to support re-financing through VRDOs.

Giles allowed that, should VSAC fail to refinance its bond debt, the federal government might have to step in. VSAC is the “lender of last resort” for the state of Vermont, meaning the feds would loan money directly to the agency should the crisis reach epic proportions.

Giles said that kind of action would lead to “complications that people will want to avoid.” However, he doesn’t believe it will come to that.

“This is a serious situation,” he said, “but one thing we don’t want to do is to create a sense of panic.”

Different Types of Mutual Funds

Everyone claims to have the best mutual funds out there on the market. In fact, deciding what mutual funds to go with can be a daunting task to a new investor who has decided to take the plunge. However, determining where the best mutual funds really can be found is not very difficult. It just requires a little research.

If you're looking for the best mutual funds, one of the first things you want to look for is annual return. Mutual fund companies will often tout their annual returns as proof that their product is superior. Take it into consideration. Then move on.

Choosing the best mutual funds means examining the expense ratio of any given investment. This is probably the single most important factor you'll want to take into consideration before you make a decision. Net Asset Values, which are calculated and published daily, are also crucial to separating the best mutual funds from the impostors.

Mutual funds can't claim to be the best if they don't offer favourable turnover ratios, something that will be very important to you as an investor if you are looking at having a taxable account. Examining a mutual fund's fund prospectus is also crucial. Remember that companies are required to share this information with you before you invest.

Once you have understood and examined all these different aspects, choosing the best mutual funds out there suddenly won't seem like such guesswork. In fact, choosing the best mutual funds will have gotten a whole lot easier.

Bond investing. Information on investing in bonds.

Bond investing in today's market does not have to be the safe sane alternative it used to be. Bond investing today does not need to be relegated to the amateurs and safe haven seekers of the world. In fact bond investing can be very tricky and financially rewarding.

One of the best aspects of bond investing, besides profit of course, is the feeling that comes with bond investing. Bond investing is not about profit today, gone tomorrow. No bond investing is about building something for our town, community and world.

Bond investing is about being invested in the community as a whole. If that does not drive your forward, then maybe you should consider another aspect to bond investing. Maybe you should consider bond investing is one of the safer investment choices in today's topsy-turvy make it all or nothing marketplace.

No, for peace of mind and quality investing we must sincerely and honestly take a deep and long look at the world of bond investing. Sometimes it's nice to have money. But some sometimes it's good to feel good about your money and making profit. With bond investing you can surely accomplish this. So next time you are thinking about putting your money somewhere safe and yet still earning a nice profit, look into bond investing and see why it can be so very rewarding.