This week we will analyze a case study by John Minahan and Cate Reavis, Harry Markham’s Loyalty Dilemma.
Harry Markham, a pension fund investment advisor, is torn about whether to tell the board of trustees of the pension fund he is advising that he believes the value of their projected liabilities are actually much larger than what the actuaries say they are. Confronted by the differing viewpoints held by economists and actuaries on how to value liabilities, Markham wonders, in light of the CFA Code of Ethics and Standards of Professional Conduct that he attests to on an annual basis, what are his duties and responsibilities as a professional and to whom—the trustees, his firm, the pensioners—he owes his loyalty.
- To introduce students to differing views between actuaries and economists on pension fund liability valuation, and how these views can create conflicts of interest;
- and get students to think about how they might practice values-based leadership in a business setting.
- Follow guidelines for writing a case study analysis are provided in the Course Resource module. These guidelines were adopted from the Ashford University Writing Center
- Case analysis report must be written according to APA standards.
- Submit case analysis report in Microsoft Word format.
Case Study Analysis Grading Rubric
Of Main Issues/Problems
understanding of the main issues/problems
in the case study.
most of the issues/problems.
Identifies and demonstrates
Acceptable understanding of
some of the
in the case study.
And Evaluation of Issues/Problems
Presents an insightful
Analysis of all
Presents a thorough
Analysis of most
Of the issues
Incomplete analysis of Some of the
Recommendations on Effective
a balanced and
critical view; presents a biblical perspective;
is both reasonable
And opinions with
Presents a somewhat one sided argument; presents a biblical perspective; demonstrates little
Little or no Action suggested, and/or inappropriate solutions proposed
to the issues in
the case study.
Links to Course Readings and Additional Research
Makes appropriate and Powerful connections between identified
and the strategic
in the program/ course readings and
lectures; supplements case
study with relevant and thoughtful research and
studied in program/ course readings
of the analytical
study with limited
Makes inappropriate or little connection
Studied in the program/course readings; supplements case
study, if at all, with incomplete research and documentation.
writing is free
of grammar and
spelling errors based on APA style manual
Or spelling errors,
But still a clear
Presentation of ideas; lacks
Organization based on APA style manual
Writing is unfocused, rambling, or contains serious
does not follow
specified guidelines based on APA style manual.
In Harry Markham’s Loyalty Dilemma, Markham, an investment advisor for pension funds, is torn about whether or not to tell the board of trustees of the pension fund he is advising that he believes the value of their projected liabilities are actually much larger than what the actuaries say they are. The actuaries’ valuations rely on what Markham believes to be an inflated discounted cash flow rate of 8%, a rate which is consistent with the Government Accounting Standards Board (GASB) rules. Economists and financial analysts like himself, however, believe that low-risk pension cash flows should be discounted at a low-risk rate, say 3% to 4% in the current environment. Confronted once again by the differing viewpoints between economists and actuaries on how to value liabilities, Markham wonders what, in light of the CFA Code of Ethics and Standards of Professional Conduct that he attests to on an annual basis, are his duties and responsibilities as a professional. Does he also wonder to whom he owes his loyalty? To the board of trustees of the pension fund, considered to be the client by many of his coworkers? To his firm? To the pensioners themselves whose financial future rests on the long-term health of their pension?
I want to get you to think about how you might practice values-based leadership in a business setting.
Your analysis should include:
1. Why is Harry Markham so conflicted?
2. Why do we have codes like the following in business?
- Code of Ethics
- Standards of Professional Conduct
3. What do you think Harry Markham should do?
This is not an all-inclusive list but your case should at least answer these three questions? Please follow the rules for completing a case study analysis.
Read Minahan, J., Reavis, C. (2012). Harry Markham’s Loyalty Dilemma. MIT Sloan School of Management, Case Study.
- Identify the key problems and issues in the case study.
- Formulate and include a thesis statement, summarizing the outcome of your analysis in 1–2 sentences.
- Set the scene: background information, relevant facts, and the most important issues.
- Demonstrate that you have researched the problems in this case study.
- Evaluation of the Case
- Outline the various pieces of the case study that you are focusing on.
- Evaluate these pieces by discussing what is working and what is not working.
- State why these parts of the case study are or are not working well.
- Proposed Solution/Changes
- Provide specific and realistic solution(s) or changes needed.
- Explain why this solution was chosen.
- Support this solution with solid evidence, such as:
- Concepts from class (text readings, discussions, lectures)
- Outside research
- Personal experience (anecdotes)
- Determine and discuss specific strategies for accomplishing the proposed solution.
- If applicable, recommend further action to resolve some of the issues.
- What should be done and who should do it?
- And a Summary