Professional Ethics and Governance
What the exam tests
This domain tests conduct expected of a credit officer: conflicts of interest, confidentiality, gifts and inducements, related-party dealing, whistleblowing, and the governance around credit approvals.
Core rules
- Declare actual, potential, and perceived conflicts; recuse yourself from the credit decision where a conflict exists.
- Keep borrower and customer information confidential, and use it only for legitimate purposes.
- Do not accept gifts or hospitality that could influence, or appear to influence, a credit decision.
- Related-party lending requires disclosure and approval outside the interested officer's line.
- Governance requires clear delegated authority, documented credit committees, and escalation of breaches.
Worked example
A credit officer's spouse owns 20% of a borrower applying for a ₦300m facility. The officer must declare the interest in writing, take no part in the appraisal, committee discussion, or vote, and ensure approval follows the related-party route. Taking part because the shareholding is "only through a spouse" breaches the conflict-of-interest rule and undermines the approval's validity.
Traps
Rationalizing gifts as relationship-building; using confidential information outside the credit process; failing to declare a conflict because it is only potential; and approving a related party in the ordinary line. Also avoid pressure from senior management overriding documented credit authority.
Key points
- Declare and manage conflicts, including perceived conflicts.
- Recuse from decisions where a personal interest exists.
- Confidentiality applies to all borrower information.
- Related-party lending needs independent approval.
- Follow delegated authority and document decisions.