Jorge Lopez, CFA, is responsible for proxy voting on behalf of his bank's asset management clients. Lopez recently performed a cost-benefit analysis, showing that proxy-voting analysis might not benefit the bank's clients. As a result, Lopez immediately changes the proxy-voting policies and procedures without informing anyone else of the change. Lopez now votes client proxies on the side of management on all issues with the exception of major mergers where a significant impact on the stock price is expected. Lopez least likely violated the CFA Institute Standards of Professional in regard to:
A is correct because there is no violation of Standard Ⅲ (A) Loyalty, Prudence, and Care by performing a cost-benefit analysis showing that voting all proxies might not benefit the client and concluding voting proxies may not be necessary in all instances. However, even though voting proxies may not be necessary in all instances, part of a member's or candidate's duty of loyalty under Standard Ⅲ (A) Loyalty, Prudence, and Care includes voting proxies in an informed and responsible manner, which is not being done by Lopez by automatically voting with management on the majority of issues. In addition, members and candidates should disclose to clients their proxy-voting policies, including any changes to that policy as required by Standard III (A) Loyalty, Prudence, and Care, which has not been done.