Introduction

The most important factor that influence the enhancement of international maritime trade and facilitates
ship broker`s job is the development of technologies (communications and internet). At the same time, it
is not sufficient only to rely on internet and phone calls. A good broker`s aim is much more than this. It
is strongly recommended to insist on face-to-face communication. Sometimes, when there is no face-toface communication people feel free and may demonstrate a kind of behavior that will not do in real
life. One has to keep in mind these disadvantages of technological development. A good broker will
require a role of an agent, a servant of the client. In its essence, the role of the agent is to represent a
person or an organization. That is why it is of crucial importance to be a fair, honest and ethical broker.
The slogan in broker` s job is Our Word is Our Bond. It is an ethic from the 19 th century, adopted in
1801 by the London Stock Exchange. In 19 th century people used to make deals without signing any
contracts. Deals were based only on handshakes and the given words. The fact itself reveals that there
was little regulation other than that of reputation. Over the years, ethic norms were ignored by people
who were led merely by their mercantilism trying to get their personal profit. A good broker will require
a variety of skills to carry out the job not only complying with the written rules adopted in the system. It
is the moral values, the common sense and the ability to develop and sustain relationships that must rank
very highly within brokers` repertoire. This will allow the sector to select the most skilful and job
effectively brokers. The selected professionals will comply with
the ethical code and will rank reputation highly. There is a phrase circulating in shipbroking system Big
deal you are but not a great person that proves the statement of the lack of moral code in brokers` job.
Obviously, it emphasizes on the importance of ethical norms and code.
If we have to classify the ethical norms we can divide them into two basic groups:
1. Ethical norms in everyday life
2. Ethical norms in professional environment
Everyday Life Ethics (Common Sense Ethics)
Ethics is considered to be a set of moral principles that help us to define bad and good practices and to
react in accordance with our inner moral values. In fact, our reactions correspond to our beliefs what is
good and what is bad. This is the fundamental that provokes our reactions. It is a set of rules we choose
in our everyday life from. When a person analyzes a given situation in his/her mind and considers it is
not in compliance with his/her moral values, that very person begins to condemn himself/herself. In
such cases, it is obvious that there is or there will occur a problem with one` s ethical norms.
Ethical Norms in Professional Environment (Business Ethics)
Business ethics is considered to be a set of ethical principles and standards that guide and characterize
people` s behavior in their professional life. Business ethics is a fundament of principles that rules
professionals from a given sector to act according certain standards. It also outlines their personal
characteristics and ignores those who are unscrupulous and inefficient. That very fundament
autocorrects professional competitiveness and aims at saving the professional ideals.
Different professional groups, different masters and craftsmen are organized in sectors following
different principles. They comply with different sets of principles. These principles are unique in each
sector and ensure professional solidarity. A certain professional activity or service needs to pass a
serious control in the respective professional area in order to meet the requirements of the consumers.
From the professional point of view ethics is considered to be a set of norms that provides information
whether a given act is necessary to be performed or not. Professional ethics could be divided into two
main groups:
1. Descriptive ethics This type of ethics characterizes and it gives answers to the question 'What is?'
[1]
2. Normative ethics This type of ethics characterizes and answers the question 'What should be?' and
it tries to apply the respective moral system.
Violation of Ethical Norms
The competitiveness in shipbroking takes place in online space and it has made the shipbroking market
more competitive than ever. Unfortunately, that very fact presupposes violation and breaches of ethical

norms. Professional shipbrokers can provide you with various examples of repeatedly violation of the
ethical code by their colleagues. In fact, the number of brokers in ship trading sector is greater than that
of ship owners or charters. The mere fact of numbers is a small indicator about the competitiveness that
rules the market. [2]
I would like to give you an example for ethical norms violation from shipbroker` s professional life. As
you know, many brokers compete in the Spot market in hiring ships or cargoes. Everyone strives to get
the job. But there is something that is obvious for everyone in every concrete deal and namely it is the
ship owner who has circulated his ship on the market and hundreds of brokers are aware of it. The
potential broker who can get the job is the one who proves he/she is charter` s broker himself/herself. It
is that broker who knows very well that he/she will obtain a counter offer to the one he/she gives
himself/herself. But if it occurs that the broker who made the offer and showed the respective cargo did
not act as a charter` s broker but as a third-party` s one, then we have an example of ethic norms
violation. Usually, in these fixed situations brokers claim they are first hand brokers. But once
negotiations start it appears they are independent brokers who do represent neither ship owners nor
charters. Such type of working is not illegal but we consider it as non-ethical behavior. The example
illustrates the very fact that a certain act is not illegal but at the same time it is not moral.
In shipbroking sector the ethics realm is very tangible as it is a profession based on the mutual words
given by both sides. In its nature shipbroker acts as an agent of a ship owner or of a charter. It means
that the brokers act and take decisions on behalf of another person. It should be clearly stated that the
ship owner or the charter should trust their agent and ensure him/her confidence.
Baltic Exchange pays a particular attention to broker` s ethics in his/her professional life. A broker
who would like to become a member is obliged to accept brokers` ethical rules and principles. If a
broker tries to violate and ignore the ethical rules and principles set in the shipping sector, he/she will
risk his/her job and his/her good reputation and will be out of the competitiveness.
The maritime sector has been divided into several sub-sectors. Shipbroking is one of the most crucial
areas. It is included in the group of interdisciplinary subjects on international level. Brokers know each
other very well. We have even a joke saying that the most confidential and trusted information is the one
that could circulate 24 hours on the market.
Chartered shipbrokers pay particularly attention to their good reputation, self-confident and self-respect.
It complies totally with the ethical norms and brokers apply these ethical norms in their professional life
in order to develop their personality and enhance their professional experience.
It is the Institute of Chartered Shipbrokers established in 1911 that provides specializations for those
involved in shipbroking sector. The Institute has a motto just as the Baltic Exchange and it is Our
Word is Our Bond.
Types of violation
In order to be able to distinguish what is ethical and what is not in shipbroking one should be very well
aware of brokers, ship owners and charters` rights and duties. A shipbroker acts on behalf of another
person. The violation of ethical norms could occur in the following situations:
A shipbroker could exercise his/her job without care and diligence needed.
He/she would not be able to fulfill his/her obligations entitled. It is all about the so-called 'Fiduciary
Duties'. The word 'Fiduciary' itself originates from Latin and it deals with trust/confidentiality notions,
betray somebody` s trust.
A shipbroker would like to try to demonstrate specific knowledge and good practices in his/her job
without actually being able to do so as his/her personality lacks these qualities.
A shipbroker could hide information from the organization or the person he/she acts on behalf of.
A shipbroker could try to demonstrate inappropriate behavior to his/her employer, or, a little slang hereto play boss of his/her boss. He/she could try to sabotage the work process in the company he/she works
for.
A shipbroker could do fixings and get money in addition without informing his/her employer.
It is the shipping sector where the above-mentioned violations occur mostly and unfortunately, very
often. The following example illustrates a similar situation. An experienced shipbroker from 'X'
company takes advantages of his/her position and starts doing hi/her own fixings. Later, he/she opens
his/her own company where he/she incorporates all details of 'X' company clients and starts making
offers on the market not as an employee of 'X' company but as a newly-opened company owner. Another

example can be given a broker shares information about client` s portfolio with a friend, also a broker.
In this case, it is violation of information and confidentiality. The aim is to obtain personal benefits
which is not only illegal but also is not ethical. Unfortunately, our sector is full of such cases and most
of us have encountered such problems in our practice.
The above-mentioned violations of mutual responsibilities are considered to be violations of ethical
code.
Prevention of Ethical Code Breaches
As it was mentioned earlier, our institute` s motto is Our Word is Our Bond just like the Baltic Stock
Exchange. It is a slogan that underpins shipbroking practice. Members of these organizations are
supposed to abide by this statement and present specific skills and knowledge. A special control
committee will analyze whether a person possesses required qualities and skills to practice shipbroking
profession. It is all about testing brokers` trust, experience and professionalism. Our motto symbolizes
the crucial role of ethics in trading. A good shipbroker should be led by the following principles: [4]
1. Trust
2. Confidentiality
Trust
If a broker discredits the principle of trust he/she will be ignored by the market and by his/her fellows.
What does it actually means? Shipbroking is all about relationship between brokers, ship owners,
charters, buyers and sellers. We know each other and if someone would intentionally try to cause
damages the news would be spread worldwide within 24 hours and we would be informed. A good
shipbroker should keep client` s confidentiality in order to get the maximum. As it was said earlier, a
shipbroker is a representative of another person and if he/she makes something wrong, he/she will not
only discredit his/her client or employer but also will risk his/her career. A good shipbroker will require
not only profound knowledge of commercial, technical, geographical, historical, legal and cultural
information but also he/she will have to be able to apply it appropriately in order to obtain the best
possible terms for his/her clients. Such information is not always easily obtained as it is, in most cases,
confidential and market sensitive. A good broker has to use information wisely. If a broker undertakes
inadequate actions or relies on unverified information he/she will not only risk the respective deal but
will also lead to great loses for each party. Professionalism combines both trust and justice and only a
good shipbroker that has substantial knowledge possesses these qualities.
Confidentiality
The principle of confidentiality is very simple in its nature. All parties know each other in shipping
sector. Information is the key and the more information there is the better the service the broker will be
able to deliver. Once a broker has information he/she is the one to start negotiations. But here is the
nuance a good broker will not pass information immediately. He/she will find the most appropriate
person counterpart in order to provide him/her with that information. That person will be the contact
person. Otherwise, if a broker negotiated to get 2,5% commission from the deal, he/she would find that
the cargo has been fixed was offered on the market by other brokers with 5 % commission. Moreover,
correspondence between a broker and a client is confidential and if information passes to a third party
without client` s permission it will cost a broker a lot. We should keep in mind that the shipping sector
offers equal opportunities both to big and small broker company. It is the big companies that have
greater human resources and if such companies brokers contacts your client be sure that you will be at
risk.
Education and specialization are the key factors that could prevent ethical norms from violation. A wellspecialized broker has knowledge about the specifics on the market and characteristics of the market
players. Such a broker has an appropriate attitude towards these market players. One of the biggest
disadvantages in our sector is that employers do not require special education to be obtained by the
broker who applies for a position. When a company hires personal it is enough for the applicants to have
good command of English. Employers believe that they will be able to train the applicants to work as
brokers. At the same time, shipping market deals with big money and employers prefer to pay lower
salaries to the personal and recruits non-specialists. In this sense, I would like to remind you Socrates`
view on education:

'If you think education is expensive, try the cost of ignorance'

Actually, I do believe that brokers in shipping sector should be only those who possess needed
qualification and education. Unfortunately, most of the employers do not share my view. Many company
owners cannot not make distinction between a broker graduated from an university in Maritime
Management major and a person with a high-school diploma who has good command of English. That
very example illustrates what kind of a board consisted of men of vision manages our shipping sector.
Education is considered to be to most crucial factor that could be applied in breaches prevention.
Moreover, that very prevention could be stimulated by proper division of mutual responsibilities. A
broker` s employer should be responsible for: [3]
1. Broker` s payment once fixings are finalized;
2. Loss compensation. Theses loses could occur during the negotiations and a broker should receive the
respective compensations.
If an employer follows his responsibilities a broker will not be liable to undertake any steps that could
be considered as unethical. If mutual responsibilities are respected then the broker-company employer
relation will be strengthen.
In this sense, I would like to say few words about our institute named as The Institute of Chartered
Shipbrokers. It was established in 1911 in London. Over the last 100 year the Institutes aims at
enhancing brokers` professional qualities, skill and knowledge. Examinations are held all over the world
and these examinations guarantee enhancement and improvement of brokers` skills and knowledge. It
has to do much more to encourage new entrants to take the educational courses offered by the Institute
of Chartered Shipbrokers. Our Institute has a motto and it is Our Word is Our Bond and that motto
underpins entire brokers` operations.
Results
Shipbroking is a sector where brokers introduce business to people who have never seen each other.
Brokers have to take best decisions regarding ships and cargoes which are thousands kilometers away
from each other. It is a sector where transactions are realized on behalf of a given word and parties do
not meet personally at all. It is a sector where ethics and law are respected no matter how difficult it
could be sometimes. Brokers will require not only substantial knowledge and good equipment but also
they will have to be persons that could be trusted. Shipbroking is a sector that pays a great emphasis on
words given and where reputation remains the best form of regulation we have. There will always be
certain individuals that let the
profession down but they should not be allowed to cloud sterling work undertaken by most brokers.
These individuals should be isolated and it should be priority in our sector. Education should introduce
not only knowledge and skills but also ethical norms. Being professional brokers we should promote a
greater emphasis on the relationships required to maintain the level of service clients expect from
shipbrokers. It is a job that could be worked only by people with specializations and great experience.
Good and experienced brokers will enhance Turkish shipbroking image worldwide. Each employer
should know that a good broker has to have at least 4- years university education (Bachelor degree) and
not a 2- or 3-months course. Turkish Trade Maritime Management will gain success and reputation if
the Republic requires brokers to have graduated respective universities. Each party involved in shipping
sector should consider ethics as a priority. Shipbrokers, maritime education institutions, lecturers, broker
associations and other organizations that assist the trading should mobilize their efforts to keep the
ethical norms and values as trust is placed in shipbroking than ever before. It is brokers who have
graduated from universities, who have already situated themselves on the market, and who have gained
experience that will play a crucial role in the process of putting emphasis on ethical norms.