The UK-based Institute of Directors (IoD) has launched a consultation on its first voluntary code of conduct for company directors. The IoD said the code would serve as a practical tool to help directors make “better decisions”, also providing a “behavioural framework” to help firms build and maintain trust among stakeholders. The code is based on six principles of director conduct, comprising: leading by example, integrity, transparency, accountability, fairness, and responsible business, which it defines as “integrating ethical and sustainable practices into business decisions, taking into account societal and environmental impacts”. It was developed for the IoD by a commission chaired by Lord McNicol of West Kilbride, a former general secretary of the Labour Party and senior officer of the GMB union. IoD Director General Jonathan Geldart said recent corporate scandals – including at the Post Office, Carillion and BHS – has seen business leaders fall short of society’s expectations, exerting a negative effect on perceptions. “The purpose of this code is to help UK business win back public trust by embedding the ethics and values that are already adopted as a matter of course by most responsible business leaders,” he said. Revisions to the UK Corporate Governance Code were finalised in January by the Financial Reporting Council, which emphasised the need to promote growth and competition, while also enhancing transparency and accountability.
