IoD launches Code of Conduct to help directors make better decisions
The Institute of Directors has today launched its Code of Conduct for Directors, a practical tool to help directors make better decisions. It also provides organisational leaders with a behavioural framework that can help them build and maintain the trust of the wider public in their business activities.
The Code will help directors navigate the complex trade-offs that they deal with every day. And it will support them in becoming respected leaders who do the right thing for their organisations.
The Code represents a voluntary commitment and is not intended to hold back directors or create a new burden of compliance. It is structured around six key ‘Principles of Director Conduct’:
- Leading by Example – demonstrating exemplary standards of behaviour in personal conduct and decision-making.
- Integrity – acting with honesty, adhering to strong ethical values, and doing the right thing.
- Transparency – communicating, acting and making decisions openly, honestly and clearly.
- Accountability – taking personal responsibility for actions and their consequences.
- Fairness – treating people equitably, without discrimination or bias.
- Responsible Business – integrating ethical and sustainable practices into business decisions, taking into account societal and environmental impacts.
The Code of Conduct was developed for the IoD by a Commission under the chairmanship of Lord McNicol of West Kilbride, and was published with the support of BDO. It was subject to an extensive public consultation exercise, with the Code receiving strong endorsement from the overwhelming majority of respondents.
The Code is being launched today at an IoD event, Business as a force for good and growth, which will include a keynote speech from Justin Madders MP, Minister for Employment Rights, Competition and Markets.
Jonathan Geldart, Director General of the Institute of Directors, said:
“We should be proud of UK businesses, but sometimes decision-makers fall short of societal expectations. Those at the top may lose touch with the need for exemplary values and integrity in their decisions and behaviours. This has led to scandals and controversies, negatively affecting business esteem. Without public trust, businesses may find their freedom increasingly questioned.
“This Code aims to help UK business regain trust by embedding values already adopted by most responsible leaders. Written by directors for directors, it offers a roadmap to help them make the right decisions amid complex challenges and trade-offs.”
Commenting on the publication, Lord McNicol said:
“This new Directors Code of Conduct provides valuable guidance and assistance to both new and experienced directors. Working jointly with the IoD and an expert panel, we have developed high level principles and practical suggestions across, integrity, accountability and business leadership. Raising standards and leading by example is incredibly good for business.”
Ian Bennington, Head of Governance, Risk and Compliance at BDO, said:
“BDO is proud to have supported the IoD on the development of its first voluntary code of conduct for directors. Encouraging individual directors to assess and reflect on their own roles and behaviours should help embed ethical and responsible decision-making in UK boardrooms and drive-up standards across the board.”
Dr. Roger Barker, Director of Policy and Corporate Governance at the IoD, said:
“The Code is a voluntary source of guidance for directors. There is no formal enforcement mechanism associated with the Code. However, organisations and their stakeholders may choose to use the Code to guide their own assessment of director actions and behaviour.
“Directors and boards are encouraged to publicly commit to the Code. Possible mechanisms may include disclosure in annual reports and on websites; communication to employees and other stakeholders; and through social media.”
The Institute of Directors’ Code of Conduct for Directors can be downloaded here.
