The Institute of Directors in the UK has recently published a consultation document on a Code of Conduct for Directors; a practical tool to help directors make better decisions. It also will provide leaders with a behavioural framework to help them build and maintain trust in their business activities.
The Code is a voluntary commitment and 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.
Jonathan Geldart, Director General of the Institute of Directors said:
"We can be rightly proud of UK business organisations much of the time. However, on occasion, business decision makers fall short of what society expects. Those at the top may lose touch with what really matters – namely the need to demonstrate exemplary values and integrity in both their business decisions and their personal behaviours. As a result, we have in recent years observed corporate scandals – including at the Post Office, Carillion, and BHS – which have exerted a negative effect on the esteem in which business leadership is held.
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. Written by directors for directors, it offers a roadmap that can help individual directors make the right decisions for themselves and their organisations often in the face of complex challenges and trade-offs.”
In terms of the accounting profession, the IOD Code of Conduct is of interest to accountants because it supports their ethical and professional development, ensures regulatory compliance, helps in effective decision-making, and enhances stakeholder confidence. By adhering to such a code, accountants can uphold the integrity of their profession and contribute positively to their organisations and society.
The Institute of Directors is seeking views on the Code of Conduct from the business community and the general public by Friday 16 August 2024.
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