It is easy to become cynical about business practices and the conduct of directors, especially when high profile cases such as the recent BHS case on wrongful trading and misfeasance dominate the headlines. But the vast majority of directors take their duties and responsibilities seriously. In order to help them do their job, directors may be interested in the new Code of Conduct for Directors, published by the Institute of Directors. It is intended for anyone fulfilling such a role, in the private, public and not-for profit sectors, and boards are encouraged to publicly commit to the Code (for example, by disclosure in annual reports and on websites). It provides a practical tool to help directors make better decisions. It highlights:
- Six key principles of director conduct, which are leading by example, integrity, transparency, accountability, fairness and responsible business; and
- a number of undertakings underpinning each principle such as making justifiable decisions based on impartiality, consistency and merit, and aiming for long-term sustainable business success considering social and environmental impacts which in turn should lead to optimal outcomes.
The Code is voluntary and there is no formal enforcement mechanism, but it is written by directors for directors and hopefully offers a steer that can help directors navigate the pressures and challenges of day to day decision-making.
