On 23 October 2024, the Institute of Directors launched its voluntary Code of Conduct for Directors (IoD Press Release). The Code is intended as a practical tool to help directors fulfil their responsibilities by providing a clearly articulated statement of what good conduct looks like. It is directed at individual directors of organisations of all sizes in the private, public and not-for-profit sectors, although boards are encouraged to publicly commit to the Code. The IoD consulted earlier this year on a draft version of the Code, which was developed by a specially formed Commission chaired by Lord McNicol (see FC Feature 6 June 2024).
The Code is structured around the six high-level 'Principles of Director Conduct' set out below.
- Leading by example – demonstrating 'exemplary' standards of behaviour in personal conduct and decision-making.
- Integrity – acting with honesty and adhering to strong ethical values.
- Transparency – being open and honest in communications and decision-making.
- Accountability – taking 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.
Each Principle is underpinned by specific 'Undertakings', with the intention being that if directors apply the Principles and fulfil the Undertakings, it should lead to positive outcomes for both directors and their organisations.
The IoD plans to update the Code periodically and will develop guidance on applying the Code in various circumstances.
First published on the Employment News Service on 23 October 2024.
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