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New Code of Conduct for Directors | A commitment towards ethical leadership
Written on 29 August 2024
In June, the Institute of Directors (IoD) launched a public consultation on a proposed voluntary Code of Conduct for Directors across all types of corporate entities. This new Code is designed to provide a clear behavioural framework and serve as a practical guide for directors, helping them make decisions that are both ethically responsible and legally compliant. By doing so, it aims to benefit both the directors themselves and the organisations they serve.
The 6 principles of director conduct
The Code is built around six key principles that outline the expected conduct for directors:
- Leading by example: Directors are encouraged to set high standards in both their personal conduct and decision-making, acting as role models within their organisations.
- Integrity: This principle emphasises the importance of honesty, ethical values, and always doing the right thing.
- Transparency: Directors should communicate and make decisions in an open, honest, and clear manner.
- Accountability: Taking personal responsibility for actions and their consequences is a core tenet of this Code.
- Fairness: Treating all individuals equitably, without discrimination or bias, is a fundamental expectation.
- Responsible business: Directors are urged to integrate ethical and sustainable practices into their business decisions, considering the broader societal and environmental impacts.
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Industry feedback on the proposed Code
The IoD’s initiative has sparked considerable discussion within the business community. Among those contributing to the consultation were Sarah Dillon, Director of Legal and ER Advisory at WorkNest sister company esphr, and Vicky Roberts, Director and Head of Learning at Vista Employer Services, another WorkNest sister company. Both shared their support for the Code.
Sarah Dillon Director of Legal and ER Advisory at esphr, highlighted the inclusivity of the Code, stating, “This Code will not only support experienced directors in making key decisions and handling difficult or complex matters but it will also assist those with limited experience by encouraging them to consider multiple perspectives and helping to embed key values and attributes of a director. By enhancing the quality of directors’ leadership, the Code is likely to have a positive impact on employees’ livelihoods and well-being.”
Vicky Roberts echoed these sentiments, adding, “A Code such as this will provide directors with a framework to focus their development as leaders of the organisation and the talent within it. It will also give boards another opportunity to hold themselves and each other accountable for modelling behaviours expected of their workforce. It seems to me that much of the draft Code will align easily to organisations’ values, making it another useful tool for demonstrating their ESG credentials and serving as a ‘North Star’ for doing the right thing.”
Katie Muncaster, Chief People Officer at WorkNest, added: “This initiative is a major step towards ensuring that leaders embody the highest standards of ethics and responsibility in every decision they make. The Code covers crucial pillars such as leading by example, integrity, transparency, accountability, fairness, and responsible business practices.
“As the CPO of WorkNest, I wholeheartedly support this move – it’s not just about compliance but setting a gold standard for ethical leadership that benefits both our people and our planet. The Code aligns to our Company Values of Integrity, Excellence, Teamwork and Inclusion and therefore will help to set the bar and promote these intrinsic behaviours both internally as well as externally for our clients.”
Looking ahead
The IoD’s proposed Code of Conduct represents a further step towards promoting ethical leadership within corporate entities. By setting out clear principles for directors to follow, it has the potential to enhance decision-making, improve governance, and ultimately create a more responsible and sustainable business environment. As the consultation progresses, it will be interesting to see how the business community continues to engage with and shape this important initiative.
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