Institute of Directors New Voluntary Code of Conduct for Directors

The Institute of Directors ("IoD"), an organization representing UK company directors, published in October 2024 a voluntary Code of Conduct ("Code") for directors of companies. This followed a public consultation in June 2024.

The IoD states the purpose of the Code is "to help UK business win back that trust by embedding the 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."

The Code is intended to apply to directors of UK companies of all sizes in the private, public and not-for-profit sectors. It is, however, a voluntary commitment designed to complement other codes of conducts which directors may be subject to by their organizations and/or professional bodies.

The Code is structured around six key Principles of Director Conduct ("Principles"). These Principles are inspired by the Seven Principles of Public Life (formerly known as the Nolan Principles), first published in 1995 by the Committee on Standards in Public Life.

The Principles:[1]

1. Leading by example: Demonstrating exemplary standards of behaviour in personal conduct and decision-making.
2. Integrity: Acting with honesty, adhering to strong ethical values, and doing the right thing.
3. Transparency: Communicating, acting and making decisions openly, honestly and clearly.
4. Accountability: Taking personal responsibility for actions and their consequences.
5. Fairness: Treating people equitably, without discrimination or bias.
6. Responsible business: Integrating ethical and sustainable practices into business decisions, taking into account societal and environmental impacts.

Each Principle is underpinned by a number of specific undertakings. By applying the Principles and fulfilling the Undertakings, directors are well placed to achieve the positive Outcomes set out in the table below extracted from the Code:

[2]

Although the Code is directed at individual directors, boards are also encouraged to publicly commit to the Code and the IoD has developed a kitemark that can be used to publicly signify commitment to the Code.

Access the Institute of Directors' new Code of Conduct for Directors here.

[1] https://www.iod.com/resources/iod-code-of-conduct-for-directors/

[2] https://www.iod.com/app/uploads/2024/10/IoD-Code-of-Conduct-for-Directors-October-2024-2e4b026b2f68b2fbf260714c1e08afd3.pdf