New voluntary code of conduct for directors launched

The Institute of Directors yesterday launched a code of conduct for directors, providing a behavioural framework for directors, whether of UK companies or not, based on the following six principles:

1. Leading by example
2. Integrity
3. Transparency
4. Accountability
5. Fairness
6. Responsible business

The code is voluntary, and there is no formal enforcement mechanism associated with it, but it purports to set a bar for director conduct beyond the baseline under the Companies Act and the common law.  The IoD encourages companies to publicly commit to compliance with the code by, for example, making disclosures in annual accounts / on the company's website etc. 

The code is relevant for directors of companies of all sizes, from publicly-listed entities to small private companies, whether acting as an executive or a non-executive director. 

It is therefore a useful guide for any director, and will be particularly relevant for any person who has just been appointed as a director for the first time (e.g. a founder). It also could form part of a pack of materials given by companies to new directors when they join the board, to remind them of the importance of good corporate governance.