Almost four in five (78 percent) of the members surveyed by the UK’s Institute of Directors (IoD) say directors should be subject to a code of conduct.
While the body is now calling on the UK government to commission a high-level working group to develop a voluntary code of conduct for boards of directors, most of its surveyed members actually want even tighter rules.
In fact, 58 percent say a professional code of conduct should be a mandatory requirement for all UK directors.
The IoD says a string of scandals have put the spotlight on directors.
‘In the wake of the recent corporate scandals at Carillion, P&O Ferries, BHS and other significant enterprises, there is an understandable demand for business to be held more accountable to wider society,’ says Dr Roger Barker, director of policy and governance in a press statement.
‘There is a risk that each new corporate scandal or collapse will renew pressure on government to impose prescriptive regulatory obligations relating to directorship,’ he adds.
Despite more than half of its own members saying any code of conduct should be mandatory (21 percent say any code should be voluntary), the IoD says any code should avoid becoming overburdensome.
A heavily regulated regime for directors could create a ‘counterproductive focus on compliance,’ it says, arguing for a ‘business-led solution’.
‘In our view, a voluntary code – albeit one that is recognized and supported by government – would be the right way to articulate standards for directors without adding to the overall burden of business regulation,’ says Barker.