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Calls for UK Corporate Director Code of Conduct

The UK government should commission a high-level working group to draft a voluntary code of conduct for directors so they better embed the expectations of society, according to the UK-based Institute of Directors (IoD). The recommendation follows a series of corporate scandals, such as P&O Ferries sacking of 800 staff earlier this year. The proposal for a directors’ code of conduct was supported by 78% of respondents to a survey conducted last month. All UK directors would be encouraged to become code signatories, committing themselves to upholding the agreed principles. The IoD said it would be willing to “coordinate” the process. Dr Roger Barker, IoD’s Director of Policy and Governance, said: “There is a risk that each new corporate scandal or collapse will renew pressure on government to impose prescriptive regulatory obligations relating to directorship. However, a heavily regulated regime for directors runs the risk of inducing a counterproductive focus on compliance, which detracts from the capacity of boards to be strategic and innovative. In our view, a voluntary code – albeit one that is recognised and supported by government – would be the right way to articulate the standards for directors without adding to the overall burden of business regulation.” 

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