UK institute pushes ethical code after corporate scandals

Carillion

19/06/2022 22:30

By Huw Jones
    LONDON, June 19 (Reuters) - Britain's company directors
should sign up to a code of conduct to improve behaviour in
boardrooms after high-profile corporate collapses, such as
builder Carillion and retailer BHS, an industry body proposed on
Sunday.
    The Institute of Directors, which has about 20,000 members,
proposed a voluntary nine-point code covering ethics, diversity,
competence and lawfulness. It would also include a commitment to
cut a company's carbon footprint in reasonable time.
    The plan would supplement the existing corporate governance
code administered by regulator, the Financial Reporting Council
(FRC), and general legal duties under UK company law.
    "There is a risk that each new corporate scandal or collapse
will renew pressure on government to impose prescriptive
regulatory obligations relating to directorship," said Roger
Barker, the IoD's director of policy and governance.
    "The IoD’s members are strongly supportive of the
introduction of a code of conduct for directors – either on a
mandatory or voluntary basis."
    The IoD has asked the business ministry and FRC to support
the development of the code.
    Following the collapse of Carillion, the FRC is planning to
strengthen its own corporate governance code to make directors
more accountable for financial statements, modelled on the U.S.
Sarbanes-Oxley rules.  urn:newsml:reuters.com:*:nL8N2Y34Y3
    The IoD said all company directors should sign up to its
proposed code, which would be administered by industry rather
than a regulator or government.
    Directors should agree to submit to any accountability
processes associated with the code and signatories could be
listed on a register, the IoD proposed.
    "A whistleblowing process could be established to allow the
reporting of poor conduct. An appropriate investigations and
sanctions process would also need to be defined," the IoD said.
    

 (Reporting by Huw Jones; Editing by Edmund Blair)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
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