The Institute of Directors (IoD) is developing a new code of conduct in the wake of the collapse of Carillion and other corporate scandals.
The body of councilors members marked the conclusions of research by public relations consultancy Edelmanwhich suggests that confidence in UK business is lower than in many other countries.
The IoD has formed a commission chaired by Lord (Iain) McNicol of West Kilbride and 16 more experts to develop the code.
Members have been drawn mostly from legal, financial and regulatory backgrounds. The panel includes Baroness Margaret Ford, who is a senior adviser at Lendlease and chair of the NewRiver Real Estate Investment Trust.
The commission will continue until March 2024 and will report its findings the following month.
IoD chief executive Jonathan Geldart said: “The ultimate responsibility for restoring society’s trust in business rests with boards. Directors make key decisions across a range of organizations , and it is essential that they are seen as competent and ethical actors.
“While a code of conduct for directors is not a silver bullet, it is an essential starting point. It will allow directors to reaffirm their commitment to high standards of behavior that reflect evolving societal expectations.”
Carillion, the UK’s second largest contractor at the time of its collapse in 2018, was the UK’s biggest business failure, collapsing with liabilities worth £7bn.
Former CEO Richard Howsonand financial directors Richard Adam i Zafar Khanaccepted disqualifications from being company directors earlier this year.
The Insolvency Service found them liable for a variety of breaches between them, including making misleading statements about the contractor’s financial performance.
Announcing the new commission, the IoD cited BHS, Patisserie Valerie, P&O Ferries and the Post Office as other “corporate scandals”.
All the cases “suggest that business conduct does not always meet the standards expected by society,” it said in a statement on Oct. 26.
James Wates, the Wates Chair in 2018, was appointed by the Government that year to chair a intercompany group on corporate governancewhich gave rise to a new set of principles to be followed by large private companies.
