In an attempt to raise personal and corporate ethical standards, the IoD has devised its own code of professional ethics to which it will expect its 54,000 members to adhere. The code goes further than any existing code of professional conduct, focusing on personal responsibility towards employees, customers, suppliers and the wider community.
The new code will be unveiled by Tim Melville-Ross, director general of the IoD, at a three-day conference in Newcastle later this month. It is topically titled "Social and Spiritual Regeneration: New Challenges for the Millennium".
In the past decade, the number of businesses adopting standard codes of practice has risen steeply. According to the Institute of Business Ethics, the reason is simple: many people today have no other ethics by which to live their lives.
"Companies have to have codes because they can't rely on their new recruits to know right from wrong," said Roderick Chamberlain, chairman of the IBE. "Directors used to be able to rely on the family, the school or the church to teach the most basic moral values, but that isn't the case anymore."
In 1987 only 18 per cent of large UK companies were known to have codes of business ethics, but by 1997, that figure had trebled to 57 per cent. The IBE's 1998 report shows that 271 of the UK's 500 largest companies now have a code. Mr Chamberlain said that directors believe codes make good business sense - because employees can't be relied upon to make basic moral judgements. "There is hard evidence that companies have good reasons as well as slightly cynical reasons for having codes," he said.
Among the IoD's "commandments" is the sixth, which proposes that a director must "at all times have a duty to respect the truth and act honestly in his business dealings and in the exercise of all his responsibilities as a director". The fifth reads: "Comply with relevant laws, regulations and codes of practice, refrain from anti-competitive practices, and honour obligations and commitments." And the seventh: "Avoid conflict between his personal interests, or the interests of any associated company or person, and his duties to the company."
"Businesses' values shouldn't be any different from anybody else's values," said Mr Melville-Ross. "Our own code is personalised. It requires - or recommends - good personal behaviour. Members of the IoD will be asked to commit to it. At present we don't require any particular code of behaviour to be adhered to by our members."
Besides creating jobs and generating tax revenue, said Mr Melville-Ross, business "is also, through the operation of a competitive market place, about choice, which in a philosophical sense is one of the foundations of the freedom that we value so much. Business is also about being fair, stimulating, fulfilling and fun".Reuse content