Codes of conduct are redefining leadership

An effective Code of Conduct for directors (trustees and anyone else on any type of board) can create better directors, who create better businesses, which in turn become a force for good. Your Code of Conduct isn’t just a document. It’s a contract between directors, their businesses, and the society they serve.

For years, the UK has wrestled with a stubborn problem: too many directors are promoted or selected for technical skill, not leadership skill. They know their sector, but not their duties. They understand operations, but not governance. They can run a business but not always lead one.

The Institute of Directors (IoD) published a Code of Conduct for Directors in 2024. It’s designed to help directors lead their businesses, without adding bureaucracy, by raising the bar for what it means to be a director, in a small business, on a company board, as a non-executive in the modern economy. If a good Code is taken seriously, it has the power to transform not just businesses and boardrooms, but the communities they serve. It can also transform directors by building confidence and giving assurance that their behaviours are the right ones.

I was one of the commissioners working on the IoD Code in 2024. I’ve long believed that better directors make better businesses. I also believe, having chaired boards in the third sector too, that the same applies to trustees.

Why a code of conduct matters

Most directors don’t get formal training. Many don’t fully understand their legal duties. Some don’t know what “good governance” looks like until something goes wrong. An effective Code gives directors a practical framework built around integrity, transparency, accountability, good judgement, respect for people and stakeholders, and commitment to continuous learning.

This matters because clarity creates confidence. When directors know what is expected of them, they make better decisions, ask better questions, and challenge more effectively. A Code turns “accidental directors” into intentional leaders.

How a code creates better boards

Boards fail when directors don’t speak up, groupthink takes over, conflicts of interest go unmanaged, poor behaviour goes unchallenged, information is withheld, or decisions are rushed. An effective Code tackles these weaknesses directly by embedding independence of mind, ethical decision-making, respectful debate, transparency, and a culture of continuous improvement. When directors get conduct right, boards are more diverse in thought, rigorous in oversight, and effective in strategy.

Better boards create better businesses

Businesses don’t succeed because they have the best products. They succeed because they have the best leadership behaviours. An effective Code pushes directors to put purpose at the heart of strategy, treat employees and partners fairly, build resilient supply chains, invest in skills and innovation, manage risk responsibly, and communicate honestly with customers and stakeholders. These behaviours create businesses that are more trusted, resilient, productive and attractive to investors.

Better businesses become a force for good

When directors lead well, businesses behave well, and society benefits. An effective Code encourages fair treatment of workers, responsible supply chains, environmental responsibility, community contribution, and ethical leadership. This isn’t ‘woke’. It’s smart. It builds long-term value, not short-term PR.

A code of conduct is a blueprint for the future of UK business

The UK needs higher productivity, better governance, stronger trust in business, more investment, and more inclusive growth. A good Code of Conduct is a foundation rather than a magic bullet. It gives directors the tools to lead with integrity, boards the structure to govern effectively, businesses the principles to operate responsibly. It also gives society confidence that business can be a force for good, not a source of risk.

Better directors create better boards. Better boards create better businesses. Better businesses create a better country.

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