IoD calls on governance to restore trust in business

Government and business must work together after the general Election to restore trust in how British companies are run, according to the Institute of Directors.

Publishing a manifesto paper the IoD has set out a ten-point plan and called on government to support the establishment of a Code of Conduct with ethical standards for directors and a minimum requirement of governance knowledge and skills.

The IoD has also recommended the creation of a new form of company, the Public Service Corporation for public contracts. The PSC would legally require businesses to balance the interests of shareholders with workers, the supply chain, and other stakeholders, for instance preventing them from issuing dividends while racking up pension deficits.

The IoD also advocated stronger rules around how companies report on their climate change impact, and for government to explore setting up a new wealth fund to invest in the green economy.

Head of corporate governance at the Institute of Directors, Dr Roger Barker said: “At this election, the spotlight is very much on how businesses are, and should be, run. Too often the debate around capitalism degenerates into simplistic binaries and slogans. We should be more ambitious, and explore new ways to combine the profit motive with social responsibility, to confront the challenges facing the economy, not least climate change.”

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