The Directors College, Canada’s only university accredited corporate director development program, has released a code of ethics that raises the current industry standard by providing complete guidelines for behaviour in the boardroom.

All Chartered Directors graduated from The Directors College – a joint venture of The Conference Board of Canada and the Michael G. DeGroote School of Business at McMaster University – must adhere to this new ethics code to maintain their professional designation.

“This code surpasses the existing Canadian standard,” said Dr. Chris Bart, principal and lead professor at The Directors College. “It is far more comprehensive, making directors responsible for much more than just meeting the letter of the law.”

According to Dr. Bart, there are five key elements of the new ethics code that advance corporate governance excellence:

1) Invite difference and dissent on the board. The code stipulates that it is the duty and obligation of directors to debate and seek out alternative perspectives on all issues coming to the board. The days of the board rubber stamping management’s decisions are over.

2) Commit to financial reporting that is more than just compliant. It must also be fair. The code demands that directors ensure the financial reporting to shareholders truly reflects the financial state of the company and is not just an accounting game to show the best results.

3) Balance the short-term and long-term consequences of their decisions. Decisions that favour short-term gains at the expense of the long-term health of the company are no longer acceptable. Directors will now be held accountable for striking a balance.

4) Exercise independent judgement and appropriate due-diligence. It is no longer good enough to rely on the information management provides; directors must pursue aggressive discovery of the facts and engage in rigorous due-diligence in board decisions.

5) Make decisions free of personal objectives. This code makes explicit what the public thought was obvious until recent scandals showed otherwise; directors must make decisions in the best interests of the corporation and its stakeholders, not themselves.

“This new code of ethics provides concrete direction and advice for
directors,” said John Manley, former minister of finance and deputy prime
minister. “It is an invaluable guide and a major advancement for corporate
governance in Canada.”