Britain's Institute of Directors (IoD) said on Wednesday it has launched a commission to draft a voluntary code of conduct for directors to improve standards after the collapse of builder Carillion and retailer BHS eroded trust in business.

The commission, headed by former Labour Party general secretary Iain McNicol, will run to March 2024 and report its findings a month later, the IoD said in a statement.

"Directors make key decisions across a variety of organisations, and it is essential that they are seen as both competent and ethical actors," said IoD Director General Jonathan Geldart.

Britain already has a Corporate Governance Code, currently being updated, that covers the conduct of directors and is enforced on a "comply or explain" basis by the Financial Reporting Council (FRC), which had no immediate comment on the IoD initiative.

The IoD said its code would be distinct from the FRC code or the legal duties of directors under UK companies law, which typically focus on large listed companies, rather than on individual conduct and behaviour.

"A code of conduct would, therefore, be complementary to the existing governance code framework and directors’ fiduciary requirements," said Roger Barker, IoD director of policy and governance.

IoD said board members across UK business would be asked to sign up to the code on a voluntary basis.

(Reporting by Huw Jones; Editing by Sharon Singleton)