A Hippocratic Oath For Company Directors?

SanLu Chairwoman Tian Wenhua was sentenced last week to life in a Chinese prison, and two of her suppliers were sentenced to death for their part in melamine contamination cases. According to the China Daily, Tian “was convicted for her failure to stop producing and selling milk products even after she was informed that they were contaminated. She was fined about 25 million yuan ($3.7 million), too.”

Governance specialists are fond of talking about how a Director’s primary responsibility is to act in the best interests of the company (as per Section 131 of the Companies Act), and it goes without saying that a Director must not break any laws while exercising their responsibility.

But I’m left wondering if it might not be prudent to be more specific in the Companies Act about the company’s relationship to its consumers and the general public.

In any case, it would be good for Company Directors to specifically acknowledge their responsibilities as they enter a take up their appointments.

How about a Hippocratic Oath for Company Directors?

In the exercise of my duties as a Company Director:

I will not deliberately harm our shareholders, other directors, company staff, our suppliers, customers, end-users, or members of the public.

I will always act within the law, and ensure that the company acts within the law. Where I am unsure of the law, I will seek professional advice.

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I will act in the best interests of the company, and strive to make the company as successful as possible in achieving the strategy that is collectively set by the Board.

I will not seek to derive unfair personal gain from any transactions with the company or its personnel.

I will communicate clearly in a respectful and professional manner with my colleagues, being diligent and timely in my record keeping and reporting.

I will model behaviour as a Director that I would expect from any company personnel.

I will not betray the confidentiality of information that has been properly given to me in confidence, nor will I seek personal gain from such information. Likewise, I will disclose without hesitation any information that that is required to be made available to government agencies, other directors, stakeholders, or the general public.

Dave Moskovitz is a Company Director specialising in start-up governance. He's chairman of WebFund Limited, and blogs at http://nzangels.com/

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