The IoD said that businesses should "rightly be held accountable for its actions", and the government should use the Queen's Speech to amend criminal law to provide punishment where a company has acted recklessly.
IoD director general George Cox said, "The IoD has been calling for corporate manslaughter legislation for a number of years, not because we want to see a proliferation of legislation, but because the state of the law on this issue is unsatisfactory."
"The law requires the identification of a 'controlling mind'," he said. "In large companies in particular, trying to pin down a nominated individual is too difficult."
The list of legislation called for by the IoD includes a skills bill, which would give free education for any adult seeking their first Level 2 qualification.