We formulate equations governing flows of suspensions of rod-like particles. Such suspensions include linear polymer solutions, FD-virus, and worm-like micelles. To take into account the particles that form and their rotation, we treat the suspension as a Cosserat continuum and apply the theory of micropolar fluids. Anisotropy of suspensions is determined through the inclusion of the microinertia tensor in the rheological constitutive equations. We check that the model is consistent with the basic principles of thermodynamics. In addition to anisotropy, the theory also captures gradient banding instability, coexistence of isotropic and nematic phases, sustained temporal oscillations of macroscopic viscosity, shear thinning and hysteresis. For the flow between two planes, we also establish that the total flow rate depends not only on the pressure gradient, but on the history of its variation as well.