Why ethical leadership is your board of directors’ best defense

Ethical lapses don’t happen in isolation—they can signal deeper failures of governance, culture, and oversight. When integrity is compromised, an organization can face significant consequences, including reputational damage, regulatory scrutiny, monetary penalties, lost market share, diminished stock prices, and more. By strengthening oversight of ethical leadership, the board of directors not only can help mitigate risks but also can uphold integrity across the organization—safeguarding its brand and reputation.

Ethical leadership pairs tone at the top with practices that embed ethical values, integrity, and conduct throughout an organization. However, the latter can be a challenge. Building an ethical corporate culture requires proactive strategies that enable the board of directors to identify and address cultural and ethical risks early, rather than relying solely on reactive measures. 

To that end, the board of directors can hold executive management accountable for maintaining ethical cultures within their organizations by considering Deloitte’s four elements of ethical leadership: Expression, Engagement, Empowerment, and Evaluation (or in simpler terms, the four E’s).