Why Boards Can't Outsource Ethics
I finished the Australian Institute of Company Directors' Ethics in the Boardroom certification this week, and it's had me thinking about a question that doesn't get asked enough in governance conversations: whose job is it, really, to keep a company honest about what it says it stands for?
The instinct in most organizations is to hand that question to someone else. Legal owns compliance. HR owns culture. The audit committee owns risk. Somewhere in that division of labor, ethics becomes everyone's job in theory and no one's job in practice. It gets folded into a code of conduct that people sign once during onboarding and never think about again.
That's a mistake, and it's one boards are especially prone to making.
Fiduciary duty was never just financial
There's a version of board oversight that treats the job as basically financial: watch the numbers, approve the budget, ask hard questions about the strategy, sign off on the audit. Ethics shows up as a line item, usually as a report from the compliance officer, usually near the end of the meeting when everyone's already checked out.
That framing misses something. A board's duty of care and duty of loyalty were never meant to stop at the balance sheet. They extend to the decisions that shape whether a company actually behaves like the organization it claims to be, especially when behaving that way is inconvenient or expensive. Financial oversight tells you whether a company is solvent. It doesn't tell you whether the way it got there is something the company can stand behind.
That's where the board and the CEO share something no one else in the organization does: the standing to ask "should we" and not just "can we," and the authority to make that question stick.
The hard part isn't knowing right from wrong
Most ethical failures I've read about, and most I've seen up close, weren't cases where anyone sat down and decided to do something wrong. They were cases where a series of individually defensible decisions added up to something the organization wouldn't have chosen if it had looked at the whole picture at once. A sales target that quietly incentivizes corner-cutting. A vendor relationship that's technically arm's length but practically isn't. A culture where raising a concern reads as not being a team player.
Why this is a board-level problem, not a department-level one
A compliance team can catch violations. It's much worse at catching drift, the slow accumulation of decisions that never break a rule but gradually pull an organization away from what it says its mission is. Drift is invisible from inside a department because each individual decision looks reasonable in isolation. It's only visible from a vantage point that sees the whole organization over time, which is exactly the vantage point a board has and an operating team usually doesn't.
That's the case for why this sits with the board and the CEO specifically. Not because they're better people than anyone else in the company, but because they're the only ones positioned to see the pattern and the only ones with the authority to correct it before it becomes the culture.
It also means the board has to actually understand the ethical pressure points specific to its own industry and business model, not a generic list of governance best practices. A fintech board and a healthcare board are watching for different things. The pressures that show up in a high-growth company chasing a fundraise look different from the ones in a mature company managing a legacy workforce. Generic ethics training doesn't prepare you for that. Understanding your own company's actual risk surface does.
Where I've landed
Certifications like this one are useful less for the credential and more for the forced slow-down. Sitting with case studies, arguing through frameworks, being asked to defend a position instead of just having an opinion about it, that's the part that sticks. I came out of it more convinced that ethical oversight isn't a subset of governance. It's close to the whole point of it. The financial oversight exists to protect the thing worth protecting, which is an organization that does what it says it does, for reasons it's willing to defend in the open.
That's the standard I'm holding myself to at the board table going forward. Reach out to me to discuss further.
The Profit Problem: Why "More" Isn't a Strategy
I listened to a podcast this week that reframed something a lot of us take for granted: the idea that maximizing profit is the goal of a business. The conversation, episode 272 of Patrick Lencioni's At the Table, made a distinction that sounds obvious once you hear it, and yet most leaders were never actually taught to make it: profit is an indicator that an organization is succeeding. It is not the reason the organization exists.
I've spent two decades doing ethics and leadership work, mostly in healthcare but also with government agencies, higher education, and private businesses. And I'll tell you, this confusion shows up everywhere, just wearing different clothes. A hospital talks about mission and community benefit. A county agency talks about public trust. A business talks about growth. But when a hard decision comes down to the wire, the question underneath it is almost always the same: is the number a signal we're doing our job well, or has the number quietly become the job itself? That distinction is worth slowing down on, because most organizations cross the line without ever deciding to.
A Signal, Not a Destination
A fever tells you something is happening in the body. It's useful information. No physician treats "get the temperature as high as possible" as a goal, because the fever isn't the point. It's a signal pointing at something else, something that actually matters.
Profit works the same way. It tells you the organization is creating something people are willing to pay for, that operations are sound, that the model holds up. That's real information, and leaders should pay attention to it. But the moment profit stops being a signal and becomes the target itself, something subtle happens: people start optimizing the number instead of the thing the number was supposed to be measuring. And an organization can do that for a long time before anyone notices what's been lost.
How the Shift Actually Happens
I don't think most leaders wake up one day and decide profit is the point. It happens gradually, usually through a series of individually reasonable decisions.
A county office trims a service that helped a small number of residents because it doesn't move the budget needle. A hospital system quietly lets throughput targets shape clinical scheduling in ways that were never explicitly approved. A family-owned business takes private equity money, and within eighteen months the founder doesn't recognize the place anymore. None of these are villain moments. Each decision, in isolation, had a defensible rationale. But add them up over a few years and an organization can drift a long way from what it originally set out to do, without a single meeting where anyone said "let's make profit the goal now." That's what makes this hard to catch. It's not a decision. It's an accumulation.
Three Questions Worth Asking Yourself
Instead of a checklist of symptoms, I'd rather offer three questions. If you're a leader, sit with these honestly.
When was the last time you made a decision that cost you money on purpose, because it was the right thing to do? Not a PR move. Not something with an ROI story attached. A genuine choice to absorb a cost because it served people, even though it didn't serve the number. If you can't think of one recently, that's worth noticing.
Do the people you serve, whether patients, customers, or constituents, experience your organization as something trying to help them, or something trying to extract from them? You already know the answer if you're honest. The people on the receiving end usually figure this out before your dashboards do.
If someone asked your employees why the organization exists, would they describe a purpose, or would they describe a number? This is the sharpest test I know. An organization that has lost the plot usually has employees who can recite the revenue target with more confidence than they can recite the mission.
Say the Quiet Part Out Loud
Here's a point I don't think gets made often enough: having profit as a genuine core value isn't automatically a problem. Some organizations exist primarily to generate a return for their owners, and there's nothing dishonest about that as a stated purpose. The dishonesty shows up when an organization claims to be values-driven, plural, but when it actually comes down to a hard tradeoff, only one value ever wins the tiebreaker. I've sat in enough boardrooms and leadership retreats to tell you that people can feel this gap even when nobody names it. It shows up as cynicism, disengagement, and a quiet sense that the mission statement on the wall is decoration.
If profit is genuinely the reason your organization exists, say so, clearly, to your employees and the people you serve. Let them decide, with full information, whether that's an organization they want to be part of. What erodes trust isn't the presence of a profit motive. It's the gap between the values on the wall and the values in the decision.
The Harder, Better Question
None of this is an argument against making money. Profit is necessary. It funds the mission. It protects the people who depend on the organization when conditions get hard. It buys the freedom to make good long-term decisions instead of desperate short-term ones. An organization that can't sustain itself financially can't help anyone for very long, and I have real empathy for leaders fighting just to keep the lights on. That's a different conversation entirely.
But for organizations past that point, there's a real difference between a leader who asks "how do we maximize this number" and one who asks "how much is enough, and where do we invest the rest." The first question has an easy, mechanical answer: more. The second question is harder, and it requires actually knowing what you're building the organization toward, then having the discipline to keep asking it even in the years when the number could technically go higher. That second question is the one worth sitting with, whether you're leading a health system, a government agency, a business, or a team of three people trying to do good work together. Growth isn't the enemy. Losing track of what the growth is for is.
This is the kind of tension I spend most of my time helping leaders and organizations work through: clarifying purpose, building the frameworks that keep values operational instead of decorative, and helping teams make the hard tradeoffs before a crisis forces the issue. If your organization is wrestling with this, I'd welcome the conversation. Feel free to reach out.
You can listen to the full podcast conversation that sparked this piece on At the Table with Patrick Lencioni, episode 272.
When Loyalty and Integrity Part Ways: What Dr. Houry's Story Teaches Us About Ethical Leadership
I want to share with you all a piece I read recently, that truly resonated with me.
Dr. Debra Houry, former Chief Medical Officer at the CDC, wrote a blog post called "When Work Is Interrupted: Finding Purpose Beyond a Title." In it, she describes her final year at the agency, when she was the only career leader left standing in the Office of the Director. She watched colleagues lose jobs they had built their entire careers around. She watched programs disappear that had taken years to stand up. She had to sit with the fact that recommendations coming out of an agency she loved no longer reflected the science behind it.
I have a personal connection to this one. I worked with Dr. Houry years ago at Grady Health System, and my wife knew her through her research in injury prevention and intervention. Reading her account, I wasn't surprised by any of it. It's exactly who she is. But I want to talk about why this piece matters beyond the personal connection, because I think it says something important about ethical leadership that most of us don't talk about honestly enough.
The gap between loyalty and integrity
Dr. Houry writes that she felt deeply loyal to CDC, to the people there, and to the mission of protecting public health. That loyalty is what kept her there as long as it did. But at some point she had to reckon with the fact that loyalty and integrity aren't always the same thing.
That distinction does a lot of work, and most leaders never sit with it long enough to feel its weight. We're trained to think of loyalty as a virtue on its own. Stay. Be a team player. Don't abandon ship. Most of the time that instinct serves people well. But there's a version of loyalty that becomes a way of avoiding a harder question: can I still serve the mission from here, or has my ability to do that fundamentally changed?
This is where my own thinking about ethical leadership comes in. I've spent a lot of years working with the idea that ethical leadership rests on two separate but connected things: who you are as a moral person, and how you act as a moral manager. The moral person side is about humility, honesty, integrity, fairness, and genuine care for others. The moral manager side is about what an organization actually does: whether it sets clear ethical expectations, uses the right incentives, makes decisions that reflect its stated values, i.e., practice ethical decision-making, and treats ethics as a real priority rather than a talking point.
Dr. Houry's story is a case study in what happens when those two things pull apart. She could still be a moral person inside an institution that was no longer functioning as one. Her personal integrity stayed intact. But the system around her had stopped reflecting the values she'd built her career on. At that point, staying doesn't automatically make you loyal. Sometimes it just makes you complicit in something you no longer believe in. Her story shows something worth sitting with: a person can hold onto every bit of their own integrity and still end up in an institution where the moral manager function has quietly broken down. No amount of personal virtue fixes that from the inside.
That's an uncomfortable thing to sit with, especially for people who have spent decades inside one institution. I don't think Dr. Houry makes the decision to leave sound easy, and she shouldn't. It wasn't. But she's honest about the fact that leaving was, in her words, an attempt to remain faithful to the mission rather than a retreat from it.
Grief that doesn't come with a name
The part of her piece that I think gets overlooked is what she describes after the decision was made. She talks about applying the same triage instinct she learned as an emergency physician: figure out fast what matters most. But she's honest that even with that skill, she still had to grieve something that didn't have an obvious name. Her title was gone. Her role was gone. But what she'd actually lost, and what she had to slowly figure out she hadn't lost, were two different things.
I think a lot of people who go through professional disruption, whether by choice or not, get stuck here. They know intellectually that their values and relationships and skills are still theirs. But the felt experience of loss doesn't care about that logic. It takes time to separate what actually left from what only felt like it left.
Her answer wasn't to rush toward the next title. She gave herself permission to sit in what she calls the gray space between chapters, asking what work brings her purpose, where she can have the most impact, what actually brings her joy. Those aren't small questions, and she didn't pretend to have quick answers to them.
Why this matters for the rest of us
You don't have to be a CDC leader living through institutional upheaval to feel the pull between loyalty and integrity. It shows up in smaller, quieter versions all the time: the meeting where you go along with something you don't believe in because leaving feels disloyal, the year you stay in a role past the point it still fits because walking away feels like quitting on people who need you.
This piece is a reminder that ethical leadership isn't about never facing that tension. It's about being honest when you feel it, and being willing to ask the harder question instead of settling for the comfortable one. Integrity, as she puts it, can be the compass when everything else about the path ahead is unclear.
That's a lesson worth carrying with you, whether you're leading an agency of thousands or just trying to figure out your own next chapter.
The Gap Nobody's Closing: Ethical Leadership in Business
There's a number in a recent report from the HOW Institute that is astounding: 94% of employees say ethical leadership is more urgent than ever. Only 6% of CEOs consistently demonstrate it. That's not a new gap. It hasn't closed in years. And the fact that we keep measuring it without moving it tells you something important about how organizations actually operate versus how they say they operate.
The report, The State of Moral Leadership in Business, uses the language of "moral leadership." I work from an ethical leadership framework, and while the terminology differs, the concepts largely overlap. So I'll use my language here, but the data apply either way. One thing the report gets right is how it defines ethical leadership: not as a personality type, not as a title, but as a practice. A set of behaviors you either do repeatedly or you don't. That framing matters because it moves the conversation away from character as a fixed trait and toward conduct as a choice. Leaders aren't born ethical. They either build the habits of ethical leadership or they don't.
The report also makes a strong empirical case for why it matters and not just in the feel-good sense. Organizations with leaders who excel on ethical dimensions are more resilient, report higher customer satisfaction, experience lower turnover, and are better positioned for growth. These aren't soft outcomes. They're the kind of results boards and executives spend enormous resources chasing through other means. The most important date point perhaps is this: employees who work for ethical leaders are 20 times more likely to say their organization encourages them to try new ideas. Twenty times. That's not a marginal edge. That's a different organizational culture entirely.
What produces that kind of result? Psychological safety. Ethical leaders create environments where people can take risks, make mistakes, and surface problems without fear of punishment or humiliation. That doesn't mean accountability disappears. It means accountability is aimed at the right things, e.g., behavior, impact, learning, and doing better, rather than at blame and retribution. When people are afraid to fail, they stop trying. They stop surfacing problems early. They stop telling the truth to leadership. You end up with an organization that looks compliant on the outside and is quietly dysfunctional underneath. Most senior leaders I talk to know this dynamic exists. Far fewer have done the hard work of dismantling it.
Ethical leadership isn't about being liked or being soft. It's about creating conditions where people can actually do their best work and where the organization can function honestly rather than performatively. I don't agree with every element of the HOW Institute's model, and no framework captures the full complexity of what ethical leadership looks like in practice. But the core finding is hard to argue with: the gap between what employees need from their leaders and what they're actually getting is wide, it's persistent, and it's costing organizations more than they realize.
If you want to dig into the data yourself, the report is worth your time: The State of Moral Leadership in Business
Return to Work Mandates: Good Idea or Power Play
I spoke with a friend working in the banking industry this past week about a frustration he was facing. His company had just issued a return to office(RTO) mandate (all team members), and he was caught in the middle, trying to honor the directive from above while holding onto the trust he'd built with his team over three years. "I know this isn't about productivity," he told me. "We've had our best numbers working hybrid. But I'm being told to enforce it anyway. How do I do that without becoming someone my team no longer respects?" That's an ethics question at its core.
I thought about that conversation when I came across two pieces of research that, taken together, tell a pretty clear story. The first examined RTO mandates across S&P 500 firms. The companies most likely to mandate a return weren't the ones with declining earnings, they were the ones with declining stock prices. What happened: Employee satisfaction dropped measurably and firm performance didn't improve.
The second is a study I first heard Adam Grant reference. Researchers found that groups solving complex problems performed best under intermittent social connection, periodic separation followed by reconnection. Constant interaction pushed groups toward conformity and premature agreement. The best solutions came from people who had time to think independently before coming back together. Always together may actually undermine the quality of collective work, not enhance it.
Two takeaways for me: (1) before we make a decision we should look at the data. RTO mandates don't appear to work. Innovation and productivity don't require us being together all the time. (2) An inference that Adam Grant noted, those team members who are the high performers will leave when the work setting doesn't match a high functioning environment. Hence, leaving the lower performers behind. How does an ethical leader respond. They're honest about what they know and don't know. They extend trust before demanding compliance. And when they're caught between institutional pressure and the wellbeing of their team, they at least name that tension out loud rather than pretending it doesn't exist.
The leader I mentioned? We talked through what honesty with his team could look like: "I know this is hard. Here's what I can and can't control. I'm going to advocate for you." That's the kind of leadership that keeps people's trust when the pressure comes. My friend didn't need a framework. He needed permission to be honest. That's usually what ethical leadership comes down to, not a policy position, but the courage to say what's true to the people counting on you..