One Man’s Ethics Is Another Man’s Power Move: Ethics in the Boardroom in 2025

“Ethical leadership” has become a buzzword in boardrooms across Australia, often framed in polished policies and annual reports. But when you strip back the ESG spin and board charters, how many directors are truly making ethical decisions when it matters most? And what does “ethical” even mean in a boardroom filled with different backgrounds, personal incentives, and power dynamics?

The reality is: one man’s ethics is another man’s power play. And in 2025, we’re seeing that play out in increasingly complex, and at times, disturbing ways.

Ethics in Practice, Not Just in Principle

It’s easy to sign a code of conduct. Much harder to act on it when real money, reputation, or relationships are at stake. I’ve witnessed firsthand how quickly “ethics” gets reinterpreted when boards are under pressure: stakeholder expectations rising, investors growing impatient, founders acting erratically.

And it’s not just emerging companies. In May, Monash IVF’s CEO resigned after a second embryo transplant bungle, a devastating governance failure in one of the most ethically sensitive industries. When mistakes of that magnitude occur, boards can't hide behind legalities. They need to lead ethically. (The Guardian, June 2025)

The Shareholder vs Stakeholder Debate Is No Longer Theoretical

There’s been a quiet but critical shift in corporate governance thinking over the past decade from shareholder primacy (Milton Friedman-style) to stakeholder inclusivity. But here’s the tension: Australian corporate law still expects directors to act in the “best interests of the company.” That’s open to interpretation.

What does “best interests” mean when:

• A First Nations community wants its voice heard on a mining board?

• An aged care company faces activist shareholders and a Royal Commission?

• A founder-CEO is destroying staff culture but still growing revenue?

Boards must now walk a fine line, balancing investor returns with environmental, social, and reputational risks that can’t be measured on a quarter-to-quarter basis.

Ethical Decision-Making Is a Human Practice, Not a Policy Template

The AICD suggests directors should “reflect on organisational values,” “consider stakeholder impacts,” and “seek diverse perspectives.” All good advice. But here’s the truth:

Ethical leadership doesn’t happen because of a framework. It happens because someone in the room decides to do the right thing — even when it's uncomfortable, inconvenient, or unpopular.

Ethical decision-making is personal. It comes down to whether someone speaks up when a colleague is disrespected in the room. Whether a Chair challenges a founder’s reckless expansion. Whether a board decides not to paper over a failing culture because “it might scare off investors.”

Where Things Break Down: Behind the Scenes

Having sat in hundreds of boardrooms and advised on even more capital raises, here’s where I see ethics start to break down:

• Power consolidation: A strong CEO, often a founder, starts making unilateral decisions. The board looks the other way.

• Groupthink: The same voices dominate. Dissenting views are quietly edged out under the guise of “alignment.”

• Misuse of social capital: Directors trade on each other’s networks and reputations, without consent or accountability.

• The politics of exclusion: When people are strategically cut out of decisions, deals, or meetings… and no one calls it out.

These are not theoretical risks. They’re real, and they are happening in both listed and private companies right now.

Why Diversity and Culture Matter More Than Ever

Board diversity is not about quotas or optics, it’s about reducing blind spots. A board composed of individuals with similar backgrounds, education, and worldview is more likely to rationalize unethical decisions as “necessary” or “commercial.”

Having culturally diverse, gender-diverse, and professionally diverse directors doesn’t guarantee better ethics, but it does make it harder to sweep uncomfortable truths under the rug. This is where culture becomes crucial.

As the Governance Institute of Australia notes, “inclusive boardroom cultures build trust and accountability from the top.” And that’s exactly what boards must model now, because ethical culture is caught, not taught.

So, What Now?

If you’re sitting on a board, or advising one, ask yourself:

• What would I do if I weren’t afraid of being unpopular?

• When was the last time I challenged the status quo in the boardroom?

• Whose voices are being excluded from key decisions, and why?

• Do we value ethical leadership… or just polished PR?

Ethics isn’t something you outsource to the legal team. It’s not something you only engage with when a scandal hits. It’s the daily decisions, the small comments, the moments when you stand up or stay silent.

Final Thought

In 2025, ethical governance is no longer optional. Boards must go beyond compliance and lead with character. The best directors I know are not the loudest or the most credentialed, they are the ones who do the right thing when no one’s watching.

Because one man’s ethics shouldn’t be another man’s excuse.

What’s your view? Have you seen examples of ethical leadership, or the opposite, in today’s boardrooms? Let’s start a conversation.

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