The quiet power of boards: why ethics crumble when the board is asleep.

Five years ago, I sat across a board chair in the agriculture value addition space. The CEO had been sacked after a procurement scandal

Five years ago, I sat across a board chair in the agriculture value addition space. The CEO had been sacked after a procurement scandal involving ghost suppliers and inflated invoices.

But here’s the twist: six months earlier, the board had praised this same CEO for “excellent turnaround results.” Why? The numbers looked good. Profits were up. No one asked what fuelled the miracle. That, right there, is the silent rot that boards allow to fester.

The point is simple: the tone of ethics is set by the board, not the CEO. When the board fails to ask the uncomfortable questions, when it chases results at all costs, accountability dies quietly in the corner. Ethical collapse is rarely loud; it starts with silence, and boards are often the first to fall silent.

It starts with a conflict of interest at the board level. This makes some board members “captive” to the CEO, who serves as the keeper of their conflict-of-interest secrets. Before you know it, many board members are exposed to the executive team.

A board that doesn’t smell the smoke will never call the fire brigade

In manufacturing firms I’ve advised, especially family-owned ones transitioning to formal governance, ethical leadership begins and ends with the board’s posture, or simply the owner’s posture.

Not policies. Not speeches. Posture. Does the board tolerate late submission of reports? Does it let the CEO skip over red flags with charm and charisma? Does it rubber-stamp numbers without demanding evidence? Does it tolerate absenteeism without question?

Every time a board lets these micro-indulgences slide, it normalizes ethical shortcuts. By the time fraud explodes, it’s not a breach, it’s a pattern.

 

Accountability starts with structure, not speeches

To anchor accountability, boards must redesign how they operate.

a) Establish independent audit and ethics committees with real teeth. Not ceremonial. Please give them the power to question everything.

b) Conduct executive sessions without management present, every single board meeting. That’s where truth leaks out.

c) Use a board dashboard to track ethical KPIs, not just financial ones. Is whistleblower activity trending down? That’s not always a good sign.

In the insurance industry, I have seen boards create anonymous channels for internal dissent. At first, it caused discomfort.

Later, it unearthed a data manipulation scheme that could have cost the company its license. The board’s decision to act fast, not debate endlessly, saved the brand.

Leadership tool, the ethical mirror

Here’s a practical takeaway. At the end of every board meeting, ask one question: “What behaviour did we implicitly reward today?” If the answer is silence, spin, or evasion, then that’s your new culture. Boards don’t shape ethics with mission statements. They do it by what they let slide.

If you’re on a board, your job is not to support the CEO. It’s to support the truth. Everything else, strategy, growth, profitability, stands on that foundation. Or it doesn’t stand at all.

Stay sharp.

Mr Strategy

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