The Impact of Ethical Leadership on Corporate Governance: A Cross-Industry Analysis

The Impact of Ethical Leadership on Corporate Governance: A Cross-Industry Analysis Mweemba Hikaamuna ZICA Licentiate and Lecturer: University of Africa DOI: https://dx.doi.org/10.47772/IJRISS.2025.914MG00119 Received: 24 June 2025; Accepted: 28 June 2025; Published: 29 July 2025 INTRODUCTION Ethical leadership is a leadership style characterized by guiding others through principles of fairness, integrity, honesty, and accountability. Ethical leaders not only make morally sound decisions themselves but also create an environment that encourages ethical behaviour among employees and stakeholders. As evidenced by early 21st-century corporate scandals-including Enron, WorldCom, Lehman Brothers, and Volkswagen-leadership plays a pivotal role in shaping both corporate ethics and governance outcomes. As stakeholders demand greater integrity and responsibility, ethical leadership is no longer an easy skill but a critical driver of governance quality. This article explores the influence of ethical leadership across industries and presents mechanisms through which it enhances corporate governance structures and practices. BACKGROUND / CONTEXT The Rise of Ethical Leadership in Business Over the past two decades, the business world has encountered multiple corporate scandals that have profoundly shaken public trust in corporate governance and ethics. Prominent examples include Enron (2001), WorldCom (2002), Lehman Brothers (2008), and more recently, Volkswagen’s emissions fraud scandal (2015). These high-profile failures uncovered serious lapses in ethical conduct, transparency, and board oversight. As a result, a wide range of stakeholders-including regulators, investors, employees, and the public-have increasingly demanded corporate leaders who not only deliver financial performance but also demonstrate moral integrity and accountability. The Evolution of Corporate Governance Corporate governance originally focused on aligning the interests of managers and shareholders, particularly in publicly traded companies. Over time, its scope extended to include broader accountability to stakeholders, ethical conduct, transparency, board independence, and risk management. The 2002 Sarbanes-Oxley Act (U.S.), the UK Corporate Governance Code, and OECD principles have all played pivotal roles in