Balancing ethics and strategy: the secret to sustainable business success

Ever wondered why compliance often feels like “broccoli” while fast business growth tastes like “chocolate”? It’s a powerful analogy from ethics and compliance expert – Vera Cherepanova, which gets to the heart of a major challenge in many boardrooms. 

Discover: 

• Why your board's addiction to quick wins is a recipe for disaster

• How to move beyond short-term goals to create lasting value

• The true ROI of balancing ethics and strategy for sustainable success

The Broccoli vs. Chocolate Boardroom Dilemma​

Vera Cherepanova, Executive Director of Boards of the Future, compares ethics and compliance to broccoli—essential for long-term organizational health but lacking immediate appeal. Short-term wins and quick revenue gains are the chocolate.

This powerful analogy cuts to the core of how businesses often treat ethics and compliance. Boards often prioritize immediate gains until a crisis erupts. Only when scandals, fines, or reputational damage occur does compliance suddenly take center stage.

Vera’s call to action is simple: 

Think about balance, because healthy eating isn’t only broccoli or only chocolate—it’s about taking care of both at the same time.

A healthy organization needs both. Lasting success requires integrating the power of ethics and compliance with the strategic goals.​​

Value Preservation vs Value Creation​

Boards have two main jobs: preserving the value the company has already built and creating new value through growth and strategy. For too long, compliance has been siloed into the “value preservation” category, often seen as just a cost center.​

But what happens when you bring ethics into the picture? You start looking at culture—how things get done when no one is watching. A company's culture is deeply intertwined with its ability to create value. Even the best strategy fails without a culture that supports it.

The 95/5 Problem​

Vera's research on board oversight guides reveals a startling statistical imbalance she calls the "95/5 Problem." 

She found that while these guides often describe ethics as foundational, they dedicate 95% of their content to technical compliance, such as audit committees and reporting standards. A mere 5% is devoted to crucial ethical considerations like organizational values, purpose, and culture. This imbalance suggests that ethics is often treated as a secondary concern, a "softener" for hard compliance rules rather than the core of effective governance.

The Silo Problem​

Another major issue is the "Silo Problem," a functional gap between compliance and the broader business operations. This disconnect creates what Vera calls a "mutual ignorance problem," where:

Boards don't fully understand what ethics and compliance can do, and compliance professionals often don't have a deep understanding of the business strategy.​

For example, if you ask a board member who is responsible for the company's culture, most will say "HR," overlooking the vital role of the compliance function. 

To resolve this, compliance professionals need to develop greater business acumen and strategic thinking. They should be curious, participate in rotation programs, and learn about other departments to foster essential cross-functional communication and break down organizational silos. 

The Time Horizon Trap

Why is ethics often ignored? Because it pays off on a timeline that short-term investors hate.

A Venture Capital fund looking for a quick exit is often interested in the bare minimum of compliance required to avoid a lawsuit before cashing out. This short-term pressure creates an ethical blind spot.

Investments in ethics and compliance make the most sense over a longer horizon, contributing to a more sustainable and successful business.​ By choosing investors who are aligned with a longer-term vision, boards can create the space for more ethical decision-making. 

Reclaiming the Definition of Ethics

In the podcast conversation, Vera emphasizes the urgent need to reclaim ethics from its diminished role within corporate governance. 

Over the past two decades, ethics has often been misunderstood as a "softer" counterpart to compliance, fundamentally underestimating its transformative power. This shift became formalized in 2004 when the U.S. Federal Sentencing Guidelines for Organizations (FSGO) officially incorporated "ethics" alongside "compliance," creating the requirement for comprehensive compliance and ethics programs. The amendment reflected a recognition that organizations needed more than rule-based compliance—they required a cultural commitment to ethical conduct and behavioral norms.

How to Balance Your Board’s Diet: Actionable Takeaways

So, how can leaders move from theory to practice? Vera’s insights suggest a few clear starting points.​

• For Board Members: Start asking different questions. Instead of just asking, "Are we compliant?" ask, "How is our culture supporting the strategy?" and "What ethical risks are embedded in our growth plans?" Challenge the "mutual ignorance" by inviting compliance leaders into strategic conversations.​

• For the C-Suite: Break down the silos. Implement rotational programs that send compliance professionals into marketing, operations, and R&D. When they understand the business, they can provide more strategic advice. 

Vera’s finding: 

Engagement surveys consistently show poor scores on "how much do you know about the department next door?" Communication is everything.​

• For Compliance Professionals: Speak the language of business by framing ethics and compliance as value drivers, not costs. Connect your work to long-term goals—from quarterly targets to five-year strategies and broader sustainability objectives—demonstrating how ethical culture creates competitive advantage.

By embedding ethics into business strategy, you can build an organization that's profitable and resilient.