Abstract Ethics of business leadership has witnessed a renewed interest in recent years provoked perhaps by a number of cases of business leadership failure. Unlike the critics of the industrial policy and direct market intervention by the state, in this paper we argue for an increased role of the state in imposing the ethical standards and the need to integrate the ethical infrastructure into the state's industrial policy. We believe that overall national economic success is dependent on four essential elements: financial infrastructure, physical infrastructure, knowledge infrastructure and ethical infrastructure. We further believe that proper integration and correct functioning of these elements within the state's industrial policy is fundamental to economic development and growth in any country in 21st century. We consider that the ethical infrastructure might provide an important element of a possible riposte in the future to the serious financial scandals of the kind that recently affected global business. We foresee that ethical infrastructure fosters best practice. In this paper, we argue that the integration of the ethical infrastructure is a new requirement of the state's industrial policy. Copyright © 2010 John Wiley & Sons, Ltd.