The 5-Way Test in the Boardroom: A Compass, a Conscience, and the Occasional Chuckle

Let’s start with an unfashionable confession.

I like the Rotary International 4-Way Test.

There. I said it.

In a world awash with mission statements, values walls, and corporate posters that say things like “Integrity” over a picture of a mountain, the simplicity of the 4-Way Test feels like finding a working compass in a sea of broken GPS apps. It doesn’t flash. It doesn’t buzz. It doesn’t require a PowerPoint deck to explain. It just asks—of the things we think, say or do:

1. Is it the TRUTH?

2. Is it FAIR to all concerned?

3. Will it build GOODWILL and BETTER FRIENDSHIPS?

4. Will it be BENEFICIAL to all concerned?

Plus … (my addition)!

1. Is it FUN?

Now, before the CFO faints and the legal team reaches for the liability waivers, let me reassure you—this isn’t a manifesto for replacing risk analysis with campfire singalongs. It’s a reflection on how deceptively robust this humble test really is, especially in boardrooms, where decisions can shift markets, end careers, and launch billion-dollar ventures—or lawsuits.

Let’s walk through each principle, boardroom-style. I promise a few smiles, a few sighs, and a decent chance at truth.

1. Is it the TRUTH?

(Or, “How far can you stretch a KPI before it becomes a lie?”)

Truth in the corporate world is like good dental hygiene: absolutely essential, frequently avoided, and often only visible when absent.

We’ve all sat through the meeting where a line manager presents a graph that’s technically accurate but morally offensive. “We’ve seen a 300% improvement!” (In other words, three people clicked the ad instead of one.)

The 5-Way Test cuts through the smoke. Is it the truth? Not Can I defend this under scrutiny or Is this technically non-fraudulent?—but truth in its classical, unvarnished form.

For boards, truth is gold dust. Without it, strategy becomes fantasy. Worse, governance becomes a game of poker played with mirrors and smirks. Directors are misled. Investors lose faith. Staff roll their eyes—and then roll out the door.

Let’s be blunt. Lies have ROI. That’s why they persist. But truth has compound interest.

Truth-telling boards are less prone to scandal, better able to adapt, and more trusted. That trust, once earned, can’t be bought—not even with the consultancy budget.

Of course, truth isn’t always comfortable. It rarely arrives with cupcakes and balloons. But it always arrives eventually. Ask any whistleblower. Or any shareholder in a company that just re-stated earnings.

2. Is it FAIR to all concerned?

(Also known as: “How not to trigger a walkout, lawsuit, or viral Glassdoor review.”)

Fairness is hard. Especially when the spreadsheet tells you to cut 200 jobs in a region you’ve never visited while awarding yourself a performance bonus large enough to buy a midsized vineyard.

And yet.

The question of fairness—to all concerned—is the mortar that holds together not just boardrooms, but the social contract within companies.

I’ve watched chairpersons agonise over executive pay structures, not because the money wasn’t legal, or even market-competitive—but because it felt unfair. And they were right to worry. Perception of fairness is sometimes more important than fairness itself.

Fairness doesn’t mean everyone gets the same. It means people understand the why behind decisions. It means transparency in reward. Proportionality in discipline. Humanity in change.

Boards that forget this tend to meet their employees again—this time outside the building, holding placards.

And let’s not forget fairness across external stakeholders. Is your supply chain fair to overseas workers? Is your pricing fair to vulnerable consumers? Is your lobbying fair to future generations?

Fairness, like trust, is earned in teaspoons and lost in buckets.

3. Will it build GOODWILL and BETTER FRIENDSHIPS?

(Or: “Why being a corporate jerk is bad strategy.”)

The boardroom can be a strange place. On one hand, it’s a theatre of reasoned debate. On the other, it can be an emotionally stunted cage match between alpha egos, barely concealed contempt, and a war over who gets the final word in the minutes.

The 5-Way Test’s third question is a gentle bombshell: Will this build goodwill and better friendships?

This is not about singing Kumbaya before a merger. It’s about recognising that long-term success is relational, not just transactional. We’ve all worked with those leaders who seem to run on caffeine and passive aggression. They get things done—until they don’t. Because when crises hit, you don’t want colleagues who comply. You want allies who care.

Friendship may be a strong word in corporate corridors, but goodwill isn’t. Goodwill is why some partnerships last decades. Why investors reinvest. Why regulators sometimes pick up the phone before they pick up the fine.

And let’s be honest—boardrooms could use a little more warmth. I’ve seen directors open up real conversations—about culture, about burnout, about ethics—simply because someone had the courage to ask, “Is this helping us like and trust each other more, or less?”

The best decisions build something beyond the balance sheet. They build relationships.

4. Will it be BENEFICIAL to all concerned?

(Also known as: “The stakeholder sanity test.”)

Here’s where the ESG crowd starts nodding vigorously and the Milton Friedman diehards start clutching their pearls.

Let’s be clear: not every decision can benefit all concerned. But good leadership tries.

It asks: What are the ripple effects? What’s the systemic consequence of this seemingly local choice?

It doesn’t ask: “What can we get away with?” It asks: “What creates durable value for everyone involved?”

The phrase “all concerned” is beautifully ambiguous. It includes shareholders, yes—but also employees, customers, suppliers, communities, ecosystems, and, increasingly, the climate.

If that sounds overwhelming, it is. But it’s also reality.

We live in a world where consumers tweet, staff unionise, suppliers whistleblow, and social license is as vital as legal license. Pretending otherwise is corporate myopia.

I’ve seen boards make bold calls—rejecting short-term profit for long-term shared benefit. And I’ve seen the rewards: deeper brand loyalty, greater staff retention, and yes, healthier margins over time.

It’s not about charity. It’s about maturity.

And nothing builds a legacy quite like serving others beyond yourself.

5. Is it FUN?

(Wait—are we allowed to ask that?)

Let me tell you a secret.

I once had a chairman who insisted on ending every board meeting with the question, “Did we enjoy ourselves?”

At first, we thought it was a gimmick. A way to force a smile before lunch. But over time, we realised—he was deadly serious.

He understood that joy is a strategic asset.

Boards that enjoy their work think more creatively. Disagree more constructively. Make bolder bets. Laugh a little more—and as a result, listen a little better.

Now, let’s be realistic. Not every agenda item is a picnic. Nobody enjoys restructuring an underperforming region or discussing succession planning with a 74-year-old founder who thinks he’ll live forever.

But joy can—and should—be part of the process.

Fun isn’t frivolous. It’s what makes humans resilient, collaborative, and innovative. And if we want workplaces that retain great talent and inspire real performance, we must start by letting people have a bit of fun along the way.

That includes boards.

The Real Test: Why This Matters Now

The reason the 5-Way Test has stuck with me over the years—beyond its Rotary roots, beyond its feel-good simplicity—is that it scales.

It works when you’re trying to resolve a school playground squabble. And it works when you’re navigating a multibillion-dollar merger.

It asks questions that pierce the armour of job titles and jargon. That restore clarity in a world obsessed with complexity. That demand we lead not just with acumen—but with conscience.

In a corporate climate where attention is scarce, cynicism abundant, and burnout endemic, we don’t just need strategy. We need wisdom.

The 5-Way Test is not a substitute for a business plan. But it is a sanity check on whether that business plan deserves to be followed.

Because when things go wrong in companies—and they do—it’s rarely due to a shortage of intelligence. It’s usually due to a failure of integrity.

A Word on Cynicism

I can already hear the internal voice of many an overcaffeinated executive whispering:

“This sounds soft. Unrealistic. Naïve.”

Maybe.

But if you think these five questions are naïve, try ignoring them for a few years and watch what happens. Ask the leaders of organisations undone by lies, greed, arrogance, and shortsightedness. Ask the boards that were too clever by half. Ask the staff who left. The customers who fled. The regulators who arrived with subpoenas instead of questions.

There’s a reason the 5-Way Test still shows up on office walls, community halls, and yes, even board packs—because it's true.

Simple doesn’t mean easy. And values that seem quaint are often the ones most crucial to survival.

Closing Thoughts: The Real ROI

If you’re still with me, congratulations. You’ve just read a blog about a 90-year-old Rotary Club motto applied to 21st-century boardrooms. That either makes you deeply thoughtful—or just locked out of your Zoom password and looking for something to read.

But here’s my challenge to you, especially if you sit on a board or lead a company:

Print out the 5-Way Test. Bring it to your next strategic offsite. Stick it on your governance committee agenda. Ask your CEO to reflect on it quarterly. Frame it if you must.

Then ask yourself and your team—honestly:

• Are we telling the truth?

• Are we being fair?

• Are we building goodwill and trust?

• Are we benefiting others—or just ourselves?

• And for heaven’s sake… are we having fun?

You might be surprised by the power of those questions.

They don’t just help us lead better companies.

They help us become better people.