Leaders of academic health centers (AHCs) hold positions that by their very nature have a high potential for ethical conflict. The authors offer an ethical framework for identifying, preventing, and managing conflicts in the leadership of AHCs. This framework is based on and implements both the ethical concept of AHCs as fiduciary organizations and also the legitimate interests of various stakeholders. The authors describe practical steps that can be tools for the preventive-ethics leadership of AHCs that enable leaders to avoid strategic ambiguity and strategic procrastination and replace these with transparency. The ethical framework is illustrated by applying it to an organizational case study. The major contribution of the ethical framework is that it transforms decision making from simply negotiating power struggles to explicitly identifying and making ethical decisions based on the legitimate interests and fiduciary responsibilities of all stakeholders.