The root of crisis in any organization, private or public sector is a lack of good leadership based on ethical norms and practice. A leadership that is based on ethics and practice has the capacity of providing good governance. Though the study is focused on the grassroots government in Nigeria, its result is applicable in any level of government. The grassroots government, known as local government in Nigeria, is not only a government close to the people; also, it offers a crucial learning field for men and women who would eventually transition to state and federal government. Men and women of ethical principles have the capacity needed to establish and sustain ethical leadership that ensures good governance. Factors associated with good governance, such as, participation, accountability, transparency, responsiveness, rule of law, etc., are enhanced and sustained when such ethical minded people occupy the positions of leadership in government. Government is established to serve the collective interest of the public, using all the available resources for that purpose. To guarantee good governance in public sector, government, ethical leadership needs to be fostered.