Deserved or not – and in this case it is mostly not – the global financial crisis has taken a toll on the reputation of hedge funds as a group.  The Madoff debacle, for example, whipped the public and political class into high dudgeon over the ostensibly mean and malicious activities of hedge funds – despite the fact that Madoff never managed a hedge fund (he purported to manage what would more appropriately be called separate accounts), and most credible hedge fund managers who looked under the hood of Madoff’s obscure operation steered widely clear of it.  Hedge funds have not asked for nor have they received bail out money, and their returns during the crisis, while negative, have been less negative than the returns in other asset classes.  They bought Chrysler debt and prolonged the life of the automaker outside of bankruptcy court, but then were charged by the President with breaching their patriotic duty (by satisfying their fiduciary duty).  In short, much of the malign recently visited upon hedge funds and their managers has been unjustified.  But politicians often respond to volume over veracity, so the merits of criticisms of the industry often get lost amid the vehemence of such criticisms.  In the context of such criticism, hedge fund managers have been establishing boards of ethics to advise on close ethical calls and best professional practices, and to credibly demonstrate to various constituencies – including regulators, investors, employees, lenders, counterparties, deal partners and others – that they take ethical matters seriously.  We discuss what ethics boards are, precedents for such boards, the types of issues typically presented to such boards, how such boards interact with compliance staff, how binding the recommendations from such boards are and the potential liability of board members.