This chapter explores the integration of behavioral economics into corporate governance as a means to address principal-agent problems and enhance ethical corporate culture. Traditional governance mechanisms often fall short in mitigating conflicts of interest due to cognitive biases, bounded rationality, and social influences. Through incorporating behavioral insights, organizations can design interventions such as ethical nudges, transparency mechanisms, and incentive structures that promote integrity and accountability. Key findings highlight the significance of the “tone from the top”, peer influence, and structured ethical reminders in shaping corporate behavior. While behavioral approaches do not replace traditional governance models, they complement existing structures by addressing their limitations. This study underscores the necessity of a diverse approach to corporate governance, ensuring sustainable business practices that align with both shareholder and stakeholder interests.