Leadership in medicine, as in other settings, should be based on values that provide appropriate direction for the use of institutional power and authority. Leadership also requires managerial competence. Managerial knowledge and skills can be used for worthy and unworthy goals and therefore require a moral foundation. Using the methods of ethics, we argue that the concept of the physician as the moral fiduciary of the patient should be the moral foundation of management decisions by physician-leaders. We take this concept from the history of eighteenth century medical ethics and develop it in terms of four professional virtues--self-effacement, self-sacrifice, compassion, and integrity. We apply these four virtues to show how physician-leaders should create a moral culture of professionalism in health care organizations. We then identify four vices--unwarranted bias, primacy of self-interest, hard-heartedness, and corruption--that undermine this moral culture of professionalism. Because health care organizations now play a central role in patient care, their moral culture and therefore physician-leaders have become vital elements in physicians being able to maintain their professionalism. Physician-leaders bear major responsibility to shape organizational cultures that support the fiduciary professionalism of physicians.