Blondie,
This expression can mean different things in different contexts. Let me list a couple of the common ones.
1. "Freeness of Speech" by Virtue of Good Example - This basically comes down to: "you should be practicing what you preach." So, for example, most congregation elders and Circuit Overseers I know would expect a potential elder to be spending at least as much time in field services as the congregation average. The rationale is: "How can you ask others to do something if you are not, and you're supposed to be setting the example?" Following this same line of reasoning are expectations of superior meeting attendance, etc. Also, a potential elder should be measuring up to a reasonable degree to all the qualifications outlined in 1 Timothy and Titus. Among these is the requirement that he should be caring for his own family.
In theory, this principle is very good. In practice, it get's tricky. Sometimes, the one's who "look good" organizationally are the very ones who turn around and cause great pain to their brother when appointed. Conversely, I know and respect many brothers who will likely never be elders because they don't "measure up" in some of the areas looked for.
2. "Freeness of Speech" in Elder's Meetings - The Watchtower has counseled elders that they should be able to speak freely with each other, and also listen respectfully to the views of other elders. Not all elders are "cut from the same cloth," and many might be surprised at the differences of viewpoint and opinion among elders. To some extent, elders at times even share doubts and concerns with aspects of JW belief and practice with fellow elders. I've done it myself. However, the reality is that one has to be extremely careful in doing so. Many still have a "siege mentality" if they hear anything that doesn't "toe the party line."
With respect to elders taking advantage of "confidentiality" to gossip about others, I would certainly not deny that it happens. However, I will say, and the Society specifically directs, that it should not. For example, the three elders selected to serve on a judicial committee are directed not to share specifics of the case even with fellow elders. If a given elder does so, than he is in error.