Becoming Intentional About Corporate Integrity

Corporate Integrity

Today, integrity isn’t just a concern for high-profile organizations - it’s an issue for every organization – and if a company hasn’t determined, developed and communicated its unique code of ethics to its team and to the public at large, that company is missing a critical opportunity to bring out the best in themselves, in their industry and in their community. Today's guest is Rob Chesnut, former Chief Ethics Officer for Airbnb and author of of Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution, and here, he'll explain:

  •  The shift from "shareholder value" to "stakeholder capital";
  • The value of building a custom Code of Ethics, one that reflects the values and culture of the organization; 
  • How "The Six C's" can help drive integrity into your company's culture; and
  • How to avoid "The Top 10 Most Common and Problematic Categories of Ethics Dilemmas"!
Corporate Integrity

Rob Chesnut

 Corporate Integrity

"So as a company you can't ignore this. The world is pushing you and forcing you to address these issues. So I think the question is, are you going to be dragged, kicking, and screaming, or are you going to lead, get in front of it? Because if you get this stuff right, it's something that actually drives your business."

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Defining Integrity

  • The classic definition of integrity is “doing the right thing when no one is watching.”
  • Today, everyone is watching at all times.
  • Misdeeds and mistakes of the past are now coming out left and right, and moving forward, these mistakes will continue to be seen and publicized, especially when a company is at the heart of the issue.


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The Current State Of Corporate Integrity

  • While many people believe that the world has taken a step back when it comes to corporate integrity, Mr. Chesnut believes that we have taken a step forward. 
  • With the internet comes transparency. 
    • Mr. Chestnut uses the terms “scattered power” to identify the power the internet has given society.
      • Today, almost everyone has a camera and access to the internet, giving everyone a voice and a place where people will listen and take note of what they say.
  • With this increased sense of transparency, companies and leaders now realize they have to raise the bar when it comes to corporate integrity.
  • If company leaders fail to operate with integrity, it is likely that their jobs and brand will be at risk.

Heroes & Hypocrites

  • Mr. Chesnut believes that too much is made of the idea that someone is a hero for raising their hand and pointing out a problem.
    • The goal should be to create a culture where everyone is comfortable raising their hand.
    • The days of being labeled a “whistleblower” must end.
  • Corporate integrity is something that everybody in the company should feel ownership over and it should be the norm.
  • Leaders should also make it known that they are not afraid to have a conversation with anyone regarding integrity.

Becoming More Mindful About Corporate Integrity

  • Employees want to be part of a company that has values that are consistent with their own.
    • When you go to work for a place it's a part of the story of your life. It's a logo on your LinkedIn account. People want to be proud of where they work. They want to feel like when they go to work every day, it's not just about earning a paycheck.
  • In the past, employees may have felt that speaking up would cause their careers to become derailed, but that notion is no longer widespread. 
  • Employees also aren't the only ones speaking up.
    • Customers have now become acutely aware of any corporate integrity mishaps. 
    • We are in an age of conscious consumerism where consumers are wary of where they spend their money.
    •  If a company does not reflect the personal values of a consumer, they won’t spend their money there and companies can't ignore this.
  • As a company, confronting corporate integrity is not necessarily easy, but it’s imperative that you get in front of it!
  • If a company is able to get this focus on corporate integrity right, it's something that will drive business. 
    • It creates loyalty with employees, and employees become champions.
    • Your customers can become champions as well.
  • Studies show that companies that operate with integrity outperform the market and outperform their competitors.

What Is The Purpose Of A Company?

  • In 1970, Economist Milton Friedman introduced a theory in an essay for The New York Times titled "A Friedman Doctrine: The Social Responsibility of Business is to Increase Its Profits". In it, he argued that a company has no social responsibility to the public or society; its only responsibility is to its shareholders, and this is the thinking that has dominated capitalism for decades.
    • The problem with this kind of thinking is that if you're focused on driving your stock price up and that's all you're focused on, all you're thinking about is this quarter's number, which is short-sighted.
    • It’s also problematic in that it encourages the cutting of ethical corners -- in other words, anything is justified and good if it gets the stock price up.
  • The Business Roundtable, an organization made up of the CEOs of some of the top companies in the world, recently addressed this issue,  and concluded that the purpose of a company is no longer purely profit. It's no longer centered on simply increasing shareholder value - instead, it should be centered on the notion of Stakeholder Capitalism.
  • Stakeholder Capitalism is a concept in which every company should identify exactly who their stakeholders are, and the business should operate for the benefit of the stakeholders at large.
  • In his time at AirBnB, Mr. Chesnut defined their stakeholders as hosts, guests, employees, investors, and the world at large.
    • Each decision and action made by the company will have an effect on these stakeholders differently. 
    • Operating with corporate integrity will allow for almost all, if not all, of those decisions to be positive in some way for each stakeholder group.
  • This way of thinking encourages more ethical thinking and actions.

Acting With Corporate Integrity - A Genuinely Smart Business Decision

  • AirBnB is a great example of how acting with integrity isn’t just for the optics - it actually improves business.
    • AirBnB faced an issue where potential guests were not accepted because of the color of their skin.
    • AirBnB responded by hiding the name and image of a potential guest from the host prior to acceptance. 
      • The platform lost some users due to this change, but they were also endorsed by civil rights groups which in turn, boosted business.
      • The decision was not made for any financial reasons; It was made because it was the right thing to do.
  • Today, people respect ethical decisions there are made for the greater good, not necessarily for profit.

Creating A Code Of Ethics

  • Traditionally, not much thought has gone into the creation of a corporate code of ethics - it’s often treated as a compliance task rather than as a critical culture document.
  • When creating this code, it is important that a diverse team of people is involved.
    • Different cultures, backgrounds, and positions will provide a more robust code of ethics.
  • If you want to drive corporate integrity into your culture, you need to involve leaders in the development of your code of ethics. 
    • Those leaders have to be willing to engage in authentic, direct communication about corporate integrity because integrity is contagious.
    • Leaders set the tone when it comes to corporate integrity.
  • A good code of ethics should be a reflection of the culture, values and language  of a company.
  • When writing your code of ethics, be specific and to the point: ambiguity and silence are the enemies of integrity!

The Six Cs

  • The Six Cs are a checklist of the basic practicalities that drive corporate integrity into your company’s culture.
    • CEO: This first “C” simply emphasises the importance of leadership buy-in when it comes to corporate integrity. Without leadership buy-in it will be very difficult to instill a sense of integrity throughout. 
    • Customized Code of Ethics: This “C” emphasizes creating a custom code of ethics that works for your company. It must be a unique document that is in company language and reads like something that reflects company values. Employees should be able to recognize it not as some third party document, but something that really belongs to the company.
    • Communication: Thorough and robust communication of the code of ethics and company values is the only way that companies will be able to instill those values into their employees. This means communicating through more than just an email - it should be interactive, discussion-based, etc.
    • Consequences: There should be a clear consequence system for people who do break the code of ethics.
    • Clear Reporting System: Employees should feel comfortable communicating ethics violations back to leadership. They should also have access to easy and comfortable methods of reporting.
    • Constant Drumbeat: This final “C” refers to the constant communication and reiteration of the code of ethics and ensuring that everyone understands the company values and operates within them.

Code Moments

  • Code moments are the moments that arise in which your integrity is tested.
  • In these moments, everyone is watching, and how you handle it will send a message to everyone else about the importance of corporate integrity.
  • Everyone must be mentally prepared to face moments like this throughout their career.

The Ten Most Problematic Categories Of Ethics Dilemmas

  • In his book, Mr. Chesnut outlines ten specific categories of ethics dilemmas.
  • The key to avoiding these issues is to be intentional about them in your company code of ethics. 
  • These ten categories are:
    • Inappropriate relationships
    • Alcohol
    • Sexual harassment
    • Data privacy
    • Expense account violations & misuse of corporate resources
    • Conflict of interest
    • Fraud
    • Sharing confidential information & trade secrets
    • Bribery
    • Employee use of social media

Rob Chesnut Background


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