Integrity, it’s been said, is not something to show off to others. It’s what you should be doing even when nobody’s looking. Integrity is the choice between what’s convenient and what’s right.

Along with quality, accountability and trust, “integrity” is one of the most common words you’ll find on corporate values statements. If you listen carefully, you can almost hear the John Philip Sousa music playing in the background.

But the actual practice of integrity requires much more than high-sounding speeches by the CEO and colorful posters in the company cafeteria. For evidence, just check out the companies that get exposed by whistleblowers.

Or skewered by the media. Or boycotted by customers. Or dumped by investors. Or protested by their own employees.

A common clean up approach involves launching a PR campaign, issuing a perfunctory mea culpa, then proceeding as though no wrong ever happened. In most cases, that approach fools nobody. And with a compromised reputation, a company risks losing everything.

Robert Chesnut, chief ethics officer at Airbnb, offers some helpful advice in his book Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution. He provides smart coaching on how to create the clarity and accountability required for building a culture of integrity.

What’s a culture of integrity? It’s a behavioral “operating system” that doesn’t just protect people from ethical lapses, but it energizes them to act on their professed values.

What are Rob’s qualifications to coach on this subject? He was a federal prosecutor (prosecutors know a lot about integrity lapses). Then he founded the Trust and Safety Department at eBay and the integrity training program for Airbnb. What do these two companies have in common? Their business models depend on trust and they had to invent the rules of engagement in the new frontiers of e-commerce.

In today’s business environment, frontiers of unknown ethical questions seem to be everywhere. Rob’s insights provide a good roadmap.

Rodger Dean Duncan: What do you see as some of the most common integrity issues facing organizations and workers today?

Robert Chesnut: I have a list of the top ten integrity issues businesses face, and it includes things like sexual harassment, conflicts of interest, expense account violations, and such. But the biggest issue we should be thinking about is the misalignment between a company’s values and those of its customers or employees.

Employees today want to have a positive impact in the world. They want to be proud of the companies where they work and they see their own identity wrapped up in the company’s brand. In the past, employees were silent, in part because they didn’t have a good way to communicate concerns. Today, they’re talking together on Slack, Blind and Glassdoor. They’re blogging, using the Internet as a platform to shine the light on problems—Susan Fowler’s blog post upended Uber and its founder. They’re speaking up and even walking out if they don’t like their company’s handling of equity in pay, or an executive who behaves badly, or how the company does business.

Companies are feeling the pressure from customers as well. We are living in an age of conscious consumerism—according to a recent study, customers are four to six times as likely to purchase from and champion a brand that articulates a purpose that aligns with their own values.

Duncan: Way beyond pablum like “do the right thing,” what needs to be in a code of ethics?

Rob Chesnut

Chesnut: Phrases like “do the right thing” are so ambiguous that they don’t add value. Ambiguity is a fertile breeding ground for integrity issues, it gives each person the freedom to interpret the “right thing” for themselves. We know that human beings tend to give themselves the benefit of the doubt when they have that freedom. As a fundamental matter, I look for three things in good codes.

First, is it written in the company’s language, by the company’s employees. Too often, companies simply go online and copy another company’s code of ethics, substitute their own company name and logo, then email it out to their own employees. Check the box. The irony of stealing a code of ethics is stunning. I love to see a code of ethics that has a personal written statement from the CEO up front, and has the company’s mission and values woven throughout.

Second, a code should address issues relating to compliance and integrity that employees might reasonably encounter while with the company—dating and sexual harassment, alcohol use, interactions with government officials, conflicts of interest and the like.

And finally, a code needs specificity whenever possible about exactly what is permissible and what is not. For example, a policy on accepting gifts from vendors should not simply ban gifts “that might impair the impartiality of the employee who is offered the gift.” Instead, be specific—you might permit “typical business courtesies such as hats, t-shirts, food and drink, and entertainment, so long as the value of the gift does not exceed $200 from the same vendor in any calendar year. Gifts that are not typical, or that have a value that cannot be clearly determined, should be cleared in writing by the ethics team prior to acceptance.”

Duncan: You say leaders should put out the welcome mat for complaints. What does a clear and safe reporting process look and feel like in actual practice?

Chesnut: Too often, a company’s reporting process is buried in the corporate intranet. Try this—pick three employees and ask each of them to show you how they would file a hotline complaint. Watch them as they go online and search for the reporting tool. If on average they can’t find the right place within two minutes, you’ve got a problem. It shouldn’t be a scavenger hunt. How you present the tool to employees speaks volumes about how important you believe the entire process is to the company.

I’m also impressed with a new wave of startups that are providing great alternatives to traditional hotlines. While hotlines are legally required, the truth is that employees often don’t feel comfortable going into the corporate intranet to file a complaint. Today’s employees are used to working on their phone, and tools like Not Me or Vault are phone apps specifically designed to help employees feel more comfortable around raising concerns they see in the workplace. Adding a second reporting tool sends a powerful message that, yes, you really do want to know about workplace issues.
Duncan: It seems common for “whistleblowers” to feel shut down, retaliated against, shamed or ostracized. What can leaders do to ensure that such punishing behaviors do not occur?

Chesnut: Companies have to adopt a mindset that leans into criticism, is open to constructive feedback, and recognizes the value of hearing about problems early, directly from employees, before they become major public embarrassments. It’s easy to dismiss someone’s concerns as overblown or sensitive. But you need to get past that and actually reward a “speak up” culture?

I’ll give you a small example. Airbnb has open desking, where a number of people work at stations in an open area. I worked near IT/Security. A couple of years ago, a mid-level manager came up to me and told me that he noticed I had left my work station with my computer screen on, unlocked, earlier in the day. Now, it would have been easy for me to dismiss this—I was gone for only a few minutes at the restroom and my desk was off in the corner. But I recognized he was right, and thanked him in a sincere way. He showed me how to add a one-click lock button to my laptop, and it was a great encounter. I thought about how much courage it took for a mid-level manager to approach an executive and point this out, and so I took the next opportunity I could to publicly call him out and reward him with one of our nice steel Integrity Airbnb water bottles for this act. Two years later, he sent me a note telling that this recognition was his proudest moment at the company. It doesn’t make much effort. It just takes a commitment by leadership to the right approach.

Duncan: In terms of reinforcement and repetition of ethics “rules,” what have you seen as best practices?

Chesnut: Ethics and compliance programs are often “owned” by legal or HR. They become too lawyerly, and the truth is that a lot of employees are intimidated about going to see lawyers or HR folks.

You want to create broader ownership over ethics which is why at Airbnb we created an ethics advisor program. We selected 30 employees from different departments and different global offices—Finance, Marketing, Sales, Support—and invited them to participate in a group within the company that could be a resource to other employees to discuss ethical issues. We gave them extra training and some nice ethics branded jackets. We also created an internal reporting mechanism so they could all share with each other the issues they were getting and so we could get good data and ensure consistency. It was phenomenal. Employees really loved having a fellow employee on their team that they could turn to with quick questions or concerns. And the advisors enjoyed the extra responsibility of being leaders in this important area. Nearly 100 employees approached the group in the last two years wanting to join, and there’s now a formal application process. The point is that you want ethics to be owned broadly, woven into the company rather than the domain of a small isolated legal team.

Duncan: What guidelines do you recommend for creating appropriate consequences for integrity violations?

Chesnut: It seems that each integrity violation presents a unique set of circumstances, so it’s hard to develop a “matrix” that defines a punishment for each potential violation. You run the risk of failing to consider edge cases and important mitigating or aggravating circumstances. I want a system that promotes fair, consistent consequences, not a system that gives senior or particularly valuable employees a big break, nor one that is so harsh (in the name of “zero tolerance”) that the punishment is unfair. I’d establish a small, senior group with diverse representation, including legal and HR, that can review matters and is aligned on the overall principles of fairness and consistency. After some time, a rhythm and consistency develops.

Duncan: What are some early warning signs that people may be getting lax on integrity issues?

Chesnut: A lot of companies look to their reporting hotline for signs of trouble—and if there are few or no reports, assume that everything is good. I look at it differently. I like to see an active hotline (but hopefully one filled with mostly minor issues).

There will be issues in any company, but an active hotline is a sign that people are aware of, and trust, the process. They’re not afraid to speak up. Companies where there are no reports might be highly ethical, or they might be filled with issues that people are afraid to come forward and disclose. That’s why it’s a good idea to keep an eye on anonymous employee sites like Glassdoor or the Blind app. There’s often trouble bubbling under a quiet hotline.

Duncan: As the Catholic Church and Boy Scouts of America have seen, keeping serious ethics violations “under wraps” can have sobering long-term consequences. What’s a workable approach for handling bad behavior in ways that prevent perpetrators from going to a new workplace and repeating their misconduct?

Chesnut: Transparency is a wonderful deodorant. And unethical behavior often thrives in cultures of secrecy.

Here’s one policy I’d encourage all companies to adopt: eliminate non-disclosure agreements.

Michael Bloomberg’s presidential campaign imploded on national TV over the existence of nondisclosure agreements in sexual harassment cases at his company. And the Washington Redskins look horrible for refusing to release their former employees from NDAs they were required to sign in previous sexual harassment cases.

The better course is to adopt a policy that you will never be afraid to let your employees talk about their negative experiences, even if you don’t agree with their perception. Your new policy—your company will never ask for, nor sign, an agreement that limits any employee claimant from truthfully disclosing the factual circumstances behind any legal claim they make against the company. Hiding behind an NDA will likely reflect more poorly on your company, and cause more harm, than the dispute itself.

And there’s a financial benefit from adopting this policy of openness as well—the federal government has enacted the so called “Weinstein tax” that makes sexual harassment settlements tax deductible only if they do not include an NDA.

Duncan: There’s no doubt that tough times reveal character. Operating with integrity is of course always important—and arguably especially so during a crisis like Covid-19. What steps should an organization take during a crisis to ensure that its actions are consistent with the integrity values it professes?

Chesnut: Appoint one or two leaders to be the voice of the stakeholders who aren’t in the room. Charge them up front with looking at all your major decisions during the crisis through the lens of integrity, and make it clear that you are counting on them to speak up. Commit that you won’t make any significant decision without getting their input on the ethical implications of the decision.

You might not agree with all their points, but you’ll feel better knowing that there will be voices in the room reminding you of how integrity matters even more in challenging times.

This column was originally published by Forbes, where Dr. Duncan is a regular contributor.

Rodger Dean Duncan
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