November 23, 2020
General Counsel, Chief Compliance Officers and the ‘Ethical Revolution’
By
Spencer Stuart's Legal, Compliance & Regulatory Practice
Conversations with Rob Chesnut, former GC and Chief Ethics Officer at Airbnb
“Integrity is a great buzzword, but one used often in today’s corporate world with little understanding of what it means,” says Rob Chesnut, former general counsel and chief ethics officer at Airbnb. The proof is in the ever-present news headlines about organizations failing to live up to their values.
That is why Chesnut focused his latest book on the concept of “intentional integrity”: the commitment from the top of the organization to talk about how the company treats its customers, how employees treat each other in the workplace and how the company impacts their communities. In this time of social unrest, political divisiveness and a pandemic that has amplified ethical concerns, it is now more important than ever to have leaders exemplify, promote and uphold integrity.
“Where there is silence and ambiguity, science demonstrates that people can convince themselves that it’s OK even when a neutral outsider could clearly see that it’s not,” Chesnut says. “To lead effectively, companies and their leaders need to earn the trust and respect of their employees and the global community. Operating with integrity is critical to gaining that trust.”
Chesnut recently joined our Legal, Compliance & Regulatory Practice and select groups of general counsel, chief compliance officers and other senior legal executives from North America for a series of virtual question-and-answer sessions about integrity and to discuss his book, Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution.
Below are some highlights from our conversation.
Creating a culture of intentional integrity
Companies face increased scrutiny and expectations around ethical behavior — from employees, customers and investors. Brands have been ruined, careers derailed, strategies sidetracked, and bottom-line results hurt by ethical failures.
As general counsel and, later, chief ethics officer at Airbnb, Chesnut has a unique perspective on the legal function’s role in ensuring ethical behavior.
“Companies rarely have an ‘integrity officer,’” he said. “Some companies have a chief ethics officer, but as the general counsel, I felt like it was on me. If things go wrong, it is my responsibility to fix them. I would rather spend my time preventing problems than cleaning them up.”
In the best-case scenario, general counsel and chief compliance officers are not merely experts on the law, but also leaders in shaping a positive culture and outlining the norms that guide ethical behavior at their companies.
“I want to create the environment where everyone in the company is encouraged to do the right thing — because all of us can go off course,” he said.
Embedding integrity
How do you ensure that your organization embraces institutional integrity? Our conversations with Chesnut yielded a few important steps.
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Ask candidates the right questions. “I ask for a situation where they had to quickly determine the right thing to do,” Chesnut said. “It is troubling to me if a candidate cannot cite an integrity dilemma, as they happen almost every day. It does not even matter if I ultimately agree with how they handled the situation, as long as they can give me a good example and a thoughtful description of how they responded.”
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Look for humility and self-awareness. “The more humility and self-awareness someone demonstrates, the more integrity they seem to have,” Chesnut said. “The more ego I see, the more potential I see for integrity problems. For example, do they use ‘I’ frequently when interviewing? Or do they talk about themselves repeatedly?”
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Make ethics a part of your onboarding. “More important than trying to recruit for ethics, is starting week one with talking about our company’s purpose, how we operate ethically and why doing the right thing really matters here,” Chesnut said. “That is your chance to get their compass aligned correctly.”
Integrity and ethics in leadership
At the end of the day, it’s up to senior compliance executives to set the tone with top leadership. Chesnut advises open and direct conversation with the CEO so that he or she knows what must happen to lead with integrity.
When asked about how to handle a situation where potential risky behavior is being rationalized, Rob offers some advice: “You can’t be afraid to be the different voice in the room. Everyone in the company should be thinking with integrity with all their decisions, but if you’re the GC/CCO especially so. Ask yourself, ‘is our approach consistent with our purpose and our values?’ Sometimes you have to be the ethical voice in the room.”