This episode’s remarkable guest is Robert Chesnut, the Former Chief Ethics Officer of Airbnb Inc., a role he took on after nearly four years as Airbnb’s General Counsel.

Rob graduated from the University of Virginia and Harvard Law School. He spent fourteen years in the U.S. justice department, rising to the position of running the major crimes unit. One of the people he prosecuted was Aldrich Ames, the CIA employee who was a double agent for Russia.
Next, he moved west and became eBay’s third attorney and, eventually, the senior vice president of the trust and safety department. In 2008, he joined Live Ops as general counsel. He left that position to become general counsel of CHEG.

In 2016, he joined Airbnb as general counsel, and after several years became its chief ethics officer. He currently advises Airbnb as well as Upwork, Turo, and Poshmark.

He has written a book called Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution. It provides a six-step process to foster and manage a culture of integrity in organizations.

Enjoy this interview with Rob Chesnut:

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Transcript of Guy Kawasaki’s Remarkable People podcast with the remarkable Rob Chesnut:

Guy Kawasaki:

I’m Guy Kawasaki. And this is Remarkable People. This episode’s remarkable guest is Robert Chesnut.

Robert graduated from the University of Virginia and Harvard Law School. He spent fourteen years in the U.S. justice department, rising to the position of running the major crimes unit. One of the people he prosecuted was Aldrich Ames, the CIA employee who was a double agent for Russia.

Next, he moved west and became eBay’s third attorney and, eventually, the senior vice president of the trust and safety department. In 2008, he joined Live Ops as general counsel. He left that position to become general counsel of CHEG.

In 2016, he joined Airbnb as general counsel, and after several years became its chief ethics officer.  He currently advises Airbnb as well as Upwork, Turo, and Poshmark.

He has written a book called Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution. It provides a six-step process to foster and manage a culture of integrity in organizations.

I’m Guy Kawasaki. This is Remarkable People. And now, here is the remarkable Robert Chesnut.

Guy Kawasaki:

How can we possibly expect people to embody intentional integrity when they hear stories like, “High-tech general counsel dates someone in his department, has a child by her, leaves her, then marries somebody else in the department. High-tech executive gets accused of sexual harassment, leaves the company with about $100 million.” How do you think people are going to interpret that as they need to have integrity?

Robert Chesnut:

We don’t have as many role models as I would like. You didn’t make those up, those were all real stories. The challenge, of course, is that leaders are the ones who influence others. People look to leaders as an example and to set the tone, and when there are failures in leadership like that, it really sets things back, Guy, but look, I also think that people are sick of it.

The examples you’ve given are all big stories in the news, and those folks have been roundly criticized, rightly so, for the way that they behaved. I think it’s a sign really, the world is sick of that sort of behavior. They want better from companies. They want better from leaders, and I think that’s the way the world’s moving right now, which is a good thing.

Guy Kawasaki:

But if you are a rank-and-file employee in those companies, I mean, how would you conclude, “I’m sick of this and it’s got to change,” as opposed to, “It’s different at the top, there are different rules.”

Robert Chesnut:

There can’t be different rules at the top. In fact, leaders are the thermostat for a company when it comes to integrity. A thermometer takes the temperature of a room, but a thermostat sets the temperature, and leaders by their words and their actions create a climate that everyone in the company lives in.

So you’re right, if people at the top of the company are acting this way, you can’t expect anybody else in the company to act with integrity. People are going to follow that lead and they’re going to assume that integrity doesn’t matter.

What we need are leaders who, by words and actions, have that thermostat dial in a different place. They openly talk about why integrity matters. Integrity is contagious. There’s actually science behind it, and when leaders act that way, it has a contagious effect on the entire company.

Guy Kawasaki:

For the positive or the negative, you’re —

Robert Chesnut:

For the positive or the negative and leaders have to understand that’s part of their job description. I think integrity is part of the job description for every leader. They have to understand that like it or not, people are watching the way that they behave at company off-sites, the way they’re handling casual meetings, the casual interactions in the hallways, the way that they make business decisions and the things, the calculus that they make in these decisions, people are watching.

Like it or not, they’re going to follow that example, not necessarily follow it– integrity is a lot about rationalization. Can you rationalize what you’re about to do and still feel good about yourself? And it’s so easy to rationalize bad behavior when you can look at a leader and say, “Well, they’re doing it, they’re acting that way, so it must be okay.”

Guy Kawasaki:

You’ve been at the top of very large organizations, and the examples that I cited are not examples from companies that are stupid. Some of them, it requires a PhD to be a receptionist at. Can you explain to the average listener of a podcast, how is it that the board or the executive team decides to not punish a person, let them go out with their options, let them have this enormous severance package.

Why does that happen? Why don’t they take a stand? Or is it because they’re afraid of a wrongful termination lawsuit, which may cost more than what they know they should do? Or are they just so corrupt now, they can’t even see black and white?

Robert Chesnut:

I don’t think it’s a corruption issue, Guy. I think it’s more a matter of they want the problem to go away. They want it to disappear and the best way to make it disappear is just say, “There’s the door, get out. Yeah, take your money, because we know if we fight you on these sorts of things, we’re going to be in court and it’s going to drag this out. There are going to be newspaper stories going on for the next two years. We just want to get this behind us.”

And so that’s why I think so many of these things are handled in a way, frankly, that I think is really poor. But I think from a company’s perspective, they want it to go away quickly. They want it to just disappear.

Guy Kawasaki:

Are they “right,” in that if you view your responsibility to the shareholders, it is better to pay somebody off, pick a number, $100 million, than to drag this out, which may affect the brand of the company. Are they, in a sense, fulfilling their fiduciary responsibility?

Robert Chesnut:

I think if they’re only looking at the shareholder as the only party to which they have responsibility, then you can make that argument. I think what we’re seeing though, Guy, is a movement in the world to make companies responsible to a broader group of stakeholders.

So in Airbnb, for example, we always say that we have five stakeholders, not just shareholders. We owe something to employees. We owe something to our hosts and our guests. We owe something to the world at large, frankly.

So we would make decisions based on the fact that we owe an obligation to all these different parties. When it comes to bad behavior, I think we owe it to all the employees to stand up and say, “This sort of behavior, particularly at the top, isn’t going to be tolerated.” It can’t be seen as being rewarded in any way, and frankly, even a larger obligation to the world.

At some point companies have got to stand up and say enough of this, the people that are going to behave this way, there need to be consequences for their actions. I think that’s the way more and more companies are starting to look at this now. It’s bigger than just a strict financial decision. It’s broader than that. More important than that.

Guy Kawasaki:

So you think that other large companies could come to this realization as opposed to, “Well, look at that other company that does no harm, they just spent $100 million and the problem went away. Why don’t we do that too?”

Robert Chesnut:

Well, one thing, Guy, is the problem doesn’t just go away. You and I are still talking about it. The articles are still out there, and, by the way, at those companies, what did the employees do? The employees started to walk out. They’re organizing walk-outs and protesting over it.

I think in the old days, it used to just go away but we live in a world now where employees want to work at a place that they’re proud of, and when my dad went to work, those are the sorts of problems that got swept under the rug. Nobody wanted to talk about it.

Today when this sort of thing happens, employees are blogging about it. They’re tweeting about it. Susan Fowler’s blog posted Uber’s a good example of that. They’re going out and they’re putting pressure on boards.

So I think what we’re seeing really is an evolution in the fact that consumers want better from companies, employees want better from companies. They’ve got a much bigger voice now than they ever had before and companies are learning that they’ve got to make an adjustment.

Stuff doesn’t get swept under the rug anymore. Integrity used to be doing the right thing even when no one is watching, well today, everybody’s always watching everything.

Guy Kawasaki:

What will be the tipping point where, if you screw up, you’re fired. You’re not rewarded. It’s what it looks like now.

Robert Chesnut:

We’re actually seeing some things that are different. Look at the CEO of McDonald’s, the CEO of McDonald’s had a consensual relationship with an employee. Gone. The board just made a fast, quick decision, over with.

I think what companies are learning is that sweeping it under the rug is actually causing people to talk about it for years afterwards. Making a quick decision, recognizing, “This is fundamentally wrong, we’re just going to cut on this,” I think they’re recognizing that’s a better way to go. That’s what their employees and what consumers actually want.

Guy Kawasaki:

I know about that McDonald’s case, but I don’t know the resolution. Was he paid severance?

Robert Chesnut:

I don’t believe he got a severance.

Guy Kawasaki:

Which is as it should be.

Robert Chesnut:

It’s as it should be. You know where it starts, it starts at the offer letter stage, and executives get their lawyers in the offer letter and they negotiate a severance upfront and they negotiate the terms of the severance upfront. So that actually makes it difficult when you’re letting someone go because you signed the severance agreement, “If we let you go, we got to pay you a lot of money.”

What we’re starting to see, and this is something that I was doing when I was the general counsel, when I’m negotiating those severance clauses upfront, I’ll negotiate misconduct clauses, so that if we are letting you go as a result of misconduct, then you lose the severance.

I would be very strict about that, and this is something we would not take out of an agreement. I might agree to go to arbitration over whether there was in fact misconduct, but I wouldn’t give in on that and I think it’s important that in your rush to hire an executive, you don’t just agree to all the terms that their lawyer wants. You think about what might go wrong.

Guy Kawasaki:

I hope that everybody listening to this says, “That is a really good idea. This severance clause is going to have a thing that if you screw up, all bets are off.”

Robert Chesnut:

And anybody with integrity shouldn’t have a problem with a clause like that. They all recognize…

Guy Kawasaki:

Absolutely.

Robert Chesnut:

They’ll recognize, “Look, if I screw up, then I shouldn’t be walking out with $1 million. I’m not entitled to it and it puts the company in a bad position.”

But there’s another thing that I recommend companies do and it’s something that we adopted at Airbnb that is part of a growing trend now. We just made a policy at the company that we would not require an NDA when we settle a matter, a misconduct matter.

A lot of times when you’ve got a victim of sexual harassment, what do you see? The company writes them a check and they say, “We’re going to give you this check, but you’re going to have to agree not to talk about it. You’re going to have to remain silent.” And then everybody’s quiet.

Then this non-disclosure agreements, those NDAs, they enable the bad behavior to continue. The person can keep going on because no one knows about what they did before. So we just made a decision, “We’re going to take a stand on this. We’re not going to agree to any non-disclosure agreement when we’re settling a misconduct case. And if a victim is entitled to money, they only get the money, and if a victim wants to talk about what went wrong, yeah, that may make it a little messy in the short term, but in the long run, no one will be able to accuse us of hiding anything.”

In the long run too, the world will know what happened and that will help prevent future misconduct. So I think lawyering like that, where you just make a policy upfront and stick by it, can prevent a lot of these problems.

Guy Kawasaki:

Are you the only company in America that has done that?

Robert Chesnut:

No. And this is something that the federal government has gotten involved. The federal government actually now will make settlement agreements. They’re not something that you can count as a business expense if it’s got an NDA. So now there’s some fines…

Guy Kawasaki:

What?! What?!

Robert Chesnut:

Yeah. There’s actually under IRS laws, the money you pay out, it’s not going to be something that you can deduct as a business expense if there’s a non-disclosure agreement that’s included in there. And by the way, there are other companies that, particularly now, may be encouraged by the IRS rules are following the same path.

Guy Kawasaki:

So a company is paying in after-tax dollars, basically.

Robert Chesnut:

If they want an NDA in the agreement, that’s right.

Guy Kawasaki:

And what enlightened person put that through Congress?

Robert Chesnut:

Isn’t that incredible? Well, somebody slipped that in and I have no idea who did it, and-

Guy Kawasaki:

Was Mitch McConnell in Kentucky that day. How did that happen?

Robert Chesnut:

He must have taken the day off. I don’t know how this fell through, but I think-

Guy Kawasaki:

Maybe he was helping his wife prep for her interview!

Robert Chesnut:

And in fairness, Guy, I think, I believe the state of California may now have a law that bans them in sexual harassment cases, particularly in sexual harassment cases, NDAs are no longer allowed. We looked at it just in sexual harassment cases and said, “What about a discrimination case? Why should that be any different?”

So that’s why we decided to ban them more broadly, but in some states now, and I’m pretty sure California is one of them, they are banned by state law in sexual harassment matters. So we’re seeing the world’s moving, not as fast as I think you and I would like, but it’s definitely moving.

Guy Kawasaki:

Now, could that have a totally unintended effect of now victims will not get paid because companies are going to say, “We’re not going to get what we used to get, which is an NDA, your silence, so why should we pay you? We’ll just take the heat and save the $5 million”?

Robert Chesnut:

Maybe the way it should be done is the matter ought to be aired out, and what we would do for victims of sexual harassment, in many cases, companies tell you that you must arbitrate these matters. They’ve got to go to mandatory arbitration. The problem with mandatory arbitration is that it’s quiet. The proceedings are secret and you never hear what happens.

What we decided to do is we’ll give the victim a choice. So the victim can choose whether to go to arbitration or to go to court. So no longer is a company that follows this path going to be able to push something into a secret, quiet proceeding and just have it go away.

You’re right, maybe the fact that this can come out might cause companies to fight them a little bit harder. I don’t know, but I think, in a lot of cases, the countervailing consideration is embarrassing for a company.

Companies don’t want this sort of thing to drag on and on, and what I found with victims, victims just appreciate the fact that you’re not muzzling them. They just feel respected when you look them in the eye and say, “Well, you were wronged here. We feel terrible about it. Here’s the financial settlement that we’ve negotiated. If you choose to talk about it, you may do so. We’re not going to stop you, we’ll respect that.”

We actually, I think, find that the victims respect being treated that way and are less likely to want to make a huge fuss, than if they feel that they were being muzzled unfairly.

Guy Kawasaki:

Now I’m not sure I’m going to use this question in your answer, but I’m just so curious, okay? So let’s just say hypothetically, that there is someone who’s in the highest political office in your country, clearly someone who does not have integrity, it’s just postulate that assumption, nobody questions that this person does not have integrity.

Robert Chesnut:

Even their support. Even that person’s supporters.

Guy Kawasaki:

Even that person’s wife and kids. Everybody. And now the CEO of your company is shown showing that person around the factory at the white house, having a business lunch palling around, one argument would be his responsibility is to the shareholders and if palling around with this person and showing him the factory means that you’re not on the Chinese list for tariffs, it means that the U.S. government can still buy your products, he’s doing what he has a fiduciary responsibility to do, which is suck up to the president. That’s one argument.

The other argument is how can the leader of our company be sucking up to someone who has no integrity? So what’s the answer here?

Robert Chesnut:

I think it’s the latter. My mom used to tell me, “You can tell a lot about a person by the company they keep,” and I think that’s true of leaders, and I think a leader of a company that pals around with someone like that, I think diminishes themselves. They diminish themselves in the eyes of their employees and in the eyes of consumers.

Look, employees have a lot of choices about where they want to work and they’re far more mobile than they used to be. Consumers have a lot of choices. We live in an age of conscious consumerism where consumers now, the data demonstrates, that if they are doing business with a company, they want that company’s business values to be aligned with their own personal values and if they’re not, they’ll move their business.

So I think a CEO has got to be careful and understand that there may be negative consequences and they may get on that particular trade association, but there may be more longer-term consequences to behaving like that. The CEO of Goya Foods came under a lot of fire last year for a close relationship with our former president, and led to some significant boycott of the product simply because consumers felt like, “Well, this is a brand that appeals to the Hispanic people, and yet we have a president who has made so many disparaging remarks about the Hispanic people. This doesn’t feel right, and therefore I’m not buying that product anymore.”

Guy Kawasaki:

I’ll tell you, personally, I no longer will use Uber. After I heard those stories and saw that, now, maybe I’m not being fair because there’s another side to it. Who knows, but well, I’m a Lyft kind of guy now, I don’t use Uber.

Robert Chesnut:

More and more people are just like that now, Guy. People see something about a company, and you’re right, maybe it might not be entirely fair, although I think, in a lot of cases, people are considered about this. They read. The amount of information that’s available to all of us now, compared to when I was growing up is incredible. They read, they make decisions about who they do business with based upon what they read. And I think that’s a good thing.

Guy Kawasaki:

Now, a lot of our talk has been about the role of the CEO and I am interested in this concept: Is the creation of a chief ethics officer a good thing? Because it shows concern, it shows effort, it shows whatever, or a bad thing because now the CEO, maybe the GC, maybe the chief HR officer is now saying, “Oh yeah, ethics, we got that guy. We got that girl on board, check the box. Chief ethics officer. Done.”

So, I mean, shouldn’t the CEO be the chief ethics officer.

Robert Chesnut:

Yeah. I think the answer to your question is it can be… The answer is yes, it can be both of those things. And you’re right, the CEO should be the chief ethics officer in a sense, because everything starts at the top at a company and if the CEO doesn’t have integrity, then you can be sure, frankly, that that’s going to spread throughout the entire company.

The response to though is that ethics and integrity in a company requires a lot of intentional work. Let me give you an example of a few things that a chief ethics officer can do.

If there is someone in the leadership team, one of the top leaders in the company whose job it is to instill integrity into the culture and to be intentional about it, that’s a voice in meetings that has a particular perspective and that’s all they’re thinking about, right? And so sometimes when you get caught up in the rush of business and money, having someone in the room who’s always thinking about it solely from the perspective of what has integrity and what’s right, can be really valuable.

Another aspect to it is if there’s someone at the top of the company, in the leadership role, they can do things like be at orientation every week, be a speaker to the new employees and talk about why integrity really matters at a company. You need a senior voice doing it, because they won’t have credibility if it’s done by a mid-level HR manager.

But if that person is talking at orientation, they’re going around to the different offices and doing lunch talks. They’re talking about process that companies can follow when making decisions to ensure that integrity is followed. That’s a full-time job, but it is only, I think, valuable if the person sits at the senior leadership table, and if the rest of the senior leadership team is bought in. You can’t have one chief ethics officer and nobody else.

I used to say I wanted 5,000 chief ethics officers. I want everybody thinking about it when they go to work during the day. I want everybody to feel like it’s a little bit of their responsibility, and maybe one person where that’s all they’re thinking about and ensuring that that thermostat is in a good place.

Guy Kawasaki:

I think you could make your very strong argument there about chief “anything” officer, right? So if you have a chief innovation officer, well, theoretically, everybody should be thinking about innovation. If you have a chief culture officers, theoretically, everybody should be thinking about culture, not just the person ordering the ping-pong tables. So I hear you. I have a great appreciation for the concept of chief ethics officer now.

As a person listening to this, do you have any tall-tale tells about, “Oh shit, I am not a person with integrity.” How do you self-diagnose which side of the line you’re on?

Robert Chesnut:

The issue usually is not someone saying, “Oh no, I don’t have integrity.” Usually the problem, Guy, is people saying I’ve got integrity, right?

I do talks all over the country, really all over the world. And I always ask the question at the beginning of my talk, “Who has integrity? Who in the room has integrity?” Hands go up everywhere. Everybody thinks they’ve got integrity. The challenge is that integrity is a far more complex concept, and people give themselves credit pretty quickly for having integrity.

Integrity is not easy. Integrity, a lot of times is a fluid concept that will depend on your background and your life experiences and your religion, your social circumstances.

What I think people need is they need self-awareness and I think it starts with having a north star. What’s your north star? What do you stand for? What’s your purpose? And articulating it with intentionality. How are you going to act if you are put in a particular difficult situation? Thinking about it in advance and then committing to yourself. “If I were in a room where someone makes a remark that’s racist or where a woman is demeaned, whether a woman is present or not, if I’m in a room, I’m going to be an ally. I’m going to speak up. I’m going to make that decision with intentionality upfront.”

But I think it takes that and it also takes the self-awareness to recognize that integrity isn’t perfection. If integrity meant perfection, none of us would have integrity. I think integrity is about having that commitment to the north star, to the greater values, and having the self-awareness to realize when you’ve gotten off-course so that you can jump back up and get rolling on it again.

Guy Kawasaki:

Are you saying this for the organization or the individual?

Robert Chesnut:

I’m saying it for everybody. I think organizations have to have a north star. They have to have a purpose. Companies purpose is not profit. A company needs a reason to exist, why it’s good for the world. Why what it’s doing has value.

I think all of us as individuals need to have a purpose as well. Studies show that people with a purpose, they actually live longer. It actually provides life with more meaning and richness.

So knowing what you stand for and what you believe in, and actually having a talk with yourself about if “I’m ever put in the circumstance, how am I going to react?” I think it’s really healthy. Again, it’s the notion of intentionality. You’d often, it’s like a garden, a garden doesn’t naturally just turn out to be a wonderful thing. Yes, it takes some work, but if you put some work into it, the results I think are well worth it.

Guy Kawasaki:

Let’s say that I take a customer and his wife out to dinner. So far legitimate, right? We all agree, legitimate.

Robert Chesnut:

Yes.

Guy Kawasaki:

That’s a legitimate function, but I also brought my wife, does the person with intentional integrity only put three quarters of the dinner through because of one quarter is my wife and she didn’t have to be there? Or okay, it could be your husband too because I don’t want to be accused…But your partner, you bring your significant other to a business dinner, four of you, two customers. Customer and his wife –Okay, gosh, you’ve got to be so careful these days– customer and her husband, you and your significant other, do you put it in for three fourths of the meal or all of the meal? Is it that granular?

Robert Chesnut:

I think it has to be sometimes. I think ambiguity can be the enemy of integrity because in ambiguity, people are free to talk themselves into just about anything or rationalize just about anything. So when it comes to that sort of thing, we just simply put it in our expense policy. Specifically, the answer could be either, yes, you can expense it or no, you can’t expense it. What involves integrity is following whatever the rule is.

Look, I can make a perfectly good case that there’s a lot of benefit to bringing along your partner to a business dinner because your business partner’s bringing their significant other, you’re building a personal relationship and that actually adds to the evening. You should do it. I think that would be a great rule.

On the other hand, I think it be perfectly fine to have a rule that says when you’re taking your significant other out on a business function, you must reimburse the company for that significant other’s meal. That’s fine as well. The key is actually be specific and intentional with that.

Guy Kawasaki:

And aren’t there an unlimited number of situations like how would you…no one will turn in expense reports!

Robert Chesnut:

You’d be surprised that I haven’t found that to be a problem. I think that people just want to know what, they just want to know what to do. They’re actually comforted by the fact that they don’t have to agonize over or make the decision.

The decision is made. It’s simple. The rule is there and they like the fact that they’re given that kind of guidance and they’re not put in the position. Situations where, “Oh, just do the right thing, don’t be evil.” Those environments are ones where…

Guy Kawasaki:

Do no harm.

Robert Chesnut:

Do no harm. It’s actually interesting. The science behind this, really intelligent people and really creative people are actually the most prone to integrity issues because they are very cleverly able to come up with great rationalizations for what they’re about to do, why it’s okay. So a lot of times what you simply need are just simple rules, but be clear about what the rules are, and everybody then is freed of the responsibility of trying to rationalize one way or another.

Guy Kawasaki:

Do you think that for many companies, by the time you get an employee or just hired the employee, it’s too late? That this should have happened when they were kids and they were being brought up, or do you think now you can go work for a company that got all these rules and all of a sudden you have intentional integrity.

Robert Chesnut:

Yeah. I think the way you were brought up, your life experiences, certainly have an impact, but science actually shows us that we are all very influenced by our environment, and what we believe others around us are doing.

So if you believe that others around you are acting with integrity, scientifically… There’s a guy by the name of Dan Ariely Elliott at Duke University who’s done a lot of studies of dishonesty, and his work has shown that people are so influenced by their surroundings.

So certainly there are some people who have had such life experiences and the failures, in my mind, in parenting that there’s nothing you can do, they’re going to go in that direction. But that’s not… I think that’s actually a small majority, a small number of people. I think the majority of the people are deeply influenced by their environment.

Guy Kawasaki:

I hope this isn’t a touchy question, but this is the only instance in your book that I was surprised was when you explained that Airbnb has a $200 gift policy, because in my mind, $200 is a lot of money. So my mind immediately went to, “So I go to some travel trade show and I work for Airbnb and I meet the person in charge of, I don’t know, Travelocity reviews and I know I can give him a $200 gift, and that’s okay.”

Robert Chesnut:

Right.

Guy Kawasaki:

Well, first of all, is that okay?

Robert Chesnut:

Well, let’s go back to what the exact rule is. There’s a little nuance to it. You are allowed to give or receive an ordinary business courtesy so long as the value does not exceed $200.

Guy Kawasaki:

Okay.

Robert Chesnut:

So you can’t give someone a puppy for example, right?

Guy Kawasaki:

Okay.

Robert Chesnut:

But what you could do is you could give someone an Airbnb jacket, right? Because branded shirts and hats and the like are an order of business courtesy. You could take someone to a ballgame, right? Not the Super Bowl, but you could take someone to a ballgame because that sort of thing is considered an ordinary business courtesy.

It goes back to a balance, and the point you were bringing up earlier– you don’t want so many rules, but there’s a downside to having too many rules, so you try to draw a bright line, and we drew the bright line at $200 is the absolute maximum you can accept and it should be something that’s typical. It shouldn’t be something that is an unusual gift such that it would cause someone to really question the intent behind it.

Guy Kawasaki:

So could this Airbnb person give a $200 shirt through the Travelocity employee as a gift?

Robert Chesnut:

Yes. Hypothetically, yes, they could and I think the belief of this is that a $200 shirt is not likely to influence the Travelocity employee to do something improper, which is really, I think, a big point behind a lot of the guests.

You’re not trying to bribe someone with the gift, right? It is simply a courtesy and something that’s branded with a company’s logo is, typically, not going to be so valued that it would cause someone to behave inappropriately.

Guy Kawasaki:

Well, I don’t want to go down this rat hole, but-

Robert Chesnut:

Oh, why not?

Guy Kawasaki:

No, but I’m not saying you’re giving them a $200 Airbnb shirt, I’m saying giving them a $200 Ralph Lauren shirt.

Robert Chesnut:

Right. I would not call that an ordinary business courtesy.

Guy Kawasaki:

That finally gets kicked out.

Robert Chesnut:

That’s right. I don’t think that people in business typically give each other an item of clothing from a luxury clothing manufacturer. I think if they were an Airbnb shirt and it was a nice Airbnb shirt, fine.

Guy Kawasaki:

Oh, okay.

Robert Chesnut:

I would draw the line on that.

Guy Kawasaki:

My faith is restored.

Robert Chesnut:

Oh, good.

Guy Kawasaki:

So while we’re on the question about Airbnb, I read something and I intuited this, and I didn’t know this. So are you saying that Airbnb provides two host guests ratings? There’s ratings on both sides, so if I’m about to rent another Airbnb property, that property owner can look back and say, “Guy’s five stars or one star?” Both sides are reviewed?

Robert Chesnut:

This actually has its roots in eBay. The company I first went to work for out of the justice department, and it’s this notion that people ought to be able to rate both sides, honestly and fairly and the way this works is there are blind reviews on Airbnb. So in other words, I write my review of you, you write your review of me and we don’t see each other’s reviews until both reviews are done.

So yes, it’s quite possible that a host might look to see, well, I’m opening up my home now, I’m going to entrust my home to Guy. But before I do that, I’d like to know if Guy has ever trashed someone else’s home at a prior visit, right? Did he leave his surfboard lying in the living room with sand all over the living room?

What it really does it’s this notion of the transparency breeds trust. So by providing transparency into past experiences, look, the vast majority of visits go really well. Most people treat properties with respect and providing transparency that I think helps build trust.

Guy Kawasaki:

Until thirty seconds ago, I didn’t know I was being rated as a guest. So how do I see my cumulative rating to-

Robert Chesnut:

Well, that’s on Airbnb. You can go look at it right now.

Guy Kawasaki:

I can look at my rating on Airbnb as a guest, not as a property owner?

Robert Chesnut:

That’s right. You can go see what other hosts have rated you and what they’ve said about you. And by the way, you can see it right after your stay is over. You do your review, they do their review and then you can go in and read what they say. I’m sure it’s wonderful. I’m sure their say, “Guy was the best guest we’ve ever had. It was such a pleasure. He left flowers on the last day, left our place in a wonderful shape.”

Guy Kawasaki:

The last house that I stayed at, I sent them a list of like twenty things, how you could make your house better and I said, “Don’t take this as a negative because Guy does not leave negative reviews,” because I’m so conscious that I am so visible that if I said, “Oh, they didn’t have a coffee grinder,” that would be blown way out of proportion. “So I’m just telling you this because I just want to improve your property, not because I want to, like…”

Robert Chesnut:

There’s private feedback and public feedback. So probably what you did was you probably left that as private feedback.

Guy Kawasaki:

And I pointed-

Robert Chesnut:

Hopefully they accept it as a gift.

Guy Kawasaki:

I pointed the property owner to a Google doc. I didn’t even know. I didn’t have a private and public review. So anyway, and so I book the property next year and they accept it, so I guess I passed the test.

Robert Chesnut:

Advice from you is probably worth thousands of dollars an hour. I hope they took it as the gift that it was.

Guy Kawasaki:

From your mouth to God’s ears.

Okay. So I’d like to get some real tactical answers here for people who are looking for pragmatic things. So like number one, how do you teach young people integrity?

Robert Chesnut:

I tell a story in the book about my mom, a story that stuck with me. When I was young, I went to a grocery store with my mom and we left the grocery store, we were in the parking lot and my mom looked down at the money in her hand and said, “We got to go back inside.” Of course, I was a kid, I didn’t want to go back inside. I didn’t want to be there in the first place. She said, “No, we’re going back in.” We went back in, she’s talking to the cashier, and I noticed the cashier looked stunned and very happy. And I asked my mom, “Mom, what’s going on?” And my mom said, “The woman gave me too much change. I needed to go back and return it.” And my mom looked at me and said, “That money didn’t belong to me.”

That’s leadership from the top. That’s leading from example and that stuck with me and that’s one of the intentionality things I was talking to you about earlier, Guy. I made the decision from that point on that if ever I were in that position again, I would walk back in the store and I did it as recently as last year when I bought an electric bike and they accidentally gave me an extra bike lock. They were very expensive bike locks. They’re very nice bike locks, and I didn’t realize until I got home and looked in the back and talked to my kids and said, “Let’s hop on the bike. We’re going back.” That’s what we do.

I think that’s what you do as a parent, you look for opportunities to lead by example. And that’s just one example of what my mom taught me, stuck with me my whole life.

Guy Kawasaki:

Was the bike lock an ABUS or A-B-U-S lock?

Robert Chesnut:

It was about eighty bucks. This thing was, it was beefy. But you got what it’s like out there, Guy, it’s tough. Not everybody’s got integrity, and a lot of people like bikes. So I wanted to get a sturdy bike.

Guy Kawasaki:

I have two stories for you. So I’ve often thought that, in that case where there’s extra money in the change, or they put in an extra bike lock, I always say to myself — I guess there’s different levels of integrity, but I always say to myself, “I wonder if this is a Stanford experiment and they’re putting an extra lock in every bag and they just want to see how many people bring back the lock or how many people returned to change. So I don’t ever want to be in the Stanford experiment where I’m the asshole who stole something.” So I realized that’s not the top level of ethics, but that’s my logic.

Robert Chesnut:

Whatever motivates you. So there’s a famous experiment where they took twenty-five wallets, put the equivalent of less than $100 in the wallet and put in ID with a phone number and scattered them lost around, I think it’s about forty or fifty different countries, and then looked, statistically, to see how many wallets got returned and it was really fascinating to see the different statistics that came back from different countries.

Denmark, I believe was number one. They were over eighty percent, and I believe Japan was quite high as well. I believe Peru was under ten percent. I think New York city was fifty-fifty, but the interesting thing about it, Guy, was they experimented with different amounts of money. The more money that was in the wallet, the more likely it was to be returned, which is really interesting.

It’s all about rationalization. Can you rationalize keeping the wallet and still feel good about yourself?

I think it was a small amount of money you could say, “Oh, it’s only twenty dollars, it doesn’t really matter.” But if the dollar amount gets up substantially higher, it’s hard to rationalize that you’re a good person and still keep it. So that’s why the experiment, I think, turned out that way.

Guy Kawasaki:

So if you’re going to lose your wallet, make sure there’s a lot of money in it!

Robert Chesnut:

Put a lot of money in it!

Guy Kawasaki:

I’ll tell you one more story. So when I was a kid, I once went shopping with one of my relatives, I won’t name the relative because it’s going to be– Okay, you’ll all understand. So we went shopping, we went to a hardware store and he needed two screws or something and it’s the little plastic bottle that has forty screws and he opened the plastic bottle and he took the two or three screws and pocketed them and we walked out, and I was shocked. I was literally shocked that one of my relatives– and that story has stayed with me to this day. I think about, “Oh my God, my relative is a shoplifter.” And so it had the opposite effect. Like, I would never.

Robert Chesnut:

That’s good. It’s powerful. Right? And I’m sure the rationalization was, “Oh, it’s only two screws.”

Guy Kawasaki:

Right? “I don’t need the other thirty-eight.”

Robert Chesnut:

Right? “And this store makes a lot of money, it’s only two screws.” There are always great reasons you can come up with and try to justify your behavior, right? But I’m glad it had the opposite effect on you.

Guy Kawasaki:

Yeah. Because it could have easily had the-

Robert Chesnut:

Oh yeah. You could have said, “Oh, well, okay, wow. Awesome.”

Guy Kawasaki:

Yeah. He didn’t get caught, what’s the problem?

Second tactical question: Let’s say I’m the chief ethics officer, GC, VP of HR, or CEO of a company and I’m listening to this and I say, “You know what? He’s right. We need to create a code of ethics.” So how do you, at a tactical level, create a code of ethics? And please don’t say, “You retain McKinsey.”

Robert Chesnut:

Well, too often, that’s the answer, right? You pick up the phone, you call your law firm and say, “Hey, you send me one of those code of ethics over and-

Guy Kawasaki:

The template?

Robert Chesnut:

Yeah. Fill out the name of the company at the top?” And then what do they do? They email it out to everybody in the company and say, “Check a box and say that you read this and you’re going to follow it,” right? Or I’ll give you an even worse example that I’ve seen.

Why pay the law firm? They just go online and copy someone else’s ethics, another company, and they just change out the name of the company at the top. The irony, right? Stealing a code of ethics.

The right way to do it is make it your own, and what we did at Airbnb was we got together a diverse group of employees, and I say diverse and highlight that word because integrity can mean different things to different people, but what I might think is a good rule is one thing, but people from different cultures, different backgrounds and experiences, might disagree with me. And who am I? I shouldn’t be Moses coming down from the mountain with the ten commandments and say, “All right, everybody, Rob’s decided what’s good and right, follow this.” That doesn’t have credibility, and you’re not going to end up with a good set of rules.

We created a diverse team and we made a list of the issues, the standard issues that are covered by code of ethics, and we talked about them and we talked about them in the context of, “What’s right for Airbnb, what does Airbnb stand for? What’s our purpose?” And then, “What should our rules be?” And I’ll give you a quick example.

Let’s go back to the gift policy that you were talking about earlier. We looked at different policies, and one policy was Walmart. Walmart has an approach to gifts. They have a rule about their employees. Their employees can accept nothing. Zero in form of gifts.

If I have been in meetings with Walmart employees where I give them a bottle of water and they pull a dollar out of their pocket. Now, why does Walmart have that rule? Why is Walmart tough like this? And the answer is because Walmart’s got a north star and that is “Low prices every day.” And they believe that if their employees are out accepting gifts, that will ultimately be reflected in the cost of goods and cause the prices to go up. So why would Airbnb be different?

Well, Airbnb is about connecting people. It’s about getting people out from behind their computers, out interacting in the world with people that might be different than they are, and helping them get to know each other on an authentic level. Well, how do you do that? Well, you have to be able to socialize. You have to have a certain amount of give and take where you can buy someone a cup of coffee. So Airbnb goes one road, Walmart goes another road.

Each has integrity, but it is something that is thought about with intentionality by a diverse group of employees, and then when you’ve got a policy that is created by that diverse group, you’ve got an automatic group of evangelists within the company who say, “Oh yeah, let me tell you about the code of ethics. I was on the team that created it. And then it has more credibility.”

Guy Kawasaki:

You have to tell the other story, which is about situational ethics, which is kind of an oxymoron right there, but the story of Amazon in India.

Robert Chesnut:

Yes. Yes. Yeah. Well, it goes back to the having a message from the top that’s clear and consistent, and this is a story told by a friend of mine who was a senior executive at Airbnb, but earlier in his career, he had been a senior executive at Amazon and, at the time, he was charged with opening up Amazon India.

And so he was over in India in front of a large group of employees, talking about the opening of the company, and this friend of mine, this executive, knew how important integrity was and he said, “Look, we’re going to do things the right way as a company and the one thing we’re not going to do is we’re not going to pay for ops. It’s illegal for our company to be involved in that sort of thing, so there will be no payments of any kind to any government official.”

And there was a voice from the back of the room, and the voice was from a woman who said, “You don’t understand,” and there was silence. And the woman said, “Whenever a truck crosses from one state to another state in our country, there’s a checkpoint, and it’s an established practice that if you want to get through that checkpoint with your truck for commercial goods, you’ve got to give a little something, you got to give a little payment to the person at the gate, if you want to get through. If you’re telling us we can’t make a payment like that, we’re not going to be able to do business here.”

And that was what I would call an integrity moment. Silence in the room, everyone’s watching the leaders at the front. My friend looked at her and said, “Here’s what I want you to do. I want you to tell all of the drivers that if they are asked for a payment of that type at a checkpoint like that, I want you to tell him to pull that truck over by the side of the road, take a picture of the checkpoint, and I want you to call me. I will go to the government in India and tell them that we are pulling out of the country if we have to make a payment like that to do business in this country. That is the way we’re going to operate.”

And that’s the way they did it. That’s the way they continue to do it to this day, and my friend talked about that as a very powerful moment in the formation of Amazon India and how business was to be done there, and in hindsight, I think he recognized what a moment it was and feels good about the way he handled it, and I think it’s set the right tone for the company going forward.

Guy Kawasaki:

Let’s say you’re in a country where, at these checkpoints, the army or the police gets payments or you don’t get past the checkpoint, or it could literally endanger your life. Now we’re not talking about the Amazon, we’re talking about Robert or Guy were traveling in some country and you pay the guard twenty bucks and then you either don’t wait for four hours to clear the checkpoint or you don’t get past the checkpoint if you don’t pay the guy twenty bucks. Do you pay or not? Do you take your high-minded, American intentional ethics or do you just pay the guy twenty bucks to get into that country or state or city?

Robert Chesnut:

Yeah. I would never tell anyone to do anything illegal as a business practice. It’s the right course. But if that were in a business context, I would turn around and walk back and get on the next plane out of the country. I simply would.

If it were a personal situation where paying the money were essential for my safety, my personal safety or my family’s safety, I’d pay them up. Of course I would.

Now, would that violate a fundamental concept that I live by? Yes, it would. Would I feel that there was a greater good in that moment? Protecting my life and the life of my family, yes, I would. That’s a great example of how ethics can be challenging.

There are times where you’re put in a dilemma where there is no good option and you may need to do something that violates what you believe in, what you stand for, for something that’s an even higher good. I think that’s a dangerous rationalization, not one that you should go to lightly.

Guy Kawasaki:

Now that you’ve created this code of ethics, what kind of reporting process and enforcement procedure do you put into place? How does that work?

Robert Chesnut:

Yeah. I talk to people at companies, Guy, who say, “Well, Rob, we’ve got a hotline. It’s an anonymous hotline. We hardly ever get any complaints. So we don’t have a problem.” And I actually think that’s the first sign of a problem. I think integrity raises questions all the time.

You can’t be at a company of any size without there being issues that come up from time to time. And the issue isn’t whether the issues are there, the issue is whether anyone’s comfortable raising their hand and asking the question.

A lot of times people are uncomfortable going into hotlines. They don’t want to be a whistleblower. They don’t want to cause trouble. They don’t want to go to legal. Oh my goodness, the worst thing is having to go to the legal floor where all those lawyers are, right? Or go to HR.

Lawyers are scary, they’re not popular. So I think what you have to understand is that people are, by nature for the most part, a loaf to raise these sorts of issues and t’s on you as a leader to create an environment where people are comfortable raising their hand. Where people feel like it’s okay to ask the question, “Hey, I’m worried about this particular supplier.” “I saw something that troubles me,” or, “I’m not sure what the right thing to do is, can you help me?”

Guy Kawasaki:

Who is this person saying this to?

Robert Chesnut:

Right. Well, that’s the thing. You want an environment where people are comfortable saying it to somebody and how you deal with that is important. I’ll give you one example of the ways that one way that we dealt with Airbnb.

We create a program called ethics advisors and it came out of this idea prior to that, you were supposed to go to legal. But I thought, “Well, why does legal own integrity?” That’s almost, I mean, sit back and think about it. You’ve heard the lawyer jokes. I know you would never actually spread a lawyer joke out, but they’re out there.

Guy Kawasaki:

Not me.

Robert Chesnut:

But they’re out there. Why do lawyers have to own integrity? Shouldn’t everybody own integrity? So what we did at Airbnb is we took that group of people that helped us create the code of ethics, that diverse group. Now, there were a couple of people from marketing. There were somebody from finance. There were a couple of engineers. There was somebody from the Paris office, somebody from the office in China and this group became the group of ethics advisors and we gave them training on the code, and then we sent them back to their day job, “Go back and do your day job, but we’re going to tell everybody on your team that you’re an ethics advisor.”

So if you’ve got a question, you can go to the hotline, you can go to legal, or you can ask the person on your team that’s an ethics advisor and then we sat back and watched. Guess where most ethics integrity questions were raised? The hotline, lawyers or the ethics advisors? It was the ethics advisors by a wide margin.

We were getting over 100 inquiries to ethics advisors every quarter. What we learned from this is people are a lot more comfortable talking to somebody they know. If you make something like this easily available, comfortable, where people can go to someone that they trust, someone that’s right there on their team, make it easy, they’re a lot more likely to ask the kind of questions that you need to be hearing as a leader.

Guy Kawasaki:

And this would include sexual harassment?

Robert Chesnut:

So you have an option with anything you do. You could go to the hotline. You can go to HR or legal. You can go and get advice from an ethics advisor. Sexual harassment is something that we thought was so insidious in light of the Me-Too movement that we actually went to a company called Volt, and what Volt does is Volt is a startup –although they’ve grown quite rapidly in the last several years– they make reporting for sexual harassment quite easy through an app on your phone. Employees can download an app on their phone, take notes, private notes about what happens that are time and date stamped, and then do it through the phone app.

They have a feature called Go Together. So a lot of times the Me-Too movement is based on the word too, that is, “I’m a lot more comfortable speaking up if there’s someone else with me, because it’s scary reporting a leader if I’m alone.” So Volt has a feature that you can actually have your report held confidentially until someone else makes a similar complaint against the same person, and if someone else comes against the same person, then both reports go together. So that at least gives you an option where if you’re not comfortable raising it alone.

What you hate to have is a situation where you’re having a problem, five other people in the company are having the exact same problem, but everyone’s afraid. This enables people to actually now go together with their complaint to the company.

So we rolled that out in addition to all of the hotline and all of the other options, and we found that employees really liked Volt. It was a more popular option than the hotline. I think it’s for companies to go out of their way and send a message through a variety of different methods, that the welcome mat is out for this sort of thing.

We care about integrity. You’re not going to be punished for raising something. In fact, if anything, we’re going to call you out and reward you for that kind of behavior.

Guy Kawasaki:

What do you tell the ethics advisor when the ethics advisor learns of a violation? What’s their responsibility?

Robert Chesnut:

Right. Well, their responsibility is to go report it and they, of course, they need to be open with the person that it can’t be a completely confidential situation, but that they are there to help the person guide the person to the person in the company that can actually help them.

And by the way, Guy, what helps in the scenario is going back to the chief ethics officer. When I was the general counsel, before I even became chief ethics officer, I talked openly at orientation about sexual harassment. We talked to people about how this is something that we would not tolerate at Airbnb.

We, actually, as a leadership team at Airbnb, committed to each other that none of us would engage in any romantic relationship of any kind with any employee or any supplier vendor, even a voluntary consensual, and I shared this with everyone at orientation and told them about Volt and the different ways that they could report and it was interesting.

One day, Guy, a woman came up to me afterwards, after one of the orientation sessions, she was in tears and I’m thinking, “Oh no, what did I say? What did I do?” And she said, “Rob, today’s my first day in Airbnb.” This was orientation. “I worked at another tech company, large tech company here in the Valley. My supervisor kept propositioning me. Wouldn’t stop and I didn’t feel comfortable because of other things that had happened at the company publicly. I didn’t feel comfortable reporting it to the company.” She said, “I had to leave my job because this person wouldn’t leave me alone.” She said, “Rob, you have no idea what it means to somebody to hear a leader, one of the top executives at the company coming in live and in-person and saying these things.”

She said, “I know that if I have a similar problem in Airbnb,” she said, “I’m going to come to you.” And that’s what you want. Right? You want to add that element of human authenticity from the leaders about this kind of topic. You want to create an environment where people really do believe that they can come forward and be heard.

Guy Kawasaki:

The Remarkable People podcast is sponsored by the Remarkable Tablet company. The Remarkable Tablet helps you focus– It’s not about checking email, checking social media or surfing the web, it is about focus, taking notes. I ask my guests how they do their best and deepest thinking.

Robert Chesnut:

That’s a great question. I think I do my best thinking when I expose myself to ideas and demonstrate curiosity. I think curiosity to me is one of the most important human qualities and that means sometimes getting out of your comfort zone. I will watch newscasts from broadcast stations that I know that I’m likely going to disagree with, but I’m troubled by a world where half of us are watching one news station and the other half we’re watching a completely different news station, and you’re getting two different versions of the world, and if we are that divided, I don’t think it’s healthy.

So I think I do my best thinking when I’m open and curious about what other people are thinking. And when I expose myself to ideas that I might think I’ll disagree with, but at least I’m hearing them.

Guy Kawasaki:

Well, I hope you enjoy Fox. I am not going to watch it.

Robert Chesnut:

I didn’t say I enjoy it. I said, I think it’s important to expose myself to it and listen to it and at least understand what a lot of people in this country are hearing.

Guy Kawasaki:

Okay. You’re a better man than me, but we knew that going in, who knew ethics could be so interesting. And I hope I asked you questions that not every blogger and podcaster asked you, so you got some…

Robert Chesnut:

You have a great reputation. So going into this, I was kind of interested to see what it would be like. And I’ll tell you, you ask questions, I would say ninety percent of the questions you ask, I haven’t been asked before, and I’ve been doing a ton of these for the last year.

Guy Kawasaki:

Go on the record that I ask better questions than NPR. Just-

Robert Chesnut:

Get the recording going on this, “Guy Kawasaki’s questions were better than NPR’s.” You can run it. And it comes from a chief, a former chief ethics officer. So it’s got to be true, right?

Guy Kawasaki:

That’s worth more than 200 bucks to me!

 

I hope you enjoyed this serious discussion of a serious topic. Robert has shed a lot of light about intentional integrity. I hope you take his lessons, his wisdom, and his perspective and implement them in your companies and your organizations. The world would be a better place.

 

I’m Guy Kawasaki. This is Remarkable People. My thanks to Jeff Sieh and Peg Fitzpatrick for another remarkable episode. My thanks to Doug Erickson for making this interview happen. Finally, my thanks to Luis Magaña for the transcription of this episode.

 

Until next time, wear a mask, get vaccinated, practice social distancing. Mahalo, and Aloha.