Rob Chesnut: Former General Counsel and Chief Ethics Officer of AirBnb and Author

Here's something remarkable and not in a good way. Disengaged employees cost US companies almost $1.9 trillion a year. That's a lot of zeros. Why? Because when teams lack the right skills, productivity declines, turnover increases, and strategies stagnate. But it doesn't have to be that way. At Project Management Institute, home of the PMP and globally recognized certifications, your people can learn to collaborate, deliver on time, and actually get things the cost of not upskilling way higher than the investment Project Management Institute. Find the answers@pmi.org.

I'm Guy Kawasaki and this is Remarkable People. This episode's Remarkable guest is Robert Chestnut. Robert graduated from the University of Virginia and Harvard Law school. He spent 14 years in the US 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 LiveOps as general counsel. He left that position to become General Counsel of Chegg. 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 How Smart Companies Can Lead an Ethical Revolution. It provides a six step process to foster and manage a culture of integrity in organizations. This episode of Remarkable People is brought to you by Remarkable, the paper tablet company. Yes, you got that right. Remarkable is sponsored by Remarkable. I have version two in my hot little hands and it's so good. A very impressive upgrade. Here's how I use 1. Taking notes while I'm interviewing a podcast guest. 2. Taking notes while being brief about speaking gigs. 3. Drafting the structure of keynote speeches. 4. Storing manuals for the gizmos that I buy. 5. Roughing out drawings for things like surfboards, surfboard sheds, and office layouts. 6. Wrapping my head around complex ideas with diagrams and flowcharts. This is a remarkably well thought out product. It doesn't try to be all things to all people, but it takes notes better than anything I've used. Check out the recent reviews of the latest version. I'm Guy Kawasaki. This is Remarkable People. And now here is the remarkable Robert Chestnut. 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 marry 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.

We don't have as many role models as I would like. You didn't make those up. Those are all real stories. And the challenge of course, is that leaders are the ones who influence others. You to leaders to as an example and to set the tone. And when there are failures in leadership like that, it's, it really sets things back. Guy. But look, I also think that people are sick of it. The examples you've, you've given are all big stories in the news. And those folks have been roundly criticized, rightly so, you know, for the way that they behaved. I think it's a sign really that the world's 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.

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.

There can't be different rules at the top. In fact, leaders are the thermostat for a company when it comes to integrity. And 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 if, yeah, 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.

For the positive or the negative?

You're saying 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 and 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, and 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.

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 severs package. Like, why does that happen? Why don't they take a stand? 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?

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 here, 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.

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?

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, guys, a movement in the world to make companies responsible to a broader group of stakeholders. So at Airbnb, for example, we always said that we had five stakeholders, not just shareholders. We owe something to employees. We owe something to our host and our guest. We owe something to the world at large, frankly. And so we would make decisions based on the fact that we owe an obligation to all these different parties. And look, when it comes to bad behavior, I think we owe it to all the employees to stand up and say, you know what? 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.

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?

Right? Well, one thing, guys. 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, the employer, the employees do. The employees started to walk out. They're organizing walkouts and protesting over it. You know, 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. 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 post at Uber is a good example of that. They're going out and they're putting pressure on boards. 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.

What will be the tipping point where if you screw up, you're fired, you're not rewarded?

Well, because that's what it looks like now. We're sort of. 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. And 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 that's a better way to go. That's what their employees and what consumers actually want.

I know about that McDonald's case, but I don't know. The resolution was he paid severance.

I don't believe he got a severance.

Which is as it should be.

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 up front, and they negotiate the terms of the severance up front. So that actually makes it difficult when you're letting someone go because, you know 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 a general counsel, when I'm negotiating those severance clauses up front, 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.

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.

And what. Anybody with integrity shouldn't have a problem with a clause like that. Absolutely right. They ought to recognize, look, if I screw up, then I shouldn't be walking out with a million dollars. I'm not entitled to it. And it puts the company in a bad position. 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 settled 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, that everybody's quiet. And then those 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, you know what, 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's entitled to money, they ought to get the money. If a victim wants to talk about what went wrong, 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.

Are you the only company in America that has done 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 fine.

Yeah.

What? Yeah, there's actually under the irs, under IRS laws, the money you pay out is not going to, 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.

So a company is paying in after tax dollars basically if they want an.

NDA in the agreement. That's right.

And what enlightened person put that through Congress?

Isn't that incredible? Where did they. What, somebody slipped that in?

Yeah.

And I have no idea who did it.

And was Mitch McConnell in Kentucky that day? What, how did that happen?

He must have taken the day off. I don't know how this got through.

But maybe he was helping his wife prep for her interview.

But 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. And 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 now.

Could that have a totally unintended effect of now victims will not get paid because companies are going to say, well, we're not going to get what we used to get, which is an NDA. You're silenced, so why should we pay you? We'll just take the heat and save the $5 million.

Maybe the way it should be done is that 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. Well, 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, 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. And 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, this is embarrassing for a company. Companies don't want this sort of thing to drag on and on. And you know 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, you know what? 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.

Now, I'm not sure I'm going to use this question and your answer, but I'm just so curious. Okay, so let's just say, hypothet, that there is someone who's in the highest political office in your country, clearly someone who does not have integrity. Let's just postulate that assumption. Nobody questions that this person does not have integrity.

Even their support, even that person's supporters.

Even that person's wife and kids.

Everybody.

Okay? 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 US 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?

I think it's. I think it's the latter. My mom used to tell me you can, 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. And look, employees have a lot of choices about where they want to work. 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 the 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 they may get on that particular trade association, but there may be more, longer, longer term consequences to behaving like that. I think we saw this. By the way, I know 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.

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 you know what? I'm a Lyft kind of guy now. I don't use Uber.

More and more people are, 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 considerate 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.

Now, a lot of our talk has been about the role of the CEO and I am interested in this concept. Like, you know, 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 gal on board.

Check, check the box.

Okay, Chief Ethics officer done. So I mean, shouldn't the CEO be the Chief Ethics officer?

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 this 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 a 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. 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 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.

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 greater appreciation for the concept of chief ethics officer. Now as a person listening to this, you know, do you have any tell tale tells about oh shit, I am not a person with integrity. I mean how do you, how do you self diagnose which side of the line you're on?

You know, 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, your life experiences, 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 remember 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 up front. 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 and 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. Get rolling on it again.

Are you saying this for the organization or the individual?

I'm saying it for everybody. I think organizations have to have a North Star. They have to have a purpose. Companies. Look, 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. And look, 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 this circumstance, how am I going to react? I think is 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. It has to take some work. But if you put some work into it, the results, I think are well worth it.

Let's say that I take a customer and his wife out to dinner. So far, legitimate, right? We all agree legitimate. 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 one quarter is my wife and she didn't have to be there. Or okay, it could be her 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, no customer and his wife. Or. God, you gotta be so careful. Customer and her husband, you and your significant other. Do you put it in for 3/4 of the meal or all of the meal? Is it that granular?

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 in our expense policy specifically. And 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 center. 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. And I think that would be a great rule. On the other hand, I think it'd 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 about it.

And aren't there an unlimited number of situations like, how would you. No one. No one will turn in expense reports.

You'd be surprised. 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's 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 were ones where, do no harm, 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. 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.

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 and they got all these rules and all of a sudden you have intentional integrity?

I think the way you were brought up, your life experiences and the like 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 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 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. I mean, a small number of people. I think the majority of people are deeply influenced by their environment.

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, right? Well, is that. Well, first of all, is that okay? I mean.

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

Okay.

So you can't give someone a puppy, for example. Right. But what you could do is you could give someone an Airbnb jacket. Right? Because branded. Branded shirts and hats and the like are an ordinary business courtesy. You could take someone to a ball game, Right? Not the super bowl, but you could take someone to a ball game, because that sort of thing is considered an ordinary business courtesy. It goes back to a balance. In the point you were bringing up earlier, you don't want so many rules. 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.

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

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 gifts. 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. To behave inappropriately.

Well, I don't want to go down this rat hole, but why not? But, no, but, no. But I'm not saying you're giving them a 200 Airbnb shirt. I'm saying you're giving them a 200 Ralph Lauren shirt.

I would not call that an ordinary business courtesy.

I don't think that's how that gets kicked out.

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, it was a nice Airbnb shirt.

Fine.

Oh, that would be how I would.

Draw the line on that.

My faith is restored.

Oh, good.

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 to hosts guest ratings? There's ratings on both sides. So am I. If I'm about to rent another Airbnb property, that property owner can look back and say, guy is five stars or one star. Both sides are reviewed.

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 they're 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, what is. You know, this. I'm opening up my home now. I'm going to entrust my home to Guy. Before I do that, I'd kind of like to know if Guy has ever trashed someone else's home in a prior visit. Right. Did he leave his surfboard lying in the living room? Sand all over the living room. And that way a host can what it really does. It's this notion that transparency breeds trust by providing transparency into past experiences. Look, the vast majority of visits go really well. Most people treat the properties with respect, and providing transparency into that, I think helps build trust.

Until 30 seconds ago, I didn't know I was being rated as a guest. So how do I see my cumulative rating to that's on Airbnb?

You can go look at it right now.

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

That's right. You can go see. Well, 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 they're saying Guy was The best guest we've ever had. It was such a pleasure. He left flowers on the last day and left our place in wonderful shape.

The last house that I stayed at, I sent them a list of, like, 20 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, you know, whatever.

There's private feedback and public feedback. So probably what you did was you probably left that as private feedback. Hopefully they accepted as a gift, you know, feedback. Yes.

I pointed the. I pointed the property owner to a Google Doc. I didn't even know. I didn't know about private and public reviews. So anyway, and so I booked the property next year and they accepted. So I guess I passed the test.

Well, you know, advice from you is probably worth thousands of dollars an hour. I hope they took it as the gift that it was right. I, I.

From your mouth to God's ears. What can I. 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?

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 were. 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. 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 those 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 for this. And I didn't realize until I got home and looked in the back and I talked to my kids and said, let's hop on the bike. We're going back. That's what we do. And 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 how what my mom taught me stuck with me my whole life.

Was the bike lock an abuse or abus lock?

It was about 80 bucks. This thing was. I mean, it was beefy, but you know what it's like out there, guy. It's tough, got integrity, and a lot of people like bikes. So I wanted to get a sturdy bike.

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, not, 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 block or how many people return the 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, you know, the top level of ethics, but that's my logic.

Whatever. Whatever motivates you. There's a famous experiment where they took 25 wallets, put the equivalent of less than a hundred dollars in the wallet, and put in ID with a phone number and scattered them lost around. I think it was about 40 or 50 different countries. And then look statistically to see how many wallets got returned. And it was really fascinating to see the different statistics that came back from different, different countries. I believe Japan was number one. Well, you know, Denmark, I think Denmark, I believe was number one. They were over 80%. And I believe Japan was quite high as well. I believe Peru was under 10%. New York, I think New York City was 50, 50. But the interesting thing about it, guy, was the more 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 if it's a small amount of money, you can say, oh, you know it's only $20. 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.

So if you're going to lose your wallet, make sure there's a lot of money.

Put a lot of money in it.

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 all understand. So we went shopping. We went to hardware store, and he needed two screws or something. And you know, it's a little plastic bottle. It has 40 screws. And he opened the plastic bottle and he took the two or three screws and pocket of them. We walked out. And I was shocked. I was literally shocked that one of my rel. And that story has stayed with me to this day. I think about, oh, my God, my relative is a shoplifter. So it had the opposite effect. Like, I was never.

But I'm sure the rationalization was, oh, it's only two screws.

Right. I don't need the other 38.

Right. And this store makes a lot of money. It's only two screws. You know, there are always great reasons you can come up with to try to justify your behavior. Right. But I'm glad it had the opposite effect on you.

Yeah. Because it could have easily had the.

Oh, yeah, it could have. Okay. Wow. Awesome.

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, CEO of a company. And I'm listening to this and I say, you know what? But 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.

Okay, you know what? 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 fill out the. Yeah, fill out the. Fill out the name of the company at the top. And then they. Then what? 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, right, and they just change out the. Change out the name of the company at the top. The irony, right, of stealing a code of ethics, you know, the right way to do it is make. Make it your own. You know, what we did at Airbnb was we. 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. You know, 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 saying, 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 the 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 this rule? Right? Is Walmart. Why is Walmart tough like this? And the answer is, because Walmart's got a North Star, and that is low prices for every. The 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 couple calls 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.

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.

Yes, yes. Well, it goes back to 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 bribes. 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 full of 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. That was what I would call an integrity moment. Right? 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 sort of, that type at a. At a checkpoint like that, I want you to tell them 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, what a moment it was and feels good about the way he handled it. And I think it set the right tone for the company going forward.

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. We're traveling in some country and okay, you, you pay the guard 20 bucks and then you, you either don't wait for four hours to clear the checkpoint or you know, you don't get to pass the checkpoint if you don't pay the guy 20 bucks. Do you pay or not? Do you, do you take your high minded American intentional ethics or you just pay the guy 20 bucks to get into that country or state or city?

Yeah, I would never tell anyone to do anything illegal as a business practice is the right course. I mean, if that were in a business context, I would turn around and walk back and get on the next plane out of the country. If getting into 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, or my family's safety, I'd pay the money, of course I would. Now, would that violate a fundamental concept, you know, 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. That's a great example of how, look, ethics, 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 and 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 light.

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?

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. And a lot of times, people are uncomfortable going to hotlines. They don't want to be a whistleblower. They don't want to cause trouble. Right. They don't want to go to legal. Oh, my goodness. The worst thing is having to go to the legal floor, you know, where all those lawyers are, right? Or go to hr. Lawyers are. Are. Are scary. They're not popular. So I think what you have to understand is that people are, by nature, for the most part, loathe to raise these sorts of issues. And it'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. Me, or I'm not sure what the right thing to do is. Can you help me?

Who is this person saying this to?

Right. Well, that's the thing. You want an environment where people are comfortable saying it to somebody. And how you. How you. How you deal with that is important. I'll give you one example of the way that. One way that we dealt with it at Airbnb, we created a program called Ethics Advisors. And it came out of this idea. Prior to that, you're supposed to go to legal, right? But I thought, well, why is legal own integrity? That's almost. You know, when you sit back and think about it, you've heard the lawyer jokes. I know you. You would never actually spread a lawyer joke, guy.

But they're out there, not me.

They're ugly, but they're out there. You know, lawyers. 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. 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. 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. 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. 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 corner. Well, 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.

And this would include sexual harassment.

So you have an option with any, with anything you do, you can go to the hotline, right? 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 MeToo movement, that we actually went and we went to a company called Vault. And what Vault does is Vault 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 happened that are time and date stamped, and then do it through the phone app. And they have a feature called Go Together. So a lot of times the Me Too movement is based on the word to 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 Vault has a feature that you can actually have your report held confidentially until someone else makes a similar complaint against the same person. 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 Vault. It was a more popular option than the hotline. I think it's on companies to go out of their way and send a message through a variety of different methods that the welcome out is at the welcome ad 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.

What do you tell the ethics advisor? When the ethics advisor learns of a violation, what's their responsibility?

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 this 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 Vault and the different ways that they could report. And it was interesting. One day 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 right? And she said, rob, today's my first day at Airbnb. This is 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 at Airbnb, she said, I'm going to come to you. And that's what you want, right? You want. You want to add that element of human authenticity from the leaders about this kind of a topic. You want to create an environment where people really do believe that they can come forward and be heard.

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.

That's a great question. I think I do my best thinking when I expose myself to ideas and demonstrate curiosity. I think, you know, 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 are 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, well, I.

Hope you enjoy fox. I'm not gonna watch it.

I didn't say I enjoy it. I said that 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.

Okay, you're a. 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, and not every blogger and podcaster asked you, so we got some.

You. You're. You. You know, you have a great reputation. And so I. Going into this, I was kind of interested to see what it would be like. And I'll. I'll tell you. You ask questions. I would say 90% of the questions you ask, I haven't been asked before, and I've been doing a ton of these for the last year.

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

You want me to get. Get. To get the. 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. It's got to be true, right?

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 C. And Peg Fitzpatrick for another remarkable episode. My thanks to Doug Erickson for making this interview happen. Finally, my thanks to Louis Magana for the transcription of this episode. Until next time, wear a mask, get vaccinated, practice social distancing. Mahalo and aloha. This is remarkable, people.