Rob Chesnut | Airbnb’s former Chief Ethics Officer on How Smart Companies Can Lead An Ethical Revolution

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Nina: Rob, thanks for taking the time to chat with me! Chief Ethics Officer. As Kanye would say, I don’t know what it means, but it’s provocative! I’d love to start by hearing about this role and the path that led you there.

Rob: I am thrilled to be here Nina, thanks for inviting me to be in such wonderful company — I admire so many of the people you’ve interviewed! As for me, my story is about rules. I've been dealing with rules my whole life. That might sound boring but it’s been anything but!

I started as a federal prosecutor working on all kinds of cases for a decade or so. And then from there I went to eBay, working on regulation and fraud. Moving from federal prosecution to a corporate world might seem like a big switch, but the connecting thread was still thinking about rules: when I first started at eBay, I remember Meg Whitman, the CEO at the time, looked at me and said, "Okay, Rob, your first job is to figure out what we can sell on the site. Alcohol, guns, tobacco — what’s possible.” 

And then from there, I went to Airbnb as their General Counsel. That role was exciting because it was an emerging category at the time and so figuring out the rules — or what they should be, from a point of integrity — was fun (and fascinating!).

I eventually took on the Chief Ethics Officer role at Airbnb, which didn’t mean that I “owned ethics.” I think ethics is built into the job description of being a leader, and integrity is something that we wanted everyone at Airbnb to feel like they were responsible for. My role was a lot about setting up a structure to think about and apply integrity to decision making, and being a communicator — a conscience for the company to keep integrity in the forefront of our thinking.  

So, I'd say the connection across these different parts of my career has been figuring out what the law is. But a connection also is the strong belief that the law is not the standard. Meg used to talk about wanting eBay to be a well-lit marketplace since eBay, not unlike Airbnb, is in the trust business. So, if you want to build trust as part of your brand, I think you have to help people understand that as a company, you're going to do the right thing — you won’t just comply with the standard, you’ll set the standard. 

Nina: Yes, and that’s what your book, Intentional Integrity: How Smart Companies Can Lead An Ethical Revolution, is about. What do you mean by intentional integrity?

Rob: The greatest influence on my life when it comes to integrity was my mom. I tell a story in the book that we were leaving a grocery store when I was young and I distinctly remember we stopped in the parking lot on the way out. My mom was looking at the money in her hands (this was back in the old days when you actually had cash!). She looked at me and said we had to go back inside.

I followed her back in and I remember her talking to the clerk, who looked shocked. When I asked my mom what was going on, she told me we were given too much change and we had to return it because it didn’t belong to us. That lesson stuck with me. I've marched my own kids back into a couple of places where I got too much change or where we didn't get rung up for something at the bottom of the cart.

My mom set the integrity thermostat for me. If a thermometer takes the temperature in the room, the thermostat sets it. And that’s what good leaders do. Like my mom, they set the integrity temperature of a company. So that’s what my book is about.

Nina: What prompted you to write the book? 

Rob: The book actually started with the #MeToo movement. It struck me about four years ago that the world was changing — that for decades leaders were getting away, I thought, with some very bad behavior and it was being swept under the rug.

Alongside that, I saw this rubric of shareholder value taking on almost biblical worship: the idea was that any activity must be good if it was in the name of shareholder value. And I'm thinking, well, shareholder value really is all about the executives getting rich because they're the ones that benefit when the share price goes up.

Excitingly, the world's different now. We're starting to rethink shareholder value. We're recognizing the damage done by companies to our environment, for example, or in factories on the other side of the world when they try to get the cheapest price on something. Instead of causing these huge problems, we need companies to step up and solve some of the world's biggest challenges. I think we've lost faith that government is going to do it and so we're looking at companies to step up. And if they don't step up, we’re seeing signs that people are going to push them hard.

Chief among these protesters will be employees. Previously, employees wouldn't say anything, right? They might’ve seen something they didn't like, but they didn't want to lose their job by saying something. Now, employees are talking to each other on Slack, they're posting online, they're on Glassdoor, they're tweeting. With just one blog, Susan Fowler completely changed the course of Uber. One person. It is pretty amazing! And it's not just employees, it’s consumers too! We're in an age of conscious consumerism where people want to spend money with companies that resonate with them, that hold their values.

And I started seeing also very practical element: that companies operating with integrity actually perform better financially. And they actually, I think, have better cultures, more inspired workers, and customers that are more likely to be loyal to the brand. To me, it's good business and it's the right thing to do.

So, I started seeing all of this about four years ago and it struck me that I'd rather get proactive and prevent the sorts of problems that these other companies were having. And how to do that? I remember phrasing the question to our CEO at Airbnb this way: how do you drive integrity into the culture of a company?

Neither of us knew the answer that day. But my CEO told me to go big. And we didn’t want to just figure it out and keep it to ourselves, like intellectual property — we wanted to share it.

Nina: I love the idea that integrity isn't a trade secret — it’s not IP to be held.  

Rob: Yes, absolutely. Part of it is our CEO's a little different. A lot of people don't realize this, but Brian's parents were both social workers. He grew up in an environment where it was natural and positive to be focused on doing good in the world. Brian didn't go to business school. He never ran a business before. He went to a design school where they teach ethical design, or the idea that good design is more than just something that's pretty or even functional. It has to actually be good for the environment and good for the world. And if it's not, it's bad design, as you probably know from your work at IDEO.

So, I think more than most companies, Brian's focus is on the very, very long term. He calls it an ‘infinite time horizon.’ He's not worried about hitting a quarterly profit number. He wants a company that has a real purpose in the world to do good things. With that as our company's north star, we’re confident it is going to be successful over the long run.

Nina: What are the SparkNotes, if you will, of the book? What do you hope people take away?

Rob: Ha, the SparkNotes — I love that. I'd say there are two main takeaways. Firstly, you have to have integrity both inside and outside of the company. I start with the outside. A company has to define their purpose. What's their north star? What do they exist in the world to do.? Profit is not purpose, profit's a byproduct of purpose. And you have to understand that, once you understand your real purpose, all your decisions have to be looked at through that lens. If you’re doing it right, it should inspire and unlock, not limit! 

Once you're looking at it through that framing, the second big takeaway is that you need to understand your stakeholders and start to measure your success by their success. Companies are really good at measuring the success of their investors, right? There are lots of metrics, every quarter. They're great. But then there is silence when you ask, well, what about your other stakeholders? How do you know they're doing well?

You do what you measure. And so, you need to measure stakeholder success.

Nina: I’d love to talk about that a bit more. One of the frequently discussed problems with stakeholder capitalism as it exists today is that it doesn’t offer a clear compass for how to make decisions in complex scenarios where win-win outcomes for all parties are often impossible. This brings us to the elephant in the room: Not all stakeholders are created equal. Leaders are often forced to pick favorites, and at the end of the day, we know who will always win. What does it actually look like to measure stakeholder success and hold yourself accountable to it?

Rob: It's not that hard. It's not that tricky. It's just different. I think the challenge is that the people running businesses today got taught in business school a particular way to look at the world. But the companies that I think are going to be most successful are going to be able to pivot and actually abandon what they were taught and pick up something new.

Let's take Airbnb. We know how to measure success for our investors. But another important stakeholder is our host. It's not enough that Airbnb be profitable, our hosts have to be successful too. If your hosts are going to be successful, you’ve got to understand, are they making money? Right? If you are taking such a huge percentage of the cost of the rental as your fee (to bring back more profit to shareholders), then hosts are not going to be successful.

Measuring how successful hosts are financially is one metric for that stakeholder group. But what about their general satisfaction? You can simply survey them and find out how happy they are with hosting. What do they like about it? What do they not like about it? Take insurance, for example. One thing we hear is hosts are worried about the risk of people stealing their things and damaging their property. So, we built an insurance program so that they could be successful, and we didn't charge any extra money for it.

Nina: That tangibility is really clarifying. Could you walk us through how you measure success of some of the other stakeholders in the Airbnb ecosystem?

Rob: Sure, let's take another stakeholder. Let's take guests. Your guests are successful if they're having great experiences. I mean, you could make a lot of money for a while just running a short-term rental business. But if over time your guests start having worse experiences and rating their hosts lower and lower while you’re counting your money, you’re ultimately going to fail. So, you need to focus on, are the guests enjoying their experience too?

Or think about communities, another stakeholder. We've heard loud and clear that communities weren't happy with Airbnb, in large part because of parties. So Airbnb has to address the community's needs in dealing with party houses and learn how to predict when something is going to be used for a party and detect it and stop it before it becomes something disruptive to your community. A lot of companies might think, "Well, that's not our problem. We're just a platform." But in reality, the community is an important stakeholder. So you can make sure the number of party houses get reported. There are always things you can do.

Thinking about these kinds of metrics might seem funny because nobody's ever done it before and because each company may need its own unique metrics because each company's stakeholders might be different. So, you can't go look at someone else's metrics and just adopt them like you can for financial metrics. That's okay. It doesn't mean it's bad because it's not standardized. It just means you need a leader that's willing to learn and grow and do things differently.

Nina: If companies adopt different metrics of success for their unique stakeholder sets, doesn’t that make it hard to compare companies and look at their relative success? How do we benchmark in a stakeholder-first capitalism? 

Rob: Sure, it’s a great question. I think that it was easy in the old days because everybody had the same north star and that was profit. You can compare companies, by that north star, really easily. But why does it have to be that simple? Why do you have to compare? You can compare the financials, but I would love people to invest in companies for reasons beyond only the numbers. I'd love for people to start investing in companies because they want to support or vote for in a sense what the company is trying to accomplish in the world.

Nina: From your view at the top, what makes acting with integrity hard?

Rob: I think it's not always clear what's right and what's good. Two ethical, high-integrity leaders could look at the same situation and come to different conclusions. I think that's okay.

I don't believe any one person has all the answers. This stuff is complex. But what I do believe is there's a moral element to navigating this complexity: that the world needs companies to step up and solve problems because the world has some major issues that we need to fix. 

And even if we couldn't always agree on exactly what is 'integrity' and what isn't, what I think we should all be agreeing on is that integrity matters. You might not get it exactly right. There might be very reasonable minds that would disagree on it. But what we can't have is a group of leaders that think that it doesn't matter at all.

Rob Chesnut was most recently the Chief Ethics Officer of Airbnb, Inc., a role he took on in late 2019 after almost four years as Airbnb’s General Counsel. He previously led eBay’s North America legal team, where he founded the Internet’s first ecommerce person to person platform Trust and Safety team. He was the general counsel at Chegg, Inc. for nearly 6 years, and he served 14 years with the U.S. Justice Department, where he prosecuted CIA employee Aldrich Ames for espionage. He is the author of Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution (St Martin’s Press, 2020).