The Conscience Code: Lead with Your Values. Advance Your Career.

By G. Richard Shell

The Conscience Code is a practical guide to creating workplaces where everyone can thrive.

Surveys show that more than 40% of employees report seeing ethical misconduct at work, and most fail to report it--killing office morale and allowing the wrong people to set the example. Collegiate professor G. Richard Shell has heard work misconduct stories from his MBA students which inspired him to create this helpful guide for navigating these nuances.

Shell created?this book?to point to a better path: recognize that these conflicts are coming, learn to spot them, then follow a research-based, step-by-step approach for resolving them skillfully.?By committing to the Code, you can replace regret with long-term career success as a leader of conscience.

In The Conscience Code, Shell shares tips and facts that:

• Solves a crucial problem faced by professionals everywhere: What should they do when they are asked to compromise their core values to achieve organizational goals?
• Teaches readers to recognize and overcome the five organizational forces that push people toward actions they later regret.
• Lays out a systematic, values-to-action process that people at all levels can follow to maintain their integrity while achieving true success in their lives and careers.

Driven by dramatic, real-world examples from Shell's classroom, today's headlines, and classic cases of corporate wrongdoing, The Conscience Code shows how to create value-based workplaces where everyone can thrive.

• Language: English
• Publisher: Thomas Nelson
• Release date: Jun 8, 2021
• ISBN: 9781400221141

G. Richard Shell

G. Richard Shell is Chair of the Wharton School's Legal Studies and Business Ethics Department. His books on negotiation, influence, and success have sold over half a million copies in seventeen languages, and his online course on "Success" has reached tens of thousands of people around the world. An award-winning teacher and scholar, Richard led the most recent redesign of the Wharton School's MBA curriculum and helped create its required Responsibility in Business course. He directs week-long workshops on negotiation and strategic persuasion for senior executives.

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Praise for The Conscience Code

"Every organization talks about values. But how can we uphold those values when bosses and peers are behaving badly? The Conscience Code delivers the answer. This powerful and practical book brings the science of persuasion to the problem of doing the right thing—showing leaders at every level how to stand up for their deepest beliefs."

—Daniel H. Pink, Author of WHEN, DRIVE, and TO SELL IS HUMAN

"Leading in the twenty-first century without a conscience is like trying to fly a plane without wings. The Conscience Code shows you how to turn your beliefs into action and take flight."

—Yancey Strickler, Cofounder and Former CEO of Kickstarter, Founder of the Bento Society, and Author of This Could Be Our Future

A must-read in today’s turbulent times. Indeed, the high road is the only road. Richard Shell will help you get there and stay there.

—Douglas R. Conant, Founder of ConantLeadership, New York Times and Wall Street Journal Bestselling Author, Former Chairman of Avon Products, and Former President and CEO of Campbell Soup Company

Shell demonstrates that good ethics is not only good business but is also the foundation for personal and professional success. His real-world examples and research-based observations make this book a keeper for every leader.

—F. William McNabb, Former Chairman and CEO of Vanguard

"Engaging, clear, and practical—The Conscience Code is an outstanding guide to leading and living responsibly."

—Joseph L. Badaracco, John Shad Professor of Business Ethics at Harvard Business School

Jam-packed with real-world examples of values conflicts at work, Richard Shell’s book offers practical career guidance for every ‘person of conscience’ who wants to take action—effectively—on their values. This book is an inspirational, pragmatic handbook for living a fulfilled, values-driven life.

—Mary C. Gentile, PhD, Author of Giving Voice To Values: How To Speak Your Mind When You Know What’s Right, University of Virginia Darden School of Business

"Ethisphere’s research has shown that a value-based approach to business significantly outperforms the competition. Richard Shell’s The Conscience Code provides the roadmap every employee can follow to become a committed champion for that all-important mission. It should be required reading for every global firm seeking to empower its workforce to be a force for good."

—Tim Erblich, CEO of Ethisphere Institute and Former President of NYSE Governance Services

"The Conscience Code offers important advice to leaders facing decisions that challenge their core beliefs. Doing the right thing isn’t always easy. Richard Shell’s examples show us that staying true to one’s values leads to genuine, long-term success."

—Adam H. Schechter, Chairman and CEO of LabCorp

"Think business ethics are purely academic? Richard Shell’s new book The Conscience Code puts this longstanding myth to rest! Reflecting on decades of teaching and consulting, Shell details just how critical moral issues are to successful corporate leadership, organizational culture, business strategy, and negotiation. The Conscience Code is a must-read for all those committed to aligning business with integrity, responsibility, and accountability."

—Larry Zicklin, Former Managing Partner and Chairman of Neuberger Berman

For my late friend and mentor,

Dr. Simon Auster

© 2021 G. Richard Shell

All rights reserved. No portion of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopy, recording, scanning, or other—except for brief quotations in critical reviews or articles, without the prior written permission of the publisher.

Published by HarperCollins Leadership, an imprint of HarperCollins Focus LLC.

Any internet addresses, phone numbers, or company or product information printed in this book are offered as a resource and are not intended in any way to be or to imply an endorsement by HarperCollins Leadership, nor does HarperCollins Leadership vouch for the existence, content, or services of these sites, phone numbers, companies, or products beyond the life of this book.

ISBN 978-1-4002-2114-1 (eBook)

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Epub Edition April 2021 9781400221141

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CONTENTS

Cover

Title Page

Copyright

Introduction: The Conscience Code

Rule #1: Face the Conflict

Rule #2: Commit to Your Values

Rule #3: Know Your Enemy

Rule #4: Summon Your Character

Rule #5: Channel Your Personality Strengths

Rule #6: Leverage the Power of Two

Rule #7: Ask Four Questions

Rule #8: Engage the Decision Maker

Rule #9: Hold Them Accountable

Rule #10: Choose to Lead

Acknowledgments

Notes

Topical Bibliography

Index

About the Author

INTRODUCTION

THE CONSCIENCE CODE

Start where you are, use what you have, do what you can.¹

—Arthur Ashe, tennis champion and social justice activist

I wrote this book to help you deal more effectively with an increasingly urgent problem in professional life: standing up for core values such as honesty, personal dignity, fairness, and justice when the pressure is on to look the other way.

The consequences of getting these decisions wrong can be significant. When a boss or peer pushes you to engage in (or go along with) conduct you know to be unethical or illegal, a misstep can ruin your career—especially in a world where social media opens the doors into every office. And standing by while others engage in sexual harassment or office bullying empowers the wrong people to do the wrong thing, destroying morale and productivity. Finally, your day-to-day tolerance for those who cut ethical corners sets the standard for the normal way to get things done. Remaining silent while a boss lies to a client may be only a small step, but it’s a step down the wrong road. You are letting yourself be led by your fears instead of choosing to lead with your conscience.

How did I come to be concerned enough about this problem to write this book? From a course I created at the Wharton School. As a senior member of the Wharton faculty and chair of its Legal Studies and Business Ethics Department, I led the most recent school-wide initiative to redesign our MBA program. Part of that effort involved combining two short courses, one on business law and the other on business ethics, into a single, longer, required course called Responsibility in Business. Believing I had a duty to lead by example, I volunteered to teach this new MBA class the first time it was offered. Little did I know when I stepped into this classroom how much my students would end up teaching me about the day-to-day ethical challenges that ordinary employees face inside the pressure cooker we call the modern workplace.

Here are just a few of the more alarming stories my students shared in this class:

A young, gay management consultant was propositioned for sex by a client while working on a project in the Middle East. He politely declined, then reported the incident to his project leader (a partner at his firm) and asked for feedback about how he had handled it. His boss responded that he had made the wrong choice and requested that he go back and make the client happy to increase the chances for follow-up consulting business. The young consultant answered with an outraged No—and received a poor performance appraisal when the project was over.

A sales employee at a high-tech startup was pressured to create a list of fake clients, complete with orders from these customers, so the firm’s ambitious founder could reference it in pitches for venture funding.

A private equity analyst watched as her boss blatantly misrepresented the value of several companies in the firm’s portfolio. The firm was raising a new round of investment capital, and the partner did not want to disclose the true state of these poor-performing assets to prospective investors. A week after the new funds were raised, the partner downgraded the value of these companies.

A bond trader joined his peers in routinely lying to customers about the assets backing the debt he was selling. He thought his moral compass would always point him in the right direction, but he found it hard to follow his conscience when everyone around you is breaking the rules. Several senior colleagues on his trading floor were eventually indicted for securities fraud.

Stories like these opened a world of dubious business practices I had only read about. During office hours, I found myself talking with students about the challenges they had faced and their desires to meet the next ones with more courage and confidence. These conversations inspired me to offer help and redoubled my commitment to teaching the Responsibility course. I came to realize I was getting a unique, highly informed window into the world of modern business life for today’s employees. Because many of these students had no interest in returning to their former employers, they were more than willing to tell the unvarnished truth about what they had experienced.

I now understand that my students’ stories are part of a much larger pattern. A recent report published in the Harvard Business Review revealed that roughly 25 percent of employees report pressure² by bosses to behave unethically (or illegally). Based on what my students tell me year after year, I believe this number significantly underestimates the situation. For one thing, it does not include the pressures exerted by corrupt business cultures such as the one the bond trader described above. Many professionals in fast-paced tech and finance industries stop thinking of dubious practices as improper because everybody does it.

Just as concerning, workers are fearful about reporting misconduct they observe in others. According to the Ethics Resource Center, over 40 percent of US workers³ witness unethical and/or illegal conduct on the job in a given year. Other studies have shown that most of this goes unreported and, even when flagged, ends up on the desk of a supervisor who lacks the backbone or motivation to do anything about it⁴. Well-run corporate compliance programs and healthy corporate cultures can reduce this problem significantly, but these are hard to sustain across large enterprises over long periods of time. And too many companies give only lip service to both.

In short, my students are not outliers. They are telling it like it is. But that does not mean they are happy about the situation. They keenly feel the loss of self-respect that comes when they violate their own standards of conduct or stand by as others commit crimes. As their teacher, I try to reinforce how much more satisfied they will feel about themselves and their work if they commit to upholding a very short list of core values.

All my writing and teaching has emphasized in different ways what Adam Smith, the moral philosopher credited with being the founding father of competitive market capitalism, called the profound tranquility that comes from living an honest life⁵. In this book, I advocate for Smith’s point of view. Authentic, lasting success in any profession demands adherence to the highest standards of integrity. When you bring your sense of right and wrong to work, you can enjoy tranquility in that most private of all domains: your conscience.

And while this sounds easy to do when we discuss it in the classroom, I constantly remind my students how hard this can be when the heat is on to make deadlines, please bosses, and fulfill client demands. You must prepare now to meet the challenges to come. To echo the subtitle of this book, I want to help you lead with your values—a commitment that I think will also advance your career.

I have dedicated this book to my friend and mentor, the late Dr. Simon Auster. He was a medical school professor who specialized in patient counseling and mental health. He was a man of impeccable integrity who took me in when I was the age that most of my MBA students are now. He helped me regain my self-confidence when I had very nearly given up on myself. Simon frequently said that, Everyone does the best they can with what they’ve got. He had an enormous amount of wisdom, so his best was quite remarkable. In this book, I’ve tried to give you the best I’ve got by drawing on my students’ reports as well as years of research on workplace misconduct, character, values, and whistleblowing.

My goal: to provide you with a Conscience Code—a set of ten rules to follow as you navigate toward true success in your career.

Full disclosure: without hearing my students’ candid accounts of life on the front lines of business, I could never have understood the breadth of the ethical challenges ordinary professionals face in their day-to-day work. This book is infused with the detailed, moment-to-moment dramas they have shared and the insights these stories have inspired. But when it comes to recounting their stories in this book, I have thoroughly fictionalized their narratives and quotes to protect their privacy and the privacy of their employers. So consider my students’ examples as inspired by what they have told me in confidence rather than as word-for-word accounts. The sole exceptions to this disclaimer are Sarah’s story in the first chapter and Benjamin’s story in the last one. Both of these accounts are factually accurate and presented with permission. But, at my students’ request, they do not use real names.

A final point. Although I am chair of the Wharton School’s department that teaches business ethics, I am an academic outsider to the ethics field. My professional training is in law. I have thus followed my legal training in providing extensive references at the end of the book if you wish to find the source for a point I make in the text. But I have left the details of philosophical and moral analysis to other, more qualified scholars. I thus offer you a practical, down-to-earth guide for confronting ethical challenges at work so you will look back on how you handled them with pride rather than regret.

The pages ahead are filled with moving, sometimes astonishing real-world stories of people facing both ordinary and extraordinary pressures to compromise their values. You will meet business executives, nonprofit leaders, nurses, police officers, soldiers, and lawyers. Some of the examples come from headline-grabbing corporate scandals and some from terrifying moments in history. Many others are everyday examples drawn from the personal and professional lives of my students. You’ll learn about some who failed to stand up for their values and later regretted it, and others who successfully pushed back.

All of these examples—even the ones that Hollywood made into whistleblower movies—involve ordinary professionals trying to get on with the business of life. I have assembled them to help you better understand your own character, values, fears, and personal aspirations. If a given issue is not a problem for you, move on. When it comes to learning about the important things in life, one of my favorite mantras is also one of the simplest: Take what works and leave the rest behind.⁶

RULE #1:

FACE THE CONFLICT

"The world is a dangerous place. Not because of those who do evil but because of those who look on and do nothing¹."

—Albert Einstein

This book began with a story.

The students in my Responsibility in Business course at the Wharton School had an assignment: come prepared to share a value-based personal conflict they or someone close to them had faced at some point in their lives. As class got underway, a student named Sarah (not her real name) raised her hand.

Sarah was a lawyer prior to entering business school. She had been working in the general counsel’s office of a small California company when she was offered a higher-paying associate position in a prestigious Los Angeles law firm. It was, she told the class, her dream job —exactly what she had hoped to achieve with her law degree.

A few weeks after starting, she was approached by a senior partner who asked her to do some research on the Foreign Corrupt Practices Act (FCPA), the major US anti-corruption law. The partner explained that the CEO of a Chinese company (and a prospective new client) wanted the law firm to hire his son for a summer position. The partner was eager to accommodate— landing this client would be very lucrative for her and the firm. But she needed Sarah to investigate if this action would be legal under the FCPA. Oddly, the partner insisted that nothing about this assignment be put in writing. Sarah was not to consult with anyone else at the firm.

Sarah did a thorough job on the research, then met with the partner to explain that, contrary to expectations, there appeared to be substantial legal risk if the partner hired the client’s son. A recent corporate scandal had rocked the financial world when federal regulators fined a major US bank for hiring the sons and daughters of Chinese government officials to smooth the way for future business deals. Although the partner’s case did not involve a government official or a full-time job, Sarah reported that the same FCPA ban on hiring could very well apply. The CEO’s firm had close ties with the Chinese government, and the son would be a law firm employee, even if only on a temporary basis.

After Sarah reported her findings, the partner told her in no uncertain terms that her job was to find some way to make this work. She ordered Sarah to go back and reexamine the cases. Sarah did so, even reaching out (in a roundabout way) to another lawyer known to be her firm’s most experienced expert on the FCPA. But nothing she learned changed her conclusion. She told the partner that her analysis stood: hiring the son could well be illegal. This prompted a furious response from the partner. Her voice rising, she warned Sarah she had one more chance to get the right answer. When Sarah attempted to explain her position, the partner shouted her down. People walking nearby could hear the ruckus and stopped to see what was going on. It now began to dawn on Sarah why she and not the firm’s FCPA expert had been picked for this troublesome assignment: Sarah was a new hire, and the partner felt she could be bullied into compliance. Worse, Sarah feared she was being set up to take the blame if the issue blew up.

Sarah finished her story this way: I was literally shaking when I left her office. I was so upset that I decided to take a walk outside to clear my head. It was lunchtime anyway, so I grabbed my purse and headed out. By the time I finished my second lap around the block, I knew what I had to do. I just kept on walking and never went back. That was the last time I set foot in the place. If this was what the big-time practice of law was about, I wanted nothing to do with it. I figured I might as well go to business school and start over. So here I am.

The class buzzed when Sarah finished. I suspect some of them had harbored fantasies in past jobs of doing exactly what Sarah did, but they had never heard from anyone who had actually done it. I capped off the moment by complimenting her for standing up to her bullying boss, but I noted that a future in big business might be just as ethically challenging as she had found big law to be. Other hands went up, and other stories were shared (some of which you will hear in this book).

After class, I reflected on Sarah’s situation. She was young and smart; she had options. She might have channeled her outrage into a formal complaint against the partner’s behavior, but she probably saw her chances of success as low. She had only been at the firm a few weeks and would be confronting a senior partner who would doubtless deny her allegations. I understood why she headed for the exits.

I have heard enough stories like Sarah’s to make me a sober realist about the professional environments many of our young people experience. I even have a name for MBA students like Sarah: I call them ethics refugees. Unable to stomach what they are asked to do or how they are being treated, they elect to reset their careers by going to graduate school.

From where I stand, I see the best of the current generation demanding more from their working life than money. They want work that means something. But even more fundamentally, they expect their employers to uphold basic values of fairness, honesty, and integrity. I drew a clear moral from Sarah’s sad tale: many employers are falling far short of these standards.

During my years as a business school professor, I have listened to more than my share of pious speeches by business leaders who say that creating a principled culture is Job #1. But unless people step up to demand accountability when bosses or peers violate basic ethical norms, including norms of common decency, talented people will flee when they can and, when they cannot, give far less than their best. Standing up for yourself and your values—following your conscience regardless of your place in the organization—affirms your true character and empowers others to speak. Your voice says to others, I am ready to make a difference. It is an expression of faith that others will do the same thing in moments that matter.

Don’t you hope, when lives are on the line, that you and your family can depend on hospital workers willing to stand up to powerful physicians who put their personal convenience over patient safety? And don’t you want to be on the same team as the honest professionals who call out political corruption, corporate fraud, and sexual misconduct?

I had heard many stories about my students’ ethical challenges at work, but the drama of Sarah’s story combined with her impulsive decision to walk off the job was the tipping point that led to this book. She had all the right ethical instincts but seemed to be missing the tools to hold her boss accountable. In addition, for every employee who has the opportunity to walk away from the type of abusive, unethical behavior Sarah endured, there are hundreds who face the same pressures but feel powerless to push back because their choices are more limited.

I decided to map out a set of research-based rules—a Conscience Code²—to help them (and you) stand and fight. Indeed, that is why I have identified the first rule of this code as Face the Conflict. When you turn toward the problem instead of away from it, you challenge yourself to become part of the solution.

DUTY, CHARACTER, RESPONSIBILITY: IT’S PERSONAL

As you will see throughout the book, this subject is personal for me. I was raised in a Marine Corps family. Duty, character, and responsibility were part of the fabric of our lives.

My father was a decorated World War II veteran and career military officer. By the time I was old enough to be aware of my surroundings, he was the commanding general at the Marine Corps Recruit Depot in Parris Island, South Carolina. Parris Island is one of the two training facilities (the other is in San Diego, California) where raw recruits are brought in and exposed to one of the most rigorous military training regimes in the world, departing three months later (assuming they don’t drop out) as United States Marines. This training uses immersive methods to help recruits acquire habits of character, teamwork, and responsibility. Doing the right thing the right way under the most extreme pressures imaginable is what honor means in this environment.

When he retired from the Marines, my father became the superintendent (i.e., president) of the Virginia Military Institute, the college he had attended as a student. Watching him in both his military and educational careers, I came to understand what duty meant to him: being devoted to his family, taking care of the people he worked with, and serving as a leader for the communities we lived in. He never raised his voice, choosing to lead by his steady example. And my stay-at-home mom, though a foot shorter than he was, stood as his equal partner in every sense. Coming from this family tradition, I have always taken my duties seriously. Part of my personal mission is to influence those I teach and lead to do the same.

This book is an integral part of that effort. I wrote it to prepare you for two of the most difficult challenges you will face in your professional career. First, to do the right thing when bosses or peers want you to do something you know to be wrong. And second, to speak up effectively when you become aware of wrongdoing by others.

Every time you successfully meet one of these two challenges, you inspire others to do the same. You are part of the solution, adding one more brick to the foundations of a society you want to be part of.

IT’S ABOUT MORE THAN WHISTLEBLOWING

When you hear stories about ordinary people who stand up against bad bosses or corrupt organizations, one word generally comes to mind: whistleblowers. For example, Frank Serpico is justly famous for his role as a whistleblower rooting out corruption in the New York Police Department (and for being played by Al Pacino in the hit movie Serpico). Serpico suffered brutal retaliation for his honesty, nearly dying when his fellow officers refused to call for medical help during a shootout in 1971³. The list of famous whistleblowers, and the award-winning films based on their stories, goes on from there.

The whistleblower label is an appropriate term for describing those who expose large-scale wrongdoing at great personal and professional risk. But it can mislead you into thinking that everyday acts of character and courage—such as speaking up against sexual harassment or insisting on honesty with clients and investors—do not really count. In addition, as one of the great whistleblowers of the 20th century, Dr. Jeffrey Wigand, noted, the label carries a negative connotation: whistleblowers are sometimes seen as snitches—people who break faith with loyal colleagues by calling out their bad behavior. Wigand, who was famous for exposing the tobacco industry’s decades-long conspiracy to suppress research linking smoking to cancer, preferred a broader term for those who stand up for their values: "people of conscience⁴."

As this book’s title suggests, I hope you will embrace Wigand’s phrase. Most of us will never meet a whistleblower, but we all know people of conscience we admire as role models. And even if you are never pressed into service to call out high-stakes wrongdoing, you will add huge value to your organization and stand taller in your own eyes as well as the eyes of those who love you by speaking up on behalf of core values that are being ignored. Indeed, these everyday moments are what stop organizational corruption from taking hold, maintaining the honest corporate cultures that make whistleblowing unnecessary. The person of conscience label also captures the importance of standing up for yourself as well as your values. That means speaking out when you experience discrimination and other forms of disrespect.

I’d like to encourage you to adopt this label as a part of your personal identity. People of conscience are those who take actions in everyday professional life that protect and promote the human good. They consistently speak up on behalf of professional standards and personal principles that are important to us all—ranging from scientific and accounting standards to honest dealing and fair play. If you are someday called to be a whistleblower, this book will help you think it through. In the meantime, whenever you face a tough ethical decision, I suggest you focus on your identity as a person of conscience who can tell right from wrong.

The phrase person of conscience also has personal significance to me. Although, as I noted above, I was brought up in the Marine Corps, I took a very different road in my early twenties. I was in college during the Vietnam War era and faced a choice between military service to fight a war I believed was morally wrong, and finding a way to resist. I resolved this dilemma by becoming a conscientious objector—a legal term for a person of conscience who objects to military service on principled grounds. Conscientious objectors serve their country by doing non-military forms of national service, and mine was to work in the most impoverished sections of Washington, D.C., helping relocate poor families who lived in condemned housing. Needless to say, my decision to protest the war caused a split in my family, but my father and I ultimately reconciled our divergent views about war through our mutual respect and love for each other. We understood our duties differently in two very different eras of American history. But at the end of the day, I was my father’s son. I answered my call to duty, just as he had answered his.