Former Shell executive weighs in on ethical leadership

Sir Mark Moody-Stuart started his career at Shell in 1966 and eventually advanced to a 10-year tenure as managing director of the Royal Dutch Shell Group starting in 1991. That would put him in the MD role during the tragic execution of Ken Saro-Wiwa. Suffice it to say, he has witnessed a lot of change and has several stories to share — which is why Mark put pen to paper for his book "Responsible Leadership: Lessons from the Front Line of Sustainability and Ethics."

I had an enjoyable Skype conversation with Moody-Stuart while he was on holiday in the Lake District. He remains active in sustainability circles as the vice chairman of the UN Global Compact.

Ellen Weinreb: What led you to write this book?

Moody-Stuart: I have been fortunate enough to experience the developments of many countries over the past 50 years. The countries and companies in which I worked faced a lot of challenges — corruption, autocratic rule, human rights problems, environmental challenges, reputational challenges, industrial safety. I think some of those examples of what happened and how we handled them would be useful for business students and people in companies facing similar challenges.

I also hope that civil society and young people anywhere will see that business is not just about making business — although that's obviously an essential element. But it involves some really interesting and worthwhile challenges which are worth discussing.

Weinreb: What makes a leader "ethical"?

Moody-Stuart: I think there are universal values — common norms of integrity, honesty, consideration for others. I believe the responsible company operating to high standards with sound values can make a major contribution.

But for a leader of a major corporation or any major unit in civil society, the issues that need to be resolved against those values are often much more complex than for an individual. The problem lies in the interpretations. There are gray and poorly defined areas which need a lot of thought. If you get it wrong, the consequences are tricky and can be very serious.

The very act of engaging challenges your values. Engaging with the leaders of unrepresentative regimes carries risks. You have to be very certain and very clear about your values and make sure that they are very clear about your values, and that you are not compromising. It's what I call "dining with the devil."

Weinreb: How do you ensure values are embedded?

Moody-Stuart: You really have to check that [employees] buy into the values and that they're embedded in their day-to-day behavior. People will assess your values not just on your personal behavior, but on the behavior of the organization which you are fortunate enough to lead.

You need to have a lot of discussions with groups of people. For example, there are many forms of corruption. It's very subtle; things which might be legally defined as okay actually are a form of corruption. So we need war stories and examples if people are to believe that the values really matter.

You need to make sure that people know of examples where the company has lost business or incurred costs, or where a commercially smart individual was hitting all the targets and doing apparently a great job but not reflecting the values of the company. [At Shell,] people knew from our original 1970s business principles that we didn't bribe people. They could say with confidence, "We do not bribe people. 'We,' meaning 'me and my colleagues,' don't bribe people." They knew that because we had given lots of examples of missing business and how to turn it down.

It's not the stuff in most corporate training, which tends to be written by lawyers where the criterion is "Is it legal?" or "Is it in line with our values?" You can't write a manual which covers every situation, but people who have discussed and debated the values actually can work out each situation for themselves pretty much as well as the leader could. And you can trust them to do that.

Weinreb: Do values change over time?

Moody-Stuart: I think in an absolute sense, the values don't change, but our interpretation and expression of them certainly changes. We evolve. If you look at the history of the world, we've actually often expressed similar values about the equality of people. But at the beginning of the 20th century, I believe no country had everybody above the age of 18 voting as equals. Although we talked about equality, we interpreted it in a strange way. We were primitive in the 1970s relative to today [in regards] to women, race, religion and so on.

In 1995, we had all these shocks — Brent Spar, Ken Saro-Wiwa's execution, the first recognition in the 1990s of fossil fuels in climate change. Being an analytical and systematic company, we [conducted] a major review and discussion about our business principles.

We made a number of changes:

1. Human rights: Our responsibilities for human rights, for expressing support publicly for human rights of our own people and our neighbors, and a responsibility in line with the role of business to express support for fundamental human rights in the countries in which we operate.

2. Politics: For a long time, we hadn't made political donations. We made plain that we did have a responsibility to express our views on politics, but in a nonpartisan way.

3. Sustainable development: In 1997, we started to report openly and publicly on what we were doing. We called it "The Shell Report," with the subtitle "Profit and Principles: Does There Have to be a Choice?" Since then, many companies [have begun to] issue sustainability reports.

Weinreb: What are your takeaways about responsible leadership?

Moody-Stuart: I'm a very strong believer in engagement and investment by responsible companies in countries of all sorts as a kind of example, rather than withdrawal, isolation and sanctions.

I think a responsible company operating in such difficult places is accountable to shareholders and subject to pressure from stakeholders and consumers. And they report openly on what they're doing in tricky situations.

I'm also a strong believer in listening very carefully to others even if we don't necessarily agree with them, because they got that impression from somewhere. The truth very often is somewhere in between. Very often we have common objectives and it's just the methods that may differ.