Deborah Majoras, Chief Legal Officer at Proctor & Gamble, joins Cindy Moehring to discuss the implications of business ethics in the corporate world. Majoras shares the importance of the companies PVP's, purpose, values, and principles, and how these ideas have built the foundation of a company that has thrived since the late 1800's.
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Episode Transcript:
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0:00:16.0 Cindy Moehring: Hi, everybody, and welcome back to another episode of The BIS, The Business Integrity School. And I am super excited today to tell you that we have with us Debbie Majoras from Procter & Gamble. Hi, Debbie.
0:00:27.9 Debbie Majoras: Hello, Cindy.
0:00:29.3 Cindy Moehring: It's great to see you.
0:00:30.6 Debbie Majoras: It's great to see you. Thank you for having me.
0:00:33.0 Cindy Moehring: You are more than welcome. Debbie and I have fortunately known each other for several years, but let me tell you a little bit about Debbie and her varied experiences, and give you a sense of what you're gonna hear today. She has a very diverse legal career. She's served in the corporate, the governmental, and in the law firm sectors. She currently serves as the chief legal officer and secretary for Procter & Gamble, and she joined that company in about 2008. She has also served on the Board of Directors of Valero Energy Corporation since 2012. But in her full-time role as chief legal officer at P&G, she oversees a global legal department of, get this, about 600 lawyers and other professionals who are responsible, as you can imagine, for a very broad scope of legal and government relations functions. And they service all of P&G's operations, which would include 118,000 employees, so it's a really big job. Now, as corporate secretary, she serves as the primary resource to the directors for governance, securities, and process issues, and she is a member of the company's global leadership council.
0:01:38.3 Cindy Moehring: Prior to that, she was chairman of the FTC for about four years, from '04 to '08. And during her tenure, she focused on things that are, interestingly, still in the news and coming back into the news these days: Data security, protecting consumers from emerging fraud such as identity theft and spyware, and she served as co-chair of the president's Identity Theft Task Force. Prior to the FTC, she also served in the US Department of Justice Antitrust Division from '01 to '03, first as deputy assistant attorney general, and then as principal deputy. And her career as an attorney began with a clerkship for the Honorable Stanley S. Harris on the US District Court for the District of Columbia. And following that two-year clerkship, she joined the international law firm, Jones Day, becoming a partner in 1999. Debbie graduated from Westminster College in her home state of Pennsylvania in '85. She earned a Bachelor of Arts degree there, and she earned a law degree in '89 from the University of Virginia, where she graduated Order of the Coif and was an articles editor on The Virginia Law Review.
0:02:46.3 Cindy Moehring: Well, thank you for being with us today. I'm excited to have you here and to have the chance to talk with you about your own experiences, and seeing how the field of business ethics and integrity and corporate governance and ESG generally has really evolved over the years. And I'll say, for both of us, probably about 20, 25 years ago, nobody was really talking that much about business ethics or ESG or responsible business growth. It just really wasn't a topic. But I have a sense that there were some companies that it wasn't a strange topic, too, if you will. It may just not have been making headlines. And to me, P&G was one of those companies, especially when I go back and reflect on P&G's values and purpose, and the principles that they have. Can you tell us a little bit about that, and whether or not this is something new for P&G or not?
0:03:44.4 Debbie Majoras: Sure. Thanks, again, for having me, Cindy. It's a really important topic. Yeah. Interestingly, we do call our foundation of our company our PVPs, our purpose, values, and principles. And they've been in place for many decades in some form. But really and truly, if you go back to the founding of the company in 1837, Mr. Procter, Mr. Gamble, one made candles, one made soap, came together on a handshake and started this business. And there's a quote from James Gamble that we still use today, and I'll read it to you. He said, "If you cannot make pure goods and full weight, go to something else that is honest, even if it is breaking stone." So, that was foundational to him, who founded the company.
0:04:39.9 Debbie Majoras: And so we have these PVPs, and I think the key to it, Cindy, is it's not a slogan. When I interviewed with P&G, it was amazing to me how senior executives I was talking to were just constantly throwing in the PVPs as a really important part of the culture. It was very natural for them. It wasn't like a put-on, it was very natural. I had to go look up what it was. I certainly had done research on the company, but I hadn't shortened it to PVP, so I had to figure out what they were talking about, but it's been that foundational to us. And on our employee survey, every year, when we ask the question: What is the one thing you would not change about the company? Overwhelmingly, that's what our employees talk about, "Do not change that." And that's important to the culture. Doesn't mean we're perfect, but it's a very, but it's a strong starting point, and frankly, one of the things that attracted me to the company.
0:05:41.7 Cindy Moehring: Yeah, yeah. I can understand that, I can see that. In fact, there are so many long-tenured employees at P&G, because I think that PVP, those PVPs kinda ground them. They feel comfortable. They can be who they are, and bring their whole selves to work, and ground themselves in a culture that feels comfortable to them. I've always admired that about the company. I actually think it's one thing, too, that P&G and Walmart actually shared, because you can find so many people at Walmart, same way, it's... It isn't just a culture that is written on a code somewhere or posters on the board. You can feel, when you talk to the senior leaders at Walmart, that they live it. And it probably goes back to the very beginnings of both companies and the wonderful relationship that developed from there. But I would say, for many companies, that these issues have become more central these days. What do you think changed that made them more central? Can you identify a particular tipping point?
0:06:46.1 Debbie Majoras: Yeah. I'm not sure I can identify one, but I think there's been a number of things happening in the environment that have made it so. Some of it's carrots, some of it's sticks. Starting with the stick part, the... If we look at corporate scandals that have happened over time, I don't know that there's more of them, but they're a lot more public now than they ever have been, where things might have been, at one point, confined to the business pages in particular media. Today, it's in popular media, it's in social media. And so when something happens, it's just a lot more out there, and companies are seeing that. It's something that I try to tell the employees at Procter. Number one: Don't gloat, that's dangerous. Learn. Okay?
[chuckle]
0:07:47.3 Cindy Moehring: Right. Right.
0:07:49.0 Debbie Majoras: Number two: Learning from someone else's mistakes is a lot less painful than learning from your own. And so I think companies do, and I think they see that. For those who don't, we've had a series of fairly significant pieces of legislation that have been passed over time, from Sarbanes-Oxley, post-Enron, to Dodd-Frank, and some in between. And so that's another part of the stick. If you're not gonna get this message, then we'll take the message to you.
0:08:20.8 Debbie Majoras: The other thing we see, though, we see investors pushing even more on these issues. Investors certainly cared about them in the past if it meant significant finds and time and distraction away from the core business. But I think today, as we talk about ESG, environmental, social, governance, and how that whole body of work for companies has become so important to so many investors, you can't forget that governance piece, that stewardship piece. It's hard to be out there saying that you're doing good for the world if you're not minding your own ethics back at the shop. And so I think that has... And then finally, I would just say another trend, Cindy, is just populism. And some of that has led to just more and more distrust of institutions and the need for corporations to earn trust in a way that is different than has been in the past. But I think that's a good change.
0:09:30.9 Cindy Moehring: I think it is, too. I think that that has really... I think we see that change, I should say, through some different things like the Business Roundtable's recent change and their statement of what the purpose of a corporation really is, and moving away from the Milton Friedman example, which is still talked about a lot in business schools, and that the shareholder reign supreme to more of the stakeholder theory, populism, generally thinking about all the stakeholders. And again, I think there are companies, probably many, that were already doing that. I know Walmart was certainly one, and P&G is another example, balancing all of the stakeholder interests. But for the Business Roundtable to come out and make it an explicit statement is important, because it not only says, "Well, this is just the way we do it," it formalises it for 181 of the world's largest corporations. Let me ask you this, do you think that that model is here to stay, the focus on stakeholders now? And if so, why?
0:10:39.2 Debbie Majoras: I do, I do think it's here to stay. First of all, I will tell you, from my perspective... And again, it could well be because of where I sit in Procter & Gamble and the way we have viewed stakeholders. I think that was a step on this journey as opposed to any kind of U-turn because my feeling... And in fact, I might have changed just a word or two, tweaked a word or two in that statement, but my view is, look, even to the Friedman point, if you are serving the long-term interests of shareholders, you must necessarily serve the interests of these stakeholders, right?
0:11:19.9 Cindy Moehring: Right. Right.
0:11:21.7 Debbie Majoras: 'Cause I don't see these as either-or, I see them as ands. And that, I think, is why our company did, it did sign the statement. But why do I think it's here to stay? I think one of the main reasons it's here to stay is because I do believe that people feel that governments are failing them, and that starts at home. We have so much dysfunction in our government. It doesn't matter which party you wanna affiliate with, if at all, it doesn't matter if there's dysfunction, and people see it, and it affects them in their lives. And so institutions and people are turning to other big organizations like corporations and saying, "We need your help. We need you to step up."
0:12:17.7 Debbie Majoras: It's really fascinating, Cindy. If you look at some of the trust barometers, corporations are actually doing better these days. For the longest time, we felt like we were just down like this, and I think... And that's a good thing, too, but I think the expectations of us now are high, and I just don't see that going away. I just can't see it going back to, "Yes, we've done all we can do to help solve the world's problems. Now, we're gonna retreat and go back." I just can't see that ever happening. There's just too many problems in the world, and we're among the largest employers, and we have a voice, and we have a lot of smart people. And so, here we are, let's help solve problems.
0:13:02.9 Cindy Moehring: Yeah. And I actually feel like the world's problems today are so large that they almost can't be solved. Well, the pandemic kinda illustrated that. But they cannot be solved without a strong partnership between business and government and other... Some of the trust barometers that Edelman's done, their trust barometer report flag 20 years now. And they've got corporations that are seen as the most competent, so furthest to the right, much more so than the other institutions in society, but needing to... With that comes the expectation that you're gonna hold out your hand and bring the others along because there's not one segment of society anymore, is sort of what they found, that can solve all the problems. So, you need a partnership and you gotta figure out how to collaborate. And the expectation is on business to do that.
0:13:51.0 Debbie Majoras: Yeah, I think so, too. And it's frustrating sometimes when we do encounter people in the public sector that are... They look at it as a complete dichotomy. "You're in business, you're this kind of person, we're serving the public or this kind." That, I think, is a dangerous viewpoint, and I agree with you that partnerships, including public-private partnerships, are going to be really important to us going forward if we're gonna solve some of these problems.
0:14:17.6 Cindy Moehring: Yeah. And non-profit sector, as well, all parts need to be working together. Do you have any good examples of how P&G has, similar to their PPV... Or PVP, I got it wrong, sorry.
[chuckle]
0:14:30.0 Debbie Majoras: It's okay. It's okay.
0:14:30.7 Cindy Moehring: Similar to their PVPs, how you guys have put this Business Roundtable statement into action so that people can understand it. You have some examples?
0:14:42.1 Debbie Majoras: I do, I do. We look at it and we say that we wanna be a force for good and a force for growth. And the way we start thinking about that is thinking about how to build in those good works, if you will, into the strategy of our business. You know this, Cindy, from being in a company, that if you bring anything in, including whether it's ethics or... And you bolt it on top of something that's already baked, it just doesn't get there.
0:15:12.0 Cindy Moehring: No.
0:15:12.1 Debbie Majoras: And we find that the best way to do that and really get it, make it part of the strategy is to ask ourselves, as we do with the rest of our business strategy, "What are we good at? What's our equity? Where would we best have a voice? And so for us, of course, advertising is a huge piece. We're, at any given time, the largest or one of the largest advertisers in the world. And so we have an advertising voice. For example, you may have seen that we've used that voice significantly in the area of racial equality, and gender equality, and sexual orientation equality. And some of those ads have been controversial. It really showed that we've stepped into a different era because you will recall the time where corporations said, "That's a big no, no. You don't go there."
0:16:04.9 Cindy Moehring: That's right.
0:16:06.2 Debbie Majoras: And now it's, "Look, we stand for quality and we have a voice, so we're going to talk about it and we're going to provoke difficult conversations." True that you get, sometimes, a shareholder rights and says, "That's it, I've sold my stock." Sometimes you get consumers who say, "I'm no longer buying your product." But again, we believe that sitting on the sidelines on such important issues is far worse, far worse for society, but far worse for our shareholders and other stakeholders. That's one example. Other examples really go directly to the products we make. For example, we make feminine care products, and we're very, very engaged in a campaign that we call Ending Period Poverty, which is to help make sure that girls here and around the world have the products that they need because, frankly, when they don't, they leave school for seven days.
0:16:57.9 Cindy Moehring: That's right.
0:16:58.2 Debbie Majoras: And sometimes they don't come back, right?
0:17:00.2 Cindy Moehring: Right.
0:17:02.8 Debbie Majoras: So, that's an area where we, again, have some equity and therefore I think we can play it. We are very involved in disaster relief. If you think about it, when you're in a disaster and you have to leave your home, what do you need? Well, you need cleaning products for yourself, and you need clean clothes. I don't know if you've ever seen them, but we have these massive tractor trailers with Tide on the side, full of washing machines and dryers, and we literally go to the shelters where people have been misplaced, and offer to wash their clothes for them. It's amazing how much people love to have clean clothes. It just helps you say, like, "I got up today and I could actually put on a clean pair of jeans." That's another... So, disaster relief is another area that we've been a big part of. And there are others, but...
0:17:57.8 Cindy Moehring: Those are great. I love the advertising one in particular. We actually used one of those videos, The Look, last fall 'cause we did a whole program called, Let's Talk About Integrity and Race, and made it available to the community and to the students and the staff and the faculty, and that was one of the videos that we used because it just... It was great in terms of it's really bringing the light to some difficult issues.
0:18:28.2 Debbie Majoras: Thank you.
0:18:28.7 Cindy Moehring: Let's talk about COVID for a minute. Obviously, cleaning supplies, in general, and other things, being home more, in the consumer goods categories were very good for P&G through COVID. You had a great last three months, which is to be commended, 8% rise in overall sells and 30% jump in consumer demand for home cleaning products during the pandemic, which is fantastic on the financial result side. But let's talk about the rest of the story, if you will, 'cause there's so much more to it than just that. Then it's the human side of it. So, in leading a company through this, certainly helping to lead a company through this, what did you learn about integrity and trust and responsible growth by going through this once-in-a-lifetime pandemic?
0:19:25.8 Debbie Majoras: Yeah. It certainly was an intense experience.
0:19:30.1 Cindy Moehring: And it's not over, we should say. But a year in, what have you learned?
0:19:35.3 Debbie Majoras: Yes. Yes, it's not over, it's not over for sure. Well, the first thing really that we learned was that you have to set priorities, and our CEO set three priorities based very intensely on our values. The first is, we focus on the health and safety of our employees. That's number one. Number two was, we do everything we can to continue operating so we can make, pack, ship health and hygiene products, cleaning products, supplies that people need. And then third was, we will step up and be there for our communities as much as we can. And it's such an amazing thing. Good people are great in crisis, right? It's incredible. But we've been through crises before, so the other thing that we did as an executive team is... And I loved this 'cause it's recognising that people can really step up in crisis, but they can also be under a different kind of pressure.
0:20:38.5 Debbie Majoras: And our job, when it comes to ethics and doing the right thing, is to make it easiest for them to do it and to not make it so hard. So, we took lessons that had been learned in the past and put them into a playbook that we used with our people on here's how we think about things when consumers are going through great difficulty, and so forth, things around making sure that we just had the highest integrity in our claims and advertising, thinking about our pricing and how to deal with that and so forth. So, a lot of different things there. And you saw the results, we prioritised those things and we did well. It's kind of the classic saying, "Do well... " I'm sorry, "Do good, and you'll do well." And I think we showed that the two are certainly not inconsistent and probably actually quite consistent.
0:21:38.9 Debbie Majoras: And then the other thing I would say that we really learned about trust is how important it is to be out there earning it every day with all of your stakeholders. When I look at what unfolded in this pandemic, it started in China and then came across the rest of the world, we learned a lot in China about how to keep the employees in the plant safe and keep them working. The government wanted them working because the government wanted those products getting to the people, so we learned a lot about how to do that. We shared that playbook with governments across the rest of the world, and at any given time, I think we only were down by maybe 2% at our plants worldwide at any given time. And really and truly, when I look back on it, Cindy, it's because we had built up a strong reputation with governments that we could be trusted. So, when we said to them, "Trust us, we will keep these employees safe and we will get these products out the door for the consumers who so desperately need them," we had built enough up that they did trust us and we were able to do it.
0:22:50.4 Cindy Moehring: If you think about then the future of responsible business trust, the business ethics and integrity, if you only had three words to describe what you think the future of that will be, what would those three words be?
0:23:10.3 Debbie Majoras: Proactive. It's not gonna work, I don't believe, in creating value for your company and creating value for society to sit back and wait to see what government regulation tells you that your compliance and ethics need to look at or even necessarily just waiting for best practices for bigger companies to emerge. I think it takes being proactive and thinking it through. I think the second would be respect. So, it'd be proactivity, respect, and humility. I think it's respect because, honestly, Cindy, I've been doing this a while now, you know from how long you worked with employees that if you look at ethical breakdowns, there's a fair percentage of them that could have been prevented if people were just respecting others, respecting others around them, and respecting stakeholders. We talk about that a lot. Okay, you're asking me, "What's the law here," or whatever. Let me ask you a different question, what do you think a consumer would want from you? And if you respect that consumer, where does that lead you? Getting respect is an important one.
0:24:30.4 Debbie Majoras: And then finally, humility. Look, I'm big on ethics and compliance, and doing it right takes humility. I mentioned earlier I tell people, "Don't gloat about others when they do get into hot water." The problem is, if we're arrogant about ethics and compliance, then it sounds like we start to divide the world into good people and bad people, but really, with some exceptions at the margins, it's really just people and which way are they gonna pivot. And if you read... I read a lot of books about the slippages because I wanna understand. And they generally start with a tiny step down the slippery slope. And what I try to tell our people and myself, frankly, is every one of us is capable of taking that tiny step.
0:25:23.7 Cindy Moehring: Speaking of business schools and just higher education in general, what are a few things that you think are most important for those institutions to be transferring over to the students to prepare them better to live in this world that you and I just talked about, that probably isn't gonna change where ESG and balancing of the stakeholders is all gonna be a part of it? What do business schools need to be doing, most importantly, to prepare students for this world that's disruptive in some ways, but in other ways needs to remain quite constant when you think about trust and integrity?
0:26:01.8 Debbie Majoras: Yeah. First, my sense... And I obviously don't know business school curricula like you do, Cindy, but my sense is that, for too long, it was here's all your core business classes, and then you take an ethics class over here. And it's possible that that's not true anymore, but I do think it's really important that business ethics and thinking through the right thing to do should be baked... In my view, should be baked into all of the different business classes. They should be part of all of them, because it's actually unrealistic to think that you're gonna do case studies on this kind of thing, or whether to make this product or whether to do... And that those issues aren't gonna come up because they always come up.
0:26:53.9 Cindy Moehring: Yeah, they do. I know.
0:26:55.6 Debbie Majoras: Always. And the companies that do it best are the companies that have those discussions during the overall strategy and then deployment. And they don't wait to the end, and then run in and ask, "Legal, can we do this?" But that's a bad way to do it. As I have told my people when I first started this job, if that's what you do, then I only have two answers I can give, yes or no. I'd rather give the answer of, "Wait a minute, tell me what you want to accomplish and then let's think that through together." That's what happens in the real world. So, when you're doing case studies and problem solving and business school, better to have that all together, I think.
0:27:36.6 Debbie Majoras: And then the second thing is... And this, I admit, it's kind of maybe a little personal thing for me, and I'm not even sure exactly how you do it, except maybe just raising it with people to think about. One of the things, Cindy, that we really had to think a lot about in law school was how do we separate our own views of what justice might look like from what the law requires, and why is it sometimes that there may be results that we don't think are the perfect results from a justice standpoint, but the overall system depends on us being a nation of laws and not a nation of individual viewpoints, broadly.
0:28:16.1 Debbie Majoras: One of the things that we see in ESG is that we have to really learn... This is just one area more than any I've ever seen, were being able to separate your personal views and passions from what the company ought to be doing is such an important thing to be able to do. And so I think, for folks being trained in business, having the chance to think through some of those dilemmas, because the world will continue to demand more of you as you get out of business school, you can't do everything that everyone would ask of you. Serving all of your stakeholders doesn't mean you say "yes" to every single thing that you're asked to do. And how do you determine that similarly to how you determine what products are gonna sell and not sell, and what services you'll provide or not? So, I just think... I think, too, getting that in part of the traditional conversations will be a real help to people as they get out and into jobs.
0:29:22.6 Cindy Moehring: Yeah, woven throughout, integrated, and not stacked on or bolted on or off on the side for both of those. Yeah, super important, I think. Debbie, this has been a very rich and wonderful conversation. Thank you so much for your time. I always like to end on a fun question. I know you've been super busy dealing with COVID, but I do wonder if... And a little bit of free time that you may have had, if you've been watching anything fun or reading anything, just as a release, but it also had an ethical dilemma somewhere embedded in there that you might recommend to our audience that they could either read or watch.
0:30:03.2 Debbie Majoras: Well, it's really funny because, at the start of COVID, my husband said to me, "You're gonna have to start watching some TV and movies," because other than sports, which I love, especially golf, I just didn't like many shows. And so all these things on Netflix and all these things... I would hear people talk about them and I knew what they were, but I never watched. So, he got me hooked on The Crown.
[chuckle]
0:30:31.6 Cindy Moehring: That's a good one.
0:30:34.6 Debbie Majoras: Well, and I love... Even in my reading, I read a lot of history and I read a lot of historical fiction, 'cause I really enjoy it and I think there's a lot of lessons to be learned in history and what to do and what not to do. Anyway, The Crown is terrific. And I do think there's ethical dilemmas in The Crown. We can look at some of them today and say, "Well, that really shouldn't have been an ethical dilemma." But, for example, when the Queen's sister wanted to marry someone who had been divorced and that was forbidden by the Church of England, and the Queen really felt her duty to uphold that, and also is constantly looking at what's best for the monarchy and the country as opposed to just what's best for our family or an individual family member. Again, you can look back at it now and say, "Well, that didn't... " But that's with today's lens. You have to look at it through that lens. And so you see that throughout the series where she goes through these dilemmas about personal versus what's best for the overall... And you can tell that they believe that preserving the monarchy is also best for the country.
0:31:53.0 Cindy Moehring: Yeah. Those were great and some real personal ones, just like the relationship that she had with her husband, Philip. Does he go down the plane first when they are gonna get off the plane, or does she go first? And it's very awkward back in that day for him to allow her to go first, but she was the Queen, she represented the monarchy. And so there's that and the relationship with her sister. Yeah, I totally agree, that personal and putting personal aside preserved what she may have believed was best with the power of the monarchy. That's a great one. This has been a fantastic conversation. Thank you very, very much for your time, appreciate it.
0:32:28.6 Debbie Majoras: Well, thank you, I've enjoyed it. I always enjoy seeing you, Cindy. And I wish all of the listeners truly good health, and good luck in your studies, and that you'd get into our careers.
0:32:41.9 Cindy Moehring: Thank you. All right, everyone, that's a wrap for this week, but join us back next week for another episode of The BIS with another very exciting guest. We'll see you then. Thanks again. Bye-bye.
