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BUSINESS ETHICS
 BUSINESS ETHICS
WHAT EVERYONE NEEDS TO KNOW®

J.S. NELSON AND LYNN A. STOUT

 Oxford University Press is a department of the University of Oxford. It furthers the
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© Oxford University Press 2022

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 CONTENTS

PREFACE

1 An Overview of Business Ethics

What are business ethics?
What do ethics have to do with making money?
How are business ethics different from general ethics?
What does it mean to have an ethical duty?
What types of fiduciary duties exist?
To whom (or what) can businesspeople owe ethical duties?
Why should I care about business ethics?

2 The Benefits of Acting Ethically

Being ethical sounds like hard work. What is the upside?
Won’t I be at a competitive disadvantage if I always act
ethically?
What are the material advantages of ethical action for
individuals?
What are the physical and psychological advantages of acting
ethically for individuals?
What if being ethical means that I make less money—won’t that
make me unhappy?
What can I do to increase the chances that my ethical behavior
will be rewarded?
 How do organizations benefit when their employees and
executives act ethically?
How can organizations increase the chances that their ethical
behavior will be rewarded?
How do societies benefit when individuals and organizations act
ethically?

3 Moral Philosophical Bases for Business Ethics

What are the major schools of philosophical ethical thought?
What are the strengths and limits of virtue ethics, such as in
Aristotle’s writings?
What are the strengths and limits of ethics-of-care rationales
such as communitarianism?
What are the strengths and limits of cost–benefit rationales such
as utilitarianism?
What are the strengths and limits of rights-and-duties
rationales, such as Kant’s categorical imperative?
What are the strengths and limits of distributive-justice
rationales, such as Rawls’s principles?
Where do the Golden Rule and other common maxims fit in?

4 What Does Science Tell Us About Ethical Behavior?

Are people innately ethical?
How do people develop the capacity to be ethical?
What sorts of pressures drive otherwise-ethical people to do
unethical things?
What sorts of social environments encourage ethical or unethical
behavior?
Why does “tone at the top” matter so much?
How do ethical and unethical individuals influence others?
 How do incentive plans encourage ethical or unethical behavior?
What does where you work say about you?

5 Legal Foundations of Business Ethics

What is the relationship between law and business ethics?
What does it mean to owe a legal duty to a partner or other
natural person?
What does it mean to owe a legal duty to a corporation or other
“legal person”?
When do I have a duty of obedience?
What does the duty of loyalty mean?
When do I have a duty of good faith?
When do I have a duty of care?
What are duties of confidentiality?
When do I have a duty not to lie?
What are disclosure duties?
Why should businesspeople act more ethically than the law
requires? Isn’t the law enough?

6 Understanding Corporations, LLCs, and Other “Legal

Persons”
What is a corporation, LLC, or other “legal person”?
What is the purpose of a corporation?
What is the role of the board of directors?
What are the roles of corporate officers and other employees?
What is the relationship between the corporation and its
shareholders?
What can a controlling shareholder do?
 What is the business judgment rule and why does it matter?
What kinds of conflicts of interests are common in corporations
and how can they be addressed?
What special rules apply to corporations?
How can laws be enforced against a “legal person”?

7 The Corporation as an Ethical “Person” in Modern

Society
What role should corporations play in modern society?
Are corporate managers required to maximize shareholder
value?
What is corporate social responsibility (CSR)?
Who are the stakeholders in a corporation?
Why should corporations act in economic, socially, and
environmentally sustainable ways?
How should a corporation account for external costs?
Why should a corporation want its actions to be transparent?
How do sustainability, accountability, and transparency work
together in CSR?
What authorities have adopted CSR principles, and how are
corporations accountable for CSR?

8 The Costs of Acting Unethically

What are the legal consequences to individuals for unethical
business behavior?
What are the reputational penalties to individuals for unethical
behavior?
What are the other consequences to individuals for unethical
behavior?
 What are the legal consequences to organizations for unethical
behavior?
What are the reputational penalties to organizations for
unethical behavior?
What if I think that I won’t be caught?

9 Major Ethical Traps in Modern Business

What are some of the most common unethical business
behaviors?
What patterns do common unethical business behaviors take?
How are most unethical behaviors caught?
What is the ethical slide?
When are you crossing the line into your own ethical slide?
How can I handle peer pressure and negative reaction to halting
my ethical slide?
How do I speak up when I need to challenge unethical
behavior?

10 Special Issues of Ethics in Leadership

Do managers behave less ethically than other employees?
What is the dark triad?
What is the effect of pressure to produce results as a manager?
How do we deceive ourselves under pressure?
How do ill-conceived goals, motivated blindness, and indirect
blindness affect managers under pressure?
What are the psychological effects of being in a management
position itself?
What are the consequences of retaining unethical managers in
an organization?
 How can the difference in power between managers and
subordinates affect the decisions that businesspeople make?
How does business culture affect what ethical decisions
businesspeople make?
What can employees do to promote ethical environments
without leadership support?

11 Negotiations
Why are there special ethical issues in negotiations?
What is fraud in negotiations?
When is it permissible to lie?
When is it permissible to stay silent?
What special responsibilities flow from power imbalances in
negotiations?
What are some special ethical issues in negotiating for someone
else, such as a business?
What are some special ethical issues in negotiating for a job?
What are some special ethical issues in negotiating solely for
price?
How important are personal relationships in negotiations?

12 Specific Liability Questions and Whistleblowing Options

How should businesses report ethical violations?
How should employees report ethical violations?
What are some sources of rules, and who are the enforcement
entities?
What are some strategies for employee reporting?
What are my options if reporting within my organization does
not work?
 What are my options when I report to authorities?
To what benefits am I entitled as a whistleblower?
What protections will I have as a whistleblower?
What else should I know about being a whistleblower?

13 How to Institute Best Practices

Why do business leaders need to create and promote ethical
environments?
What does an appropriate compliance and ethics program look
like?
What guidance has the DOJ given regarding its interpretation of
the Organizational Sentencing Guidelines?
Fundamental question one: Is the corporation’s compliance
program well designed?
Fundamental question two: Is the program being applied
earnestly and in good faith?
Fundamental question three: Does the corporation’s compliance
program work in practice?
What is the value of the DOJ’s approach?
What are other principles and practices to create high-quality
compliance and ethics programs?
How does a company set realistic goals for its compliance and
ethics program?
How should companies use structural behavioral incentives such
as nudges?
What should an effective code of conduct or ethics include?
What other elements should a comprehensive compliance and
ethics program contain?
 What are the practices of the most effective compliance and
ethics programs?
Why does institutionalizing ethical practices matter?

14 Designing an Ethical Culture

Why does creating a “speak-up culture” matter?
What can be done to better create and reinforce a “speak up
culture”?
Why does it matter to prevent retaliation against employees
who report, and what are some ways to do this?
What are the consequences of not addressing internal reports
appropriately, and preventing retaliation?
What are some specific, helpful ways to reduce retaliation within
organizations?
What are some problems that larger companies and supply-side
companies face?
Problem one: What ethical challenges do large corporations face
when their leaders are removed from front-line employees?
Problem two: What ethical challenges arise from high-level
employees’ opportunity and capability to commit fraud?
Problem three: What ethical challenges do supply-side
companies face?
What are some ideas for these organizations and others in
crisis?
What are some of the best compliance and ethics programs in
businesses today?
What are the lessons that businesses and individuals should
learn from our discussion of compliance and ethics?

15 How to Respond to Investigations and Protect Your

Reputation
 How much benefit is there to the company from having a
compliance and ethics program in place before an investigation?
Understanding the narrative: Why does a prosecution’s “theory
of the case” matter?
What does cooperating with a prosecution mean for a business?
How, in brief, do businesses conduct internal investigations?
What does cooperating with the prosecution mean for an
employee?
What are the steps of a prosecution?
What happens to corporations and individuals who don’t resolve
allegations and investigations before trial?
What lessons should businesses and individuals take away from
this closing chapter and this book in general?

APPENDIX: ADDITIONAL RESOURCES AND PEOPLE YOU CAN

REACH OUT TO
NOTES
INDEX
Important notice: The authors of this book are not
representing any client or proffering legal advice. Legal
information can and does change, so readers should look
up the state of the law when they need it, and they should
consult their own attorneys before taking any action.
 PREFACE

This book was a labor of love. Lynn Stout, who had been my
Corporations professor at Harvard Law School, and who had kept in
touch with me for nearly twenty years afterwards as I taught in
business schools, asked me whether I would like to co-author a book
on business ethics with her. The original idea for the book had been
legendary Oxford University Press (OUP) editor Scott Parris’s. He had
brought the proposal to Lynn, and Lynn wanted my perspective from
teaching in business schools.
We were together excited to create the first book we knew of its
kind that would survey not only moral philosophy, behavioral
science, economic principles, and other contributions, but to make
business-law concepts accessible and understandable to
businesspeople and students of law, business, and ethics. We
thought it would be particularly important to talk about compliance,
investigations, whistleblowing, and prosecutions as well. We wanted
to end with an appendix of people and resources that anyone with
questions could reach out to.
Lynn and I shaped the table of contents and its questions
together. The plan was that we would each write half of the book.
Lynn wrote the first chapter, and she was able to outline her ideas
for the second before getting sick. She eventually succumbed after a
long battle to the cancer that took her life. Her dying wish was that
the Press list me on the book as first author. The Press’s response
was moving: “that would be the ethical thing to do.”
I have continued to labor since Lynn’s passing to bring to life this
book that was her vision and a natural extension of her work. Lynn
was deeply committed to popularizing business law and ethics. It is
my humble honor and pleasure to be able to get this manuscript into
your hands as Lynn’s last book, published after she has passed. She
may be gone, but she will never be forgotten, and the passion of her
words and educational mission live on in this book, as well as in the
rest of her work.
I was helped in the completion of this work by the incredible
support of my husband and children, who, particularly during the
pandemic, had to contend with the book as another child demanding
attention in the house. I am grateful to my mother, an English
professor for some fifty years, who patiently reviewed early drafts.
Christina Collins reviewed manuscripts as an editor, as well as my
friend. Rosalind Wang patiently served as a sounding board and
source of encouragement. The spectacular Emily Lavelle, of Lavelle
Communications, helped navigate the book-publishing process, and
so much more. I was cheered on in the project by my
ComplianceNet co-conveners Benjamin van Rooij, Yuval Feldman,
Melissa Rorie, Adam Fine, and Colin Provost. Professors in their
areas of specialty, and particularly Steve Chanenson, Brett
Frischmann, Andrew Lund, Jennifer O’Hare, Linda Treviño, Mary
Gentile, Robert Prentice, Elizabeth Pollman, Ed Freeman, Marty
Lipton, Miriam Baer, Don Langevoort, Usha Rodrigues, Colin Mayer,
Veronica Root Martinez, Marc Cohen, Cynthia Williams, Claire Hill,
Charles O’Kelley, Bill Bratton, Jill Fisch, Jeffrey Gordon, and so many
others to whom I am indebted, gave graciously of their time and
energy at different points. In addition to the support that I received
from OUP, I benefitted from the aid of faculty assistants Carla
Edwards, Patty Trask, and Victoria Durand; and students who
touched chapters at points, including (in alphabetical order) Erica
Atkin, Juliana Clifton, Lauren DeBona, Zachary Epstein, Erin
Fontaine, Meaghan Geatens, Paige Gross, Rachel Hanscom, Ryan
Kelly, Yuliya Khromyak, Kaitlyn Krall, Andrew Mark, Louis Masi,
Victoria Mazzola, John Morgan, Eric Nascone, Michael Neminski,
Shawna Riley, Abraham Schneider, Nathaniel Stanger, Matthew
Venuti, Stephanie Wood, and Melissa Zillhardt.
Most of all, now that this labor of love has come to completion, I
am delighted that it is in your hands. That’s where it should be—to
guide you, to engage you, and to help you think more deeply about
topics fundamental to our lives and the society to which we
contribute around us. Lynn, as an educator, would be proud. She
would want you to have these tools, and to go forth to make the
world a better place—the cause she fought for and spent her life on,
right up until her last breath. May her passion now be yours.
J.S. Nelson
Visiting Associate Professor
Harvard Business School, 2021-22
 1
AN OVERVIEW OF BUSINESS ETHICS

What are business ethics?

Business ethics are the set of moral principles that govern behavior
in a specific sphere of life: the world of business. Some people think
of the business environment as a cutthroat place in which people will
do whatever they can get away with, including violating the law and
misleading and harming others, in order to get ahead. This view,
however, is misleading and inaccurate. Certainly, you can see
instances of bad behavior in the business world (as in other areas of
life), but most people with real experience in business will tell you
that sound ethics are integral to a successful business career.
Business ethics embrace the idea of values and the importance of
being willing to make moral judgments about right and wrong
conduct. People often feel uncomfortable with the idea of exercising
moral judgment. As you will see in this book, however, it is
impossible to avoid this responsibility in business life and, indeed, in
life generally. Moreover, although sometimes it can be difficult to
figure out what the morally correct course of action might be, much
of the time this becomes surprisingly obvious with a little guidance
and forethought. Of course, this does not mean that following the
morally correct course of action will always be easy. We hope this
book will make it easier, in part by showing how ethical behavior
usually works out best in the long run.
Like the idea of exercising moral judgment, the word “morality”
makes some people feel squeamish. This is probably because the
phrase is so often used in a religious or cultural context to defend
idiosyncratic rules governing diet, dress, or sexual behavior. Business
ethics take a more universal approach to moral rules. They are
concerned with the basic principles that regulate our behavior in
dealing with others in business, whether they are employees,
customers, suppliers, or the general public.
Finally, business ethics are pragmatic. They offer concrete
guidance for how to behave in business dealings, including advice
for difficult situations. They also give practical guidance for daily
decision-making.

What do ethics have to do with making

money?
It’s nice to make money, and sometimes it’s a necessity. Business
ethics teach, however, that we have a moral responsibility to pay
attention to how we make money. Some ways of earning a living are
ethically better than others, and some ways of making money are
simply ethically unacceptable—not to mention possibly illegal.
Let’s start with the positive story of how making money can be
good not only for the person who makes money, but for society as a
whole. You might be familiar with the eighteenth-century economist
Adam Smith’s parable of the market being an “invisible hand” that
moves goods and services to those individuals who value them
more. A farmer who has harvested more corn than she can possibly
eat sells some of the corn for money that she then uses to buy a
much-needed pair of shoes; while the shoemaker, who has
manufactured more shoes that he can possibly wear, sells a pair to
the farmer for money he can then use to buy some of the farmer’s
corn for dinner. Both the farmer and the shoemaker have made
money, and both feel they have been left better off. The world is a
better place for their self-interested exchange. Each party has not
only benefited him or herself, but someone else as well.
Unfortunately, it is also possible to make money without leaving
the world a better place. This possibility is one of the principal
concerns of business ethics. To use an obvious example, a burglar
who makes money by breaking into others’ houses and stealing has
not made the world a better place. Nor has the contract killer who
commits murder for hire. Nor has the con artist who makes money
by defrauding people.
These obvious examples illustrate an important point: as a general
rule, it is unethical to make money by damaging others’ persons and
property (which economists call “imposing external costs”) or
misleading others. But what should we do when the situation is less
obvious? When is it acceptable to profit from selling a product that
provides clear benefits to some people, but also imposes some
external costs on others—for example, mining a much-needed
mineral, but using techniques that pollute the local water supply?
When is it acceptable to sell something to a buyer whom you have
not misled, but who believes something about the product that you
know is not true?
Business ethics help us deal with these sorts of questions. They
help us ensure that we are doing well by doing good, rather than
doing well by doing harm.

How are business ethics different from general

ethics?
Most people follow at least some ethical rules in their daily lives.
(The small percentage of individuals who do not are called
psychopaths; we discuss them more in Chapters 2 and 10.) The
world of business, however, presents some unique issues, which is
why they have evolved as a specialized field of ethics.
One of those unique issues is the sheer size and frequency of the
ethical challenges that businesspeople must face. It is not unusual
for those in business to be presented, almost daily, with
opportunities to personally profit by violating the law or by harming
or misleading others. The stakes can be enormous, especially when
a big transaction or career-making decision is involved. This means
people in business often face much larger temptations in the office
than on the street. (Although it is usually not very tempting to
shoplift a small item, the opportunity to make millions of dollars by
insider trading or cheating on a large contract is far more enticing.)
As a result, businesspeople must always remain aware of and
sensitive to their ethical obligations. If they do not, they risk joining
the long and sad parade of once-virtuous—but now notorious—white
collar criminals like Enron Chair Kenneth Lay, Goldman Sachs director
Rajat Gupta, and business maven Martha Stewart.
A second unique aspect of business ethics is that they operate in a
social environment—business dealings—in which people, to some
extent, often tolerate, expect, or even praise the selfish pursuit of
personal gain. This makes the business environment quite different
from many other social environments in which we interact with other
people. Few of us want to be perceived as selfish at a wedding
reception or a bar mitzvah. But when we are negotiating a contract
or trying to sell a product, a certain degree of material self-interest is
expected. The key phrase here is the qualifier, “a certain degree of.”
Business ethics help to keep us from crossing the line from
legitimately self-interested behavior, over to unethical and/or illegal
behavior.
Third, business ethics emphasize the obligations we owe not only
to our friends and family, but also the obligations we owe to people
with whom we have only an “arm’s-length” business relationship,
and even obligations owed to total strangers. Indeed, sometimes
business ethics go further still, and teach that we have obligations to
intangible legal entities like corporations. This aspect of business
ethics can raise some practical difficulties. It is relatively easy and
natural for a person to remember the interests of friends and family
who she likes, and with whom she interacts on a daily basis.
However, as we discuss more in Chapters 8 and 9, it is often more
difficult for us to stay aware of, and respect, duties owed to people
whom we don’t know well or even may have never met—much less
duties owed to intangible legal entities. Business ethics help us find
our way through this minefield.
Finally, a fourth distinguishing characteristic of business ethics is
that ethical problems in this context tend to involve unique concepts
and rules specific to the business world. Many of these concepts and
rules are based on, or draw upon, legal rules that apply primarily to
business institutions and business dealings. For example, in this
book we will discuss fiduciary duties, rules against fraud, duties
owed to corporations and other legal entities, and the resources and
legal protections available to “whistleblowers.” Business ethics and
the law are deeply intertwined.

What does it mean to have an ethical duty?

An ethical duty is an obligation or responsibility that must be met
without regard to one’s immediate self-interest. In other words,
ethics require us to do our best to meet our obligations, even when
we don’t particularly want to. In Chapter 2, we explore why, in the
long run, ethical conduct generally works out best for both
individuals and societies. In the short run, however, complying with
ethical duties typically requires the person with a duty to exercise at
least a modest degree of self-restraint and sacrifice.
This is because ethical duties, including business duties, generally
are intended to protect other people, like employers, customers,
clients, contract counterparties, and the general public. Ethical duties
require that we consider the welfare of others, not just our own
welfare, in choosing how to act.
Having to respect the interests of others may not seem a very
attractive prospect, especially if you’re the only person doing so.
Bear in mind, however, that business ethics set out general principles
that apply to everyone in the business world. This means that, when
businesspeople generally comply with ethical duties, you may have
to sometimes consider the interests of others—but also that they
have to sometimes consider your interests, as well.

What types of fiduciary duties exist?

In business ethics, the most common forms of ethical duty are called
“fiduciary duties.” There are a number of different types. We explore
the definitions of fiduciary duties, and their meanings, more in
Chapter 5. Because fiduciary duties are so common and central to
many business relationships, it is important to understand them.
Generally speaking, they fall into five basic categories. These are
duties of obedience, duties of care, duties of loyalty, duties of
disclosure, and duties of confidentiality.
Duties of obedience are relatively straightforward and apply most
immediately to the employer–employee relationship and to our
obligations as citizens. If you enter an employment or other business
relationship in which you agree to follow someone else’s instructions,
the duty of obedience demands that you do your best to do so. The
duty of obedience can also be seen in the general duty to obey the
law. As a member of society, you have an obligation to follow its
rules. Similarly, courts have held that corporate directors who
manage corporations have a duty to take steps to ensure that their
corporations obey the law.
Duties of care are more complicated. A duty of care generally
requires that, in acting to protect the interests of others, you
exercise a certain degree of prudence, caution, and attention. Duties
of care apply in a wide range of contexts. The degree of care
required to meet the duty of care, however, can vary considerably
depending on the context. For example, tort law imposes a general
duty on all people to avoid negligently injuring others, even total
strangers. Corporate directors are only deemed to have violated their
duty of care, however, if they have acted with “gross” negligence.
Duties of loyalty are among the most interesting and common
form of duties in the business world. The duty of loyalty focuses on
motivations, and especially on the need to ignore one’s own material
self-interest in favor of serving the interests of others. Like the duty
of care, the degree of loyalty demanded depends on the nature of
the business relationship. For example, corporate directors owe their
corporations a very high degree of loyalty, and they should
scrupulously avoid doing anything that would allow them to benefit
at the corporation’s expense. On the other hand, partners in normal
contract relationships owe each other a more modest “duty of good
faith,” which typically precludes them from trying to harm their
contract counterparty, but otherwise allows them to pursue the
course of action that benefits themselves the most.
Duties of disclosure (sometimes called duties of candor) deal with
the communication of information, and also are quite common in the
business world. When a full duty of disclosure exists, the party
subject to the duty must disclose all “material” (important)
information relevant to the relationship or transaction. In other
circumstances, the duty of disclosure is much weaker, and simply
precludes a party from making statements that are false or
deliberately misleading. When the duty of disclosure is very limited,
silence is golden.
When a duty of confidentiality applies, the party subject to the
duty must avoid disclosing to third parties the information that was
entrusted to him or her in confidence. The duty of confidentiality is
assumed to apply in certain business relationships, such as those
between lawyers and clients or between doctors and patients. In
other cases, the duty of confidentiality arises as the result of a
formal contractual agreement, sometimes called a nondisclosure
agreement.

To whom (or what) can businesspeople owe

ethical duties?
If complying with business ethics were always easy and obvious, we
would not need write to a book about it! One of the factors that can
make ethical business decision-making difficult is the wide variety of
parties to whom businesspeople owe ethical duties. A second factor
is that some of the “parties” to whom businesspeople can owe duties
are not human beings. Rather, they are intangible legal entities, like
corporations. Although the idea of owing a duty to an intangible
entity is difficult for many people to wrap their heads around, it is
central to many ethical problems in business. In Chapters 5 and 6,
we discuss in greater detail what it means to owe a duty to a legal
entity.
 Ethical duties frequently arise between different people who
exercise governance roles within a single business organization. For
example, partners in a partnership owe duties to each other.
Similarly, directors and officers of corporations owe duties to the
shareholders of the corporation and to the corporation itself as a
legal entity. Shareholders even owe duties to other shareholders
and, sometimes, to the corporate entity itself. Ethical duties within
organizations are frequently labeled fiduciary duties.
Ethical duties also arise when businesspeople enter contractual
relationships with each other. For example, employees owe duties to
employers, and vice versa. Purchasers owe duties to suppliers, and
suppliers to purchasers. Producers owe duties to customers who
purchase their products.
Contractual relationships between certain kinds of professionals
and their clients give rise to heightened ethical duties. Examples
include the relationships between lawyers and clients, between
doctors and patients, and between accountants and clients.
Finally, businesspeople, like other people, owe duties to the
general public and to society as a whole. In Chapters 2 and 7, we
discuss why people in the world of business should pay attention not
only to how their conduct affects the people inside their
organizations and those with whom they do business directly, but
also to how their decisions affect society at large.

Why should I care about business ethics?

We must admit that, so far, the idea of paying attention to business
ethics seems a bit unattractive. It sounds like hard work. And, in
truth, ethical business decision-making can require thoughtfulness
and self-restraint. Sometimes an ethical businessperson must make
what seem to be, at least at the time, significant sacrifices.
Studying business ethics makes ethical decision-making a bit
easier, however, for at least two reasons. First, studying business
ethics can help you understand the rules that you should use in
making moral business decisions, and alert you to some of the
ethical dilemmas and pitfalls that you are likely to encounter during
your career. Second, business ethics can also teach you some
techniques and strategies that will help you summon the strength
necessary to meet these challenges.
Some readers might still ask, why should I want to understand the
rules, and develop the strength to follow them? In Chapter 2, we
offer some answers to this question. As you’ll see, organizations and
societies with high ethical standards tend to flourish, while those
with weak ethics often fail. The same is true for most individuals.
 2
THE BENEFITS OF ACTING ETHICALLY

Being ethical sounds like hard work. What is

the upside?
Having ethics means following certain moral rules without regard to
your own self-interest. It should not be a surprise, then, that acting
ethically sometimes requires both individuals and organizations to do
things that they would prefer not to do, and to refrain from doing
things that they would like to do. A commitment to ethics means
accepting certain burdens, especially in the short run.
But there are many compensating benefits from choosing to act
ethically—perhaps even especially—in the business world. First and
foremost, embracing ethics in business benefits ethical individuals
and business organizations themselves. But, as we will also see,
when people and organizations behave ethically, the benefits of
ethical behavior multiply. Just as unethical actions impose “external”
costs on others, ethical behavior produces external benefits, for
other people and for society as a whole. For example, when
businesspeople act ethically, society needs to spend fewer resources
enforcing rules; the transactions costs of doing business are lower;
and we avoid costly disasters like the BP oil spill, the 2008 mortgage
crisis, and the LIBOR price-fixing scandal. The benefits of business
ethics can therefore be seen at the individual, organizational, and
societal levels.
Many of the benefits that flow from ethical business behavior are
“public goods,” meaning that they are shared with others. When I
choose to act ethically, I often benefit myself. But others benefit
from my ethical action as well. Unfortunately, as economic theory
predicts and experiments confirm, this means that ethical behavior
tends to be “underprovided,” unless some mechanism exists to
reward ethical actions and punish unethical ones, at least
occasionally. Without such rewards and punishments, many people
eventually default to purely selfish and even unethical behavior. As
discussed further in Chapter 4, this pattern has been seen in
numerous experiments run by psychologists and economists.
This is one of the many reasons why it is important for both
business organizations and societies to find ways to identify and
reward those who act ethically, while ferreting out and discouraging
unethical behavior. In fact, healthy societies and organizations
typically do reward individuals who act ethically (and punish those
who don’t). This chapter explores the many external rewards that
await both individuals and organizations that commit themselves to
acting ethically in business. It also explores another important
upside of ethical behavior for individuals: the substantial “internal”
rewards that acting ethically offers in the form of better health,
greater happiness, and more positive relationships with others.

Won’t I be at a competitive disadvantage if I

always act ethically?
It’s easy to think of being ethical as disadvantageous. How can you
compete against others successfully when you obey the rules of the
game, and they don’t? As this choice of words (compete, rules,
games) suggests, being ethical can indeed be disadvantageous in
“zero-sum games,” in which one person can gain only if another
person loses. If I can only win the game by making you lose, then
winning any way that I can—including winning by cheating—seems
the best strategy for the purely selfish player.
Luckily, zero-sum games are not that common in modern life,
including modern business life. Most of the time, when people
cooperate with each other and act ethically instead of selfishly and
unethically, they generate substantial collective gains. To use the
common economic analogy, people who cooperate receive more pie
by making the pie larger, instead of simply fighting over the size of
their particular slices. For example, when manufacturers tell the
truth about their products, consumers are more willing to buy (and
to buy more) because they have confidence that their purchases will
meet their expectations. Both consumers and manufacturers are left
better off. Similarly, when employers and employees trust each
other, they focus their time and attention on getting the job done,
instead of trying to detect employee misbehavior or looking for
another job. Getting the job done better provides more in sales and
profits for employers, and higher wages and greater job security for
employees.
Of course, an unethical individual or organization can sometimes
do better in the short run by cheating. The key idea here, however,
is that this is generally true only in the short run. Eventually, the
decision to behave ethically is usually advantageous, for both people
and businesses. For example, in his book, Give and Take: A
Revolutionary Approach to Success, business scholar Adam Grant
demonstrates how workplace “givers” who work hard, share
knowledge, and “take the high road” may do more poorly at the
beginning than “takers” who focus only on advancing themselves,
but givers typically outperform takers in their long-term careers.1
Ethical businesses and businesspeople tend to thrive for at least
three reasons, which we explore in greater detail later, but introduce
here.
First, being ethical helps individuals and organizations avoid or
limit the serious, negative legal consequences that can flow from
taking ethical shortcuts that seem advantageous in the short run,
but prove disastrous. (These negative consequences are explored in
greater detail in Chapter 8.) Consider the case of the accounting firm
Arthur Andersen. Formerly one of the “Big Five” accounting firms, in
2002 Arthur Andersen was forced to surrender its license to practice
accounting after being found guilty of criminal charges relating to
the firm’s auditing work for corporate giant Enron, which itself
collapsed in 2001 in the wake of a massive accounting scandal.2 In
the short run, both Arthur Andersen and its partners who handled
the Enron account seemed to benefit from cutting corners, including
destroying documents.3 In the long run, however, the 89-year-old
firm’s felony conviction led to its downfall.4 (Now businesspeople talk
about the “Big Four,” or fewer, accounting firms.) Before you decide
that unethical behavior is the best strategy for you, bear in mind
that in the long run it frequently leads to fines, legal defense costs,
the loss of a business license, or jail time. Conversely, choosing to
behave ethically avoids these costs, leading to better odds of long-
term business and personal success. In some cases—for example,
making the difficult decision to “blow the whistle” on others’
misconduct—may even bring you material rewards.
Second, developing a reputation for being ethical and trustworthy
will bring you opportunities and advantages—such as support from
superiors, loyalty from employees, the trust of customers and clients
—that unethical competitors don’t have. Conversely, indulging in
unethical behavior can damage or even ruin your reputation, limiting
your future opportunities by causing people and organizations to
become unwilling to deal with you. (Even before Arthur Andersen
surrendered its accounting license, it was hemorrhaging clients who
did not want to be associated with its name. Although the Supreme
Court eventually reversed Arthur Andersen’s criminal conviction on
technical grounds—the Court held that improperly vague jury
instructions had been used at trial5—by then, Arthur Andersen’s
business reputation had become toxic, and the firm collapsed.)
Third and perhaps most important to most individuals, there are
significant, intrinsic advantages to acting ethically. As discussed in
more detail below, ethical people, it turns out, generally lead
happier, healthier lives.
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 CHAPTER XVI.
MRS. MASON'S OPINIONS.

TEN days had gone by, and Mrs. Stuart had her foot up
still on a chair, swathed in bandages. She was allowed to
hop downstairs once a day, with Archie's aid, but not to
stand yet.

Mrs. Stuart was by no means a patient invalid. It

seemed to her very hard indeed that she of all people
should be laid aside, very hard that she should have to
suffer pain, very hard that she should be indebted to
neighbours—above all, to the Dunns—for help. Other
people, of course, had their troubles, and must expect to
have them, as a matter of course, but why Mrs. Stuart
should have them was quite another question. She could
only count it "very hard." As for being patient and cheerful
under her trial, who could be so unreasonable as to expect
it of her!

Many a time Mrs. Stuart had heard in Church those

familiar words—"Whom the Lord loveth He chasteneth, and
scourgeth every son whom He receiveth." But it may very
much be doubted how far Mrs. Stuart really listened to the
reading of the Bible in Church; and it may be doubted still
more how far she really understood what she heard. Her
feeling towards God was in no sense the feeling of a child
towards a Father. She had no love for Him, and she knew
nothing of the deep Divine love which will rather send pain
and sorrow than suffer the wilful child to wander on in
courses of evil. Sometimes nothing less than great trouble
will bring the wayward soul to Christ.
 Mrs. Stuart saw nothing of this, however. The love of
God was far away from her thoughts. She only considered
herself a much injured woman; and she felt sure that
nobody had ever had so much to bear as herself; while she
was vexed with the Dunns for their persistent kindness, and
yet more vexed with Archie for his growing friendship with
them.

Undoubtedly Mrs. Stuart was greatly indebted to the

Dunns. Mrs. Dunn had spent whole nights in the cottage,
and had taken turns with Nancy to run in and out by day.
Mrs. Dunn was looking quite fagged with all she had
undertaken, and Mrs. Stuart ought to have been extremely
grateful. But she was not grateful at all. She was only
annoyed with herself and the Dunns and Archie and
everybody—a most uncomfortable state of mind to be in.

Mrs. Mason, living opposite Woodbine Cottage, was

usually a very convenient person in time of illness. Being a
widow, with only one married daughter, and having
consequently no home-ties; being, moreover, a motherly
sort of body, with useful instincts, she liked to be called in
to help where help might be needed.

The very day, however, before Mrs. Stuart's accident,

Mrs. Mason was summoned to her married daughter by
telegram. Had it not been for this, she would as a matter of
course have shared with Mrs. Dunn the care of Mrs. Stuart.

After ten days, Mrs. Mason came home, leaving her

daughter recovered from a sharp little illness; and then she
was speedily made acquainted with events which had taken
place during her absence. The next thing that happened
was Mrs. Mason's appearance in Mrs. Stuart's kitchen, with
a half-knitted stocking, a short time before tea.
 "Now, you didn't expect to see me, did you?" she asked,
in her round comfortable voice, which exactly suited her
stout and motherly figure. "But I'm come. I told Mrs. Dunn
I'd do it for her—get you your tea, I mean, and wash up.
Dear! I never thought I should find you like this—that I
didn't. There's never no knowing what'll happen next, and
that's a fact. Well—I'll put your kettle on to boil, first thing.
And so Mrs. Dunn's been looking after you all this while.
Just like her! She's got enough to do at home, though, and
I told her I'd come instead. But to think now of your
stealing a march on me, like that! To think of it!"

Mrs. Stuart failed to understand Mrs. Mason's meaning,

and she intimated the same in gloomy tones.

"What I mean! Why, I mean the Dunns, to be sure,"

said Mrs. Mason briskly. "The nicest family that's come to
Littleburgh for a year past. And as soon as ever I'm out of
the way, you've gone and stolen a march on me, and got as
intimate with 'em! No, I didn't expect it of you, I did not,
Mrs. Stuart!"

Mrs. Mason shook her head vigorously. But Mrs. Stuart

was in no humour for joking, and she intimated that fact
also in yet gloomier accents.

"A joke don't do nobody any harm," said Mrs. Mason,

"provided it's harmless. There's jokes and jokes. There's a
sort that's better avoided. But I'd sooner laugh than cry
over a worry any day. You wouldn't be half such a skinny
scarecrow of a woman, if you was to laugh oftener, and
glower seldomer over your frets. That you wouldn't."

Mrs. Mason was too useful a woman to be quarrelled

with for her plain-spokenness; but certainly, her remarks
did not lessen Mrs. Stuart's moodiness.
 "That Nancy Dunn is the best and prettiest girl ever I
see!" remarked Mrs. Mason.

Mrs. Stuart grunted.

"Isn't she now?" asked Mrs. Mason.

"I've got nothing to say against her," declared Mrs.

Stuart, with the air of one suppressing truths.

"Shouldn't think you had, nor anybody else neither.

Don't Archie like her?" demanded Mrs. Mason, rising to get
the teapot.

No answer to this.

"Well, if I was you, I'd encourage it in every way I

could. That's what I'd do," said Mrs. Mason emphatically,
rinsing out the teapot. "She's a pretty girl, and a good girl,
and she'll make a good wife to somebody some day. That
girl's had a training that it isn't many girls get now-a-days.
She'll clean up a room in next to no time; and she's first-
rate at washing and ironing; and she's a good cook in a
plain way. Yes; Mrs. Dunn's a wise mother. She's trained up
Nancy to follow in her footsteps. And that isn't all neither;
for she's trained up Nannie to live for God, and to think of
the world that's to come, and not only of just how to eat
and drink and get along."

Mrs. Stuart found something to say at last. She opened

her lips with a resolute, "I don't hold with being so mighty
religious."

"No?" said Mrs. Mason. "How much religion do you hold

with?"

"I'm not one as likes shams," said Mrs. Stuart.

 "Nor me neither," responded Mrs. Mason. "But there's
no sort of shamming about the Dunns. It's real honest
hearty living to God, and trying to do His will. I can tell you,
Mrs. Stuart, I've learnt a thing or two from them already,
though it's so short a time they've been here; and I'm not
ashamed to own it. And I hope I'll be the better for knowing
them. And as for being 'mighty religious'—if fighting against
wrong, and struggling to do right, and helping those that's
in need, and serving God in every bit of daily life—if that's
what you mean by 'mighty religious,' why, I wish there was
a lot more of it in the world. I do, and that's a fact. For it
would be a deal better sort of world."

"I don't like talk," said Mrs. Stuart.

"Nor me neither," assented Mrs. Mason again. "That's to

say, I don't like talk that's not carried out in action. Folks
must talk. It's natural to human nature. And folks 'll talk
mostly of what comes nearest to 'em. There's some cares
most for eating, and they'll talk of their eating. And there's
some cares most for politics, and they'll talk of politics. And
there's some cares most for their children, and they'll talk
of their children. And, dear me, there's some cares only for
themselves, and won't they talk a lot about themselves?
But that's all natural. It's all human nature.

"And when a man cares for religion, and loves God from
his heart—why, don't it stand to reason that he'll speak
sometimes of the things he cares for most? That's not
shamming, Mrs. Stuart. It's shamming if a man talks
religion, and don't let it come into his daily life. And it's
shamming when folks keep all their religion for Sunday, and
make believe to pray to Him in Church, and then never
think of Him at all from Monday morning till Saturday night.
That's shamming, as much as you like. But as for talk—why,
talk's natural—in moderation. And you'll never find Mrs.
Dunn talk too much. No, never."

Perhaps the same could not be said of good-humoured

voluble Mrs. Mason. She brought the teapot from the hob,
and set it on the table.

"There—that's all right," she said, in a different tone,

possibly feeling that she had said enough on one subject.
"I've had my tea before coming, so I don't want any; but I'll
stay to wash up. I've got my knitting. And by-and-by I'll
come in again. So Archie's out with friends to-night? Well,
he's a likely young fellow—sure to make friends. I hope
they'll all be as good friends as the Dunns. And you've had
Mr. Wilmot here, paying you visits? Kind sort of man, isn't
he?—and as good! No sort of sham there neither! But he
don't look as he should. What is come over him?"

Mrs. Stuart did not know that anything had.

"He's not himself," said Mrs. Mason. "Lost all his colour,
and don't walk with half his spirit. He'd ought to take care
of himself. Good people ain't too common in this world. It's
my belief, he works a deal too hard. Yes—there's something
wrong. I'm sure I don't know what."

CHAPTER XVII.
PEOPLE AND THINGS.
 MANY weeks had gone by, and Mrs. Stuart was pretty
well recovered from her accident. She limped a little, it is
true, and was unable to walk any distance; still, on the
whole, she might be counted convalescent.

Archie had been a good son to her through those

weeks. Nobody could question it. Even Mrs. Stuart did not
deny the fact.

It may seem an odd thing to say, considering the

mother's love for her boy, but, undoubtedly, Mrs. Stuart had
not quite forgiven Archie for being in some sort the cause of
her accident. If Archie had not left her all those hours alone,
she would not have gone searching after him in the brick-
fields. Mrs. Stuart was wont to dilate on this very self-
evident truth; while she forgot to mention the equally self-
evident truth that if she had not given way to ill-temper,
Archie would not have left her. Archie had been to blame,
no question as to that. But Mrs. Stuart herself could
scarcely be reckoned blameless.

And Mrs. Stuart was not of a generous nature. When

her foot was at its worst, she seemed to find a particular
gratification in reminding Archie that it was "all his doing." A
generous nature would have shrunk from allowing Archie to
see how much she suffered, for fear he should blame
himself too far.

Archie bore his mother's reproaches patiently—so

patiently that Mrs. Dunn often wondered, looking on. For
she knew the young fellow to be of a quick and hasty
disposition; and she did not know yet how a strong new
principle was taking root in Archie Stuart's heart, and
beginning already to show in his life.
 One result of Mrs. Stuart's accident was a great
pleasure to Archie. His friendship with the Dunns was no
longer a thing forbidden. Mrs. Stuart hardly could prevent
it, after Susan Dunn's kind care of her. But she still did not
care to see more of the Dunns than was necessary; and if
Archie spoke of Nannie, Mrs. Stuart was sure to spend some
sulky hours in consequence.

It was very difficult for him to abstain from speaking of

Nancy; for by this time he thought of her more than of any
other human being. Nancy's pretty face was before his
mind's eye perpetually. When he looked forward to the
future, it was always a future with Nancy Dunn—not always
as Nancy Dunn. But he had not spoken out to anybody yet
of his wish. He wanted his mother to learn to like Nancy
first.

"Why don't you come to see my mother oftener?" he

asked one day, and Nancy answered frankly—

"I don't think she cares to have me come. She always

seems so busy."

This was true, and Archie could not deny it. The thought
troubled him much, but he tried to wait quietly. Meanwhile
he was very often in and out at Woodbine Cottage; and the
more he saw of the Dunns, the more thoroughly he
respected and wished to be like them.

For there was nothing half-hearted, nothing

inconsistent, about these Dunns. They were not great
talkers, but neither did they hide their religion. In Richard
Dunn's life, the leading aim was to serve that dear Lord and
Master who had died for him on the Cross, and this aim was
followed out with steady persistence. If need arose, he
could speak of his heart's desire; if required to do aught
which he believed to be contrary to God's will, he could
refuse quietly, and without bluster. Lesser aims were
included in the one great aim. He was a steady workman;
he sought to keep his wife and children in comfort; he loved
to have a tasteful and well-furnished little house. These
things were right. It was well that he should be the better
workman, because he served first a Heavenly Master; and it
was well that while striving to do God's will, he should seek
to please his wife, and make his children happy.

Things were much the same with Susan Dunn and with
Nancy. Setting first before them the desire to please in all
things a Heavenly Master and Friend, they did, as a matter
of course, their best in all things.

But there was nothing sombre, nothing gloomy, in the

atmosphere of Woodbine Cottage. How should there be?
Richard Dunn was a man of cheerful spirit. You need not
suppose for a moment that he or his family were the less
cheerful because of their religion. Why, how should they be?
Real religion—the religion of Christ—is rest, and joy, and
safety now, and the looking forward to a glorious by-and-
by. That doesn't make people gloomy. No doubt a great
many true servants of God are gloomy, but they find their
gloom in themselves, not in their religion, if it is indeed
according to the teaching of Christ.

You would not have heard merrier children's voices

anywhere in the neighbourhood than in Woodbine Cottage,
or a sweeter laugh than Nancy's; nor would you have seen
a sunnier face than Susan's, or a busier and happier life
than Richard Dunn's. He was always at work upon
something, even in leisure hours; reading a book, or doing
a bit of carpentering, or tending his plants, or having a
game with his little ones. There was no time in his life for
idle lounging, any more than there was in Susan's or
Nancy's for gossiping.

Some people may count it odd to talk of a man being

"at work" when he reads a book or plays with his children.
But there are many different kinds of work. Reading may be
very hard work indeed—not of course just looking at a
shallow article in a paper, or glancing through a worthless
novel, but real steady mastering of facts worth knowing in a
volume of history or science. And though playing with a
child is not hard work, yet it may really be in one sense
work for God, if the father is lovingly trying to win his little
one's heart in every possible way, and to please God in so
doing.

Archie Stuart being much in and out of Woodbine

Cottage, noticed all these items of the way in which his
friends lived and acted, and gradually, he seemed to catch
something of the same spirit. He began to feel that for a
man to live only to himself is not grand; that to please one's
self always is very easy, but not beautiful. He saw slowly,
more and more, how grand and beautiful, aye, and how
manly a thing it is, to be permitted to fight on God's side in
the mighty world-wide battle between good and evil.

No namby-pamby matter this, as Archie soon

discovered. For with all his young vigour and his strong will,
he found soon how little he could do, how strong were the
powers of evil; and then it was that his friends could speak
to him of One "mighty to save," in whose great strength
Archie should, if he willed, be "more than conqueror." And
then, Archie learned to pray.

That was how Archie grew more kind and patient during
the weeks of his mother's illness. He did not think it himself.
He had never found self-restraint harder, or the temptation
to sharp self-defence more keen. But others looking on saw
the difference in him already.

This learning to pray is a great step in anybody's life.

Archie no longer went to Church merely as a dull duty, to
listen to words which had as yet no meaning for him,
because his eyes were not open to their meaning. He went
now to ask God, in common with others, for things which he
and they needed, to offer thanks for things already given.
Both in Church, and in his own little room, he had begun to
draw nearer to the footstool of Christ the King, to know Him
as the Crucified, to trust Him as the Saviour, to be taught of
His Spirit, to bow before Him as Lord.

For all this Archie lost no whit of his growing manliness.

Was it likely? Does any one lose in force or manliness
through daily intercourse with a mind infinitely greater and
wiser than his own? Besides, what is more manly than self-
control, than conquests over one's evil tempers, than a
spirit of kindness and generosity to those weaker than one's
self? Archie was growing in these things more manly, not
less manly, day by day, and many remarked that it was so.
The Dunns saw it especially.

CHAPTER XVIII.
THE GARDINERS.

THINGS were widely different, next door to the Dunns,

from what Archie had found in Woodbine Cottage. It is
astonishing what a change comes over the scene, if one just
passes from one little cottage home into a second, the two
being separated by only a slender wall.

There was not too much religion in the Gardiner

household by any means, neither was there too much of
happy children's laughter, or too much wifely affection, or
too much manliness in the head of the household.

John Gardiner had probably no intention of being

unmanly. Probably, also, he was what people call "a well-
meaning man," that is, he meant to do well, so long as
doing well didn't happen to cross his own inclinations. He
was a man of very strong principle too, after a fashion, his
one leading principle being always, and on all occasions, to
do exactly what he chose, without consulting the
inclinations or wishes of anybody else.

In the workshop, this principle had of course to be in a

measure subordinate to the will of his employers. But at
home it had full swing.

John Gardiner at home counted himself absolute

master, and he insisted on being so too. A wife was, in his
estimation, a useful sort of creature, fit to scour and wash
and cook, fit also to be the victim of harsh words when he
pleased to bestow them. If words failed to bring submission,
he would not object to try the effect of a blow. After which,
no one could rightly speak of John Gardiner as a "manly
Englishman," much as he might desire the term. For a man
who can stoop to strike a woman has forfeited utterly all
claim to "manliness."

But of course Gardiner did not see this. A coward nature

seldom knows its own cowardice. A bully is always a
coward; and there was a good deal of the bully in Gardiner's
nature.

His children shrank away from him habitually, with a

mixture of dread and cunning. Not that they saw much of
their father. He allowed his wife a certain amount out of his
wages for household expenses—expecting a goodly amount
of the same to be spent upon food for himself—and he
came home to eat and to sleep. That was about all.

His evenings were spent elsewhere, always. If his wife

knew where he went, it was by accident, since he rarely
condescended to tell her. Perhaps it is not too much to say
that neither his wife nor his children craved more of
Gardiner's presence in the little home.

If Betsy Gardiner knew little of her husband's doings, he

was not much better acquainted with those of his wife and
children. The eldest girl, Bess, was at sixteen practically
independent. She chose her own friends, followed her own
devices, and was at once blamed and sheltered by the weak
and hasty yet indulgent mother. Betsy Gardiner might slap
her children roughly, under sudden provocation; but to see
them feel the weight of their father's heavy hand was
another matter. She shrank from that; and she shrank from
what might drive the elder girl permanently from home.

The state of things could hardly be wondered at. John

Gardiner was a man who lived distinctly and solely for
himself. He expected everybody and everything in the
household to bend to his pleasure. He gave no love and he
received none. The example of abject self-pleasing—for
such slavery to self is abject and contemptible—was
naturally followed by his children. How should it not be?
There were no softening influences; none of an opposite
kind. The spirit of the household was a reflection of the
father's spirit—how in every way to please and indulge self,
coupled in the case of the children with a constant effort to
shirk blame at any cost.

The Gardiners and the Dunns were not disposed to be

intimate. Naturally two families of such different minds and
views did not suit. Had the Gardiners been in trouble, Susan
Dunn would have been ready at once to help them. But she
did not care for the friendship of Mrs. Gardiner for herself,
or of Bess for Nancy, or of the quarrelsome shrieking
children for her own Dick and Susie.

Two girls could scarcely have been found in the place

more unlike than Nancy Dunn and Bess Gardiner: Nancy,
with her sweet blue eyes, and pretty smile, and modest
dress, and gentle manner; and Bess, with her rough
bearing, her coarse laugh, her conspicuous fringe, her
gaudy dress. They were girls utterly unsuited to one
another. Their bringing-up had been different, their tastes
were different, their pursuits were different, their rules of
action were different.

Yet these two girls were alike in one thing, and that was
in the possession of a naturally warm heart.

Only, with Nannie the warmth had been fostered, the

tenderness had been cherished, till it was as natural to her
to give out love as for a sunbeam to give out warmth. Bess,
on the other hand, had been checked and snubbed, fretted,
neglected, and scolded, till she had grown-up seemingly
hard, and ready to fight the whole world, with all her
natural warmth hidden away beneath a tough outside crust.

The warmth was there still, however. It only needed to

be set free. And nobody would have guessed that gentle
Nancy Dunn would be the one to win her way in through
this crust. Yet so it was.

At first when the Dunns came, Bess laughed at them,

and said scornful words about Nancy's "prim ways." But
whenever the two girls met, Nanny always had a little smile,
and a kind passing word for Bess. And gradually Bess
ceased to sneer. The winning manner and the soft
straightforward eyes were unconsciously gaining possession
of poor Bess Gardiner's frozen-up heart.

Nancy did not know it. She guessed nothing of it yet.

She only thought it rather odd that she should so often
lately have met Bess. Somehow Bess seemed to be always
coming across her path. Bess would say nothing when they
met. She only hung about sheepishly till she had had a
word of greeting, and then rushed away. And Nancy never
gave more than the passing word; for she knew that Bess'
companionship would not be liked by her mother. Nannie
did not know how Bess craved for more, how Bess watched
for her coming, and feasted on the passing word, and would
have run a mile for a second word. If any one had
suggested such a state of things, Nancy would have
laughed and thought the idea absurd.

Yet things had actually come to this pass, one August

evening, when Nancy Dunn had been to speak to Miss
Wilmot at the Rectory, and was walking home—things had
come to such a pass that poor rough-mannered Bess might
almost be said to worship the ground on which Nancy Dunn
walked.

The evening was a lovely one, and Nancy was tempted

to stroll a short distance round on her way home. She chose
a quiet lane, with a hedge on either side, more country-like
than most of the roads round Littleburgh. And halfway
through this lane, she found Bess Gardiner standing alone
doing nothing, only watching her approach.

CHAPTER XIX.
THAT GIRL BESS!

"GOOD evening," Nancy said pleasantly, as she reached

Bess, and was about to pass her.

But Bess, with a sudden movement, placed herself in

front of Nancy.

"You don't never say one word more!" she burst out.
"And I wish you would."

Nancy looked at her in surprise. "Why—what do you

want me to say?" she asked. "I don't understand."

Bess hung her head and was silent. She had spoken
under a momentary impulse, and now shyness seized upon
her. Rough-mannered Bess was by no means wont to suffer
from shyness, and the sensation came as a novelty.

"I'd like to walk along the lane with you," she muttered
at length.

Nancy was perplexed, knowing well that her mother

would strongly disapprove of any intercourse beyond the
exchange of bare civilities between Bess and herself. She
stood still, thinking.
 "I ain't good enough for you. But I'd like a talk with you
sometimes. Don't see why I shouldn't. Might make me
better, you know," continued Bess awkwardly.

"I should like to help anybody," Nancy said, speaking

slowly. "Anybody that wants help. I should like to help you—
if I could," and she hesitated, "but—"

"But you don't choose to be seen walking along of me,"

cried Bess, in loud tones.

"It isn't choosing—indeed it is not," said Nancy,

distressed at the other's look. "Bess, please believe me. It
is only—I always tell mother first—and then—"

But Bess flung herself away, and rushed off, hurt and
angry. Nancy felt sorrowful, fearing that she might have
acted unwisely, and done harm.

When, however, she reached the end of the lane, and

turned into a broader road, there stood Bess.

"I say," the strange girl burst out, "you aren't angered?"

"No," Nancy answered, with a little smile; "I'm only

sorry."

"I say," repeated the other, "d'you mean to say you do

just as your mother tells you?"

"I hope so," Nancy said gravely. "Why, Bess, doesn't the
Bible tell us to obey our parents? And she's such a dear
good mother, I couldn't bear to make her unhappy."

"Oh, well; mine's a different sort from that," said Bess.

 "But if she is—if she were—that wouldn't make any
difference about what's right for you," urged Nancy.

"Oh, I think it does! I've had pretty near enough of my

home," said Bess recklessly. "I'll go and live with somebody
else."

"O no, Bess, you won't," said Nancy seriously.

"But I mean to," responded Bess. "So there! I did think

I'd have a talk with you—and you won't."

Nancy's eyes looked into those of Bess.

"Don't be vexed," the gentle girl urged. "I'll have a talk

with mother, and she'll let me see you, I'm sure."

"She don't like girls as wears hair like mine. I know,"

said Bess, with a careless shake of the unkempt mass which
descended low on her freckled forehead. "I've seen her look
me over. I know."

"Mother doesn't think that sort of thing respectable for

girls in our position, Bess," said Nancy quietly.

"Nor you don't neither," said Bess.

"No," said Nancy.

Bess shoved back the loose mass, stared at Nancy and

suddenly burst into tears.

"I'd be respectable if I could," she sobbed. "Nobody's

never taught me; and I don't know how. I'd learn from you,
that I would—and you won't help me! I'd best give up,
that's what I'd best do! I'll give up, and I'll never speak one
word to you again, that I won't."
 But Nancy's hand was on Bess' arm, detaining her,
when she would have rushed away.

"No, Bess," Nancy said, "you won't give up. You'll try
harder. And you'll come home with me now and see mother,
and she'll tell you what to do."

"Come home! With you!" gasped Bess.

"Yes; come straight home with me now."

Bess said not another word. She gave herself up to

Nancy's guidance, and followed her meekly into Woodbine
Cottage. The two girls hardly spoke by the way; and indeed
the distance was very short.

Susan Dunn happened to be alone indoors, her husband

having taken out the two children for a short walk. Susan
was busy over some mending. She looked up with a smile
on Nancy's entrance, but the smile passed into an
expression of doubtful welcome, as her eyes fell on Nancy's
companion.

"Mother, I've brought Bess Gardiner to you," said Nancy

simply. "She isn't happy at home, and she wants some one
to help her to be better. And I didn't know what you'd like
me to do, so I've brought her to you. I knew you'd be glad."

Was Susan glad? With all her kind-heartedness, she had

very particular notions about proper acquaintances for
herself and her children, more especially for Nancy. And she
had taken such pains to avoid any kind of intimacy with
those Gardiners. For a moment Susan really did feel quite
provoked, and the only answer she made to Nancy's appeal
was a slow, "Well—sit down."

Bess stood doggedly upright.

 "I told you so!" she muttered to Nancy. "And I'm not a-
going to stay where I'm not wanted."

"Mother, Bess isn't happy, and she wants help," pleaded

Nancy.

"Not likely to be happy with their sort of way of going

on," said Susan. "But if there's anything I can do—Sit
down," she repeated.

No, Bess declined to obey. She came a step forward,

with glowering eyes.

"It wasn't my wish to come," she declared. "I'm not one

of them who'll go where they're not wanted. And she'd
ought to have known better than to bring me. I don't say
I'm fit company for her, neither. Only, she's always got a
kind word for me—and I did think—maybe—but it don't
matter! I'll go my own way, and I'll never trouble nobody
again—never It don't matter. Folks are born to be
miserable, I suppose. And there's nobody to care. It don't
matter. So, good-bye."

"O mother!" cried Nancy in distress, tears filling her

eyes, as Bess turned away.

But it was not Nancy's cry which made Susan Dunn

stand up and move swiftly between Bess and the door, with
a face which had softened all at once into motherly pity.
Another thought had come to Susan—the thought of One
who did care, who cared so much for poor rough Bess as to
have given up His life for her on Calvary. How would it be in
His eyes, if Susan let this poor untaught girl wander away
without the help which she craved?

"Good-bye; I'm going," repeated Bess hoarsely. "Let me

go."