Act II begins in Sir Robert's morning room with Lord Goring in the midst of advising him on a plan of action. He insists that Sir Robert should have confessed to his wife long ago and promises to talk to her about her unyielding morals. Throughout the scene, Goring will—in a marked shift in his apparently flippant tone and amoral pose—also point out the gravity of Sir Robert having sold himself for his fortune. Sir Robert recounts his mentorship by Baron Arnheim when he was a young and poor cabinet minister, well born but penniless. He succumbed to Arnheim's gospels of wealth and power, coming to see wealth being the most important weapon of the modern age and power over others as life's utmost pleasure. At some level, Sir Robert still subscribes to these doctrines.
Goring takes stock of the situation: a public confession remains impossible as it would ruin Sir Robert's career, and the two agree that Sir Robert should fight it out, though—in another suspense-building device—the latter still refuses to tell his wife. Also, Lord Goring delicately reveals that he and Mrs. Cheveley were once engaged. As their first plan of attack, Sir Robert decides to write the Vienna embassy to investigate Cheveley's life; Lord Goring is nonplussed by the proposal as he suspects Mrs. Cheveley is a woman who finds scandals as becoming as a new bonnet.
Lady Chiltern then enters the room, having come from a meeting of the Woman's Liberal Association. After some banter about bonnets and a farewell between Goring and Sir Robert, the latter leaves the room, and Lady Chiltern takes Goring aside to discuss the recent conflict. When she asks Goring if she is right in her opinion of her ideal husband, Goring, gesturing toward Sir Robert's past, warns that all men must at some point compromise themselves in public life and that life can neither be lived nor understood without charity. The lord then pledges his assistance to a Lady Chiltern shocked by his sudden seriousness and perplexed by his apparently unwarranted advice.
The first half of Act II is something of an interlude after the climatic conclusion of Act I, providing the background of Sir Robert's secret scandal and introducing Lord Goring into the play's intrigue. Beginning with the story of Sir Robert's "tragic" fall, it presents Sir Robert's views of modern life and poses Lord Goring as a sort of helpmate to the Chilterns: counselor to Sir Robert and teacher to the virtuous Lady Chiltern.
Sir Robert developed his views on modernity while under the tutelage of Baron Arnheim, a mysterious foreign aristocrat perhaps analogous to Lord Henry from The Picture of Dorian Gray. Notably Sir Robert's corrupter—one he shares with Mrs. Cheveley—is shrouded in erotic connotations (recall Mrs. Cheveley's ambiguous remark to Sir Robert in Act I: "The Baron taught me that among other things"). Indeed, in remembering how the Baron—with a "strange smile on his pale, curved lips"—lead him through his gallery of treasures, Sir Robert describes an enchantment with his old mentor that could be read as an erotically-charged seduction. One wonders what exactly the Baron taught his student. It is not for nothing then that Sir Robert's relations with Arnheim predate his respectable marriage and must remain secret.
Arnheim expounds a "philosophy of power" and "gospel of gold." Though ostentatious with his fortune, the Baron dismisses luxury as mere backdrop: power over others remains the only pleasure worth knowing. Toward these ends, wealth is the weapon of the age and the prime mover of modernity. For Lord Goring, Arnheim's is a "thoroughly shallow creed"—a somewhat paradoxical critique since the dandy would revel in the shallowness of appearances, luxury, and artifice. Perhaps what the dandified Goring criticizes is Arnheim's subordination of luxury and its pleasures to those of domination. To recall our discussion of dandyism from the Context, Arnheim's doctrines are clearly anathema to the dandy's idle and lighthearted lifestyle. If Arnheim would conquer the world, Goring would—as the stage notes from Act I indicate—play with it.