During a fifth day in the witness box, the former Downing Street spin doctor told of what happened after royal editor Clive Goodman was held and police swooped on his newsroom on August 8 2006.
Goodman and private investigator Glenn Mulcaire were convicted of hacking voicemails later that year.
Mr Coulson, 46, then resigned in 2007. Earlier in the trial, Goodman, 56, said Mr Coulson had put pressure on him to plead guilty to phone hacking and say he had been a "lone wolf".
But yesterday Mr Coulson denied the accusation, and said he had acted under his duty of care to an employee. He said: "It was very shocking and I wanted to make sure the right things were being done from the paper's perspective."
Mr Coulson said it was not his job to launch an investigation. And, while he did not hinder the police probe, he did not volunteer information either. He said: "I never told him (Goodman) he should plead guilty, nor did I tell him not to plead guilty."
Mr Coulson, of Charing, Kent, denies conspiring to hack phones and commit misconduct in a public office. All seven defendants deny the charges against them. The trial continues.