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SCCE 2013 Regional Compliance & Ethics Conference Anchorage, AK

Barbara Harmon

Compliance Program Supervisor

Alyeska Pipeline Service Co.

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• Alaskan company that maintains and operates the 800 mile long Trans Alaska Pipeline System on behalf of five owner companies

• 800 employees; 1,200 contractors

• ~ 750 regulatory commitments; 22 agencies (federal, state, local) with jurisdiction

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� Program design and implementation

� Two Approaches to Program Maintenance

�Rational - Classical Approach

�Creative - Romantic Approach

� Quality and Balance

Your company has invested time and resources into designing and implementing a compliance & ethics program that incorporates the 7 elements:

1. Appointed a Compliance & Ethics Officer, a Compliance Committee; the Board has been properly informed

2. Written a code of conduct and compliance and ethics policies and procedures

3. Rolled out basic compliance and ethics training

4. Established periodic monitoring and auditing schedules

5. Taken steps to prevent and detect criminal conduct

6. Established methods to raise concerns

7. Have methods to investigate and resolve concerns

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PROGRAM MAINTENANCE

Two approaches to compliance management:

The Compliance Classic focuses on the details

and the inner workings of the compliance and

ethics program.

The Compliance Romantic focuses on the big

picture utilizing creativity and intuition.

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Classic ~

Romantic ~

Which approach do you take?

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~ Which approach do your executives/board take?

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ACHIEVE PEACE OF MIND(with regards to company compliance & ethics program)

Compliance Maintenance is best achieved by embracing both the rational and the intuitive

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� PERFORMANCE MONITORING = utilize your “classical” rational management techniques and analysis

� TRAINING & COMMUNICATION = use “romantic” creativity and intuition/ soft skills to create a culture, and ensure people know expectations for business behavior

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Think of it like

SCHEDULED MAINTENANCE

� Key Metrics Tied to the Seven Elements1. Program Management/Oversight

2. Policies & Procedures

3. Training & Communication

4. Monitoring & Reporting

5. Enforcement

6. Concerns Reporting

7. Response & Resolution

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1. Program Management/Oversight -

� # Regulatory Agency Concerns/Enforcement Notifications

� # Board Presentations/ Executive Reviews and/or

Compliance Committee Meetings

2. Policies & Procedures -� % of Methods of Compliance Documents That Are Current

3. Training & Communication -� % Regulatory Training Complete

� % Compliance & Ethics Training Complete

� # Newsletters or Messages from the President

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4. Monitoring & Reporting -� # Risk Assessments, Internal Audits completed

� # Compliance Performance Reports Submitted to Board/

Executives per Year

� % of Required Reporting to Regulatory Agencies Complete

5. Enforcement-� % Completion of All New Hire Background Checks &

Promotions Internal Background Reviews

� # Employee Recognitions

� # (and type) of Formal Disciplinary Actions

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6. Employee Concerns -� # Employee Concerns/ Hotline Resolution Actions

� % of Investigations Substantiated

7. Response & Resolution -� % Compliance-related Corrective Action Closure

Comments Reviewed by Compliance Manager to Ensure

Appropriate Resolution

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Ho-Hum Trending

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2008 2009 2010 2011

50 30 40 50

# of Regulatory Agency Unsat. / Warnings per Year

0

100

200

300

400

500

600

700

800

2008 2009 2010 2011

Total # Regulatory Agency Inspections &

Surveillances per Year

Satisfactory Unsat./Warning

Ho-Hum Trending

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Improved Trending

OSHA Compliance 2010 2011

Total OSHA Recordable Incident Rate at Our Company 0.23 0.26

Days Away From Work Cases (DAFWC) Accident Rate 0.00 0.04

Our Company vs.

National Pipeline Industry

Incident Rates

National PL

Industry Average

Rate 2010

Our

Company

2010

Our

Company

2011

Total OSHA Recordable Incident

Rate 2.50 0.23 0.26

Days Away From Work Cases

(DAFWC) Accident Rate0.90 0.00 0.04

See Bureau of Labor Statistics www.bls.gov/iag/tgs/iag_index_alpha.htm

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Ho-Hum Trending

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2008 2009 2010 2011

100 110 100 150

# of Employee Concerns per Year

2008 2009 2010 2011

Core 35 40 20 10

Non-Core 60 60 60 90

Consultation 5 10 20 50

Substantiation Rate 15% 25% 60% 70%

Core = a concern related to safety, system integrity, or HIRD

# of Employee Concerns per Year

MANAGE YOURSELF

� Five Tools of Wisdom

INSPIRE OTHERS

� Using Compliance Violation Headlines to Spice Up Your Board Meeting Reports

� Ethical Dilemma Videos

� Compliance & Ethics Week

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Five Tools of Wisdom for the Modern Compliance Professional

1. There is a Way Through Every Block

• Remember there’s a solution for everything

• Utilize the wisdom of others

• Shift your thinking. How can you look at it differently?

• What do I have control over? Focus on the aspects of

the situation that you can influence or control.

• Take a personal break ~ Do something else for a while.

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Five Tools of Wisdom for the Modern Compliance Professional

2. Understand Through Compassion or You

Will Misunderstand the Circumstances

• Get the facts

• In this application, ‘compassion’ doesn’t mean pleasing

the other person and their agenda. It does mean

listening openly and ferreting out the neutral reality of

the situation

• Avoid over-reacting or under-reacting – appropriate

level of response

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Five Tools of Wisdom for the Modern Compliance Professional

3. When a Situation Presses Upon You~ Start ~ and the Pressure Will be Off

• Be brave. Step forward and start working on the issue.

• The longer we churn an issue, the bigger and more

burdensome it becomes.

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Five Tools of Wisdom for the Modern Compliance Professional

4. Embody the Highest Values, and the Path Forward Will be Made Clear

• Remember your Code of Conduct, as well as your own

sense of principles and ethics.

• Pressure test everything against the fundamental

values of the organization. Trust the solutions will

come forward.

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Five Tools of Wisdom for the Modern Compliance Professional

5. Recognize the Other Person is You(Find Commonality)

• Put yourself into the other person’s situation and

perspective. Practice seeing what you have in

common. Listen.

• When we polarize with others and focus on our

differences rather than our commonalities, we can

block the solution from coming forward.

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EXAMPLES OF CREATIVE WAYS TO

COMMUNICATE A CULTURE OF COMPLIANCE

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Use

Compliance

Violation

Headlines to

Spice Up

Your Next

Board

Meeting

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A Compliance & Ethics “(ACE) Soap Fable” Storyboard

1. Title, IntroOur Company Presents…AAAA CCCCompliance & EEEEthicsACE Soap Fables

2. DISCLAIMER:The scenarios depicted in this video

are purely fictional and meant only for educational

purposes. Persons in this video are amateur

wanna-be actors and by no means actually behave

this way in real life, nor support the life-style

choices depicted.

3. Video employee discussions posing ethical

dilemma

4. Dramatic organ music swells as the Narrator

reads a couple of silly soap opera questions (e.g.

“Should Chris have gotten more than 2 hours of

sleep before reporting to work?”; “Will Ginger’s

sister’s cousin’s brother’s best friend lose his

license?” …Stayed tuned for the next exciting

episode of ACE Soap Fables…But first, a word from

our Sponsors…

5. Office Interview with Executive or Manager

accountable for that business area citing from the

Code of Conduct what behaviors are expected.

6. And the Moral of the Story is…

Key Point

(cue organ music. Exit slide: Stayed tuned for the

next exciting episode of ACE Soap Fables..)

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When is it inappropriate

to don your company

logo-wear in

public? Review our

Political Activities policy

Are you aware of our

policies with regards to

data and images

generated or stored on

company IT

equipment?

Do you understand what

a conflict of interest is?

Review expectations for

avoiding any appearance

of conducting company

business for personal

gain

What is our policy with

regards to protecting

confidentiality?. Review

when care should be taken

in communicating

confidential employee

information

What should you do if a

vendor or person seeking

to do business with our

company offers you a gift

or entertainment?

Did you know that it’s illegal

for the general public to

possess eagle

feathers? Review our

Environmental Protection

policies regarding reporting

dead or injured protected

species.

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These videos use humor and melodrama to examine a number of

compliance and ethics issues that our employees may face. Each vignette

will help employees to understand how to apply our Code of Conduct to

their business actions and decisions.”

A Compliance & Ethics “(ACE) Soap Fables”

“Our employees and contractors are expected to conduct business in a

manner that conforms to the highest ethical and legal principles.

“If you have had too much too much to drink

and only a couple of hours of sleep - you may

still be legally under the influence of alcohol.

Should you report to work? Watch this

video to review Code of Conduct

expectations to provide a safe workplace

that is drug and alcohol free.”

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Video Example

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Compliance

and Ethics

Week

Examples

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Quality can be recognized, but not defined

� What makes a mechanic “good” ?

� What makes a program “good”?

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Achieving inner peace:

Nurturing the right maintenance strategy to

ensure sustainability

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Monitor PerformanceManage Yourself

1. There is a Way Through Every Block

2. Understand Through Compassion or You Will

Misunderstand the Circumstances

3. When a Situation Presses Upon You ~ Start ~ and the

Pressure Will be Off

4. Embody the Highest Values, and the Path Forward Will

be Made Clear

5. Recognize the Other Person is You (Find Commonality)

Inspire Others

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Everybody…(to the tune of “This Land is Your Land”)

Compliance and Ethics ~ It can get crazy

If you over-focus ~ or get too lazy

Monitor performance

Nurture self and others

Seek a ~ balance to set you free

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