CORPORATE GOVERNANCE Code OF CONDUCT FOR EMPLOYEES
 
STANDARDS FOR PERSONAL CONDUCT AND BUSINESS DECISIONS
Code of Conduct Handbook, Revised 2007
 
Core Values
How to Report Questionable Activities
Overview of Standards and Key Compliance Areas
Employee Conduct Standards
Conflict of Interest Standards
 
Key Compliance Areas
Compliance & Ethics Decision-Making Checklist
Waivers of Code of Conduct
References & Resources
 
CONFLICT OF INTEREST STANDARDS

You’re expected to do your job for the benefit of PG&E, its customers, and its shareholders. A conflict of interest occurs when your private interests interfere in any way, or even appear to interfere, with the interests of PG&E as a whole. A conflict of interest can arise if you take actions or have interests that may make it difficult for you to perform your company work objectively and effectively.

Influencing Business Decisions for Personal Gain

When you represent PG&E, you must avoid any real or apparent conflict between your interests and those of PG&E. A potential conflict of interest exists if you participate in or attempt to influence a decision or transaction that could materially affect the value of a “financial interest” held by you, a member of your family, or other person with whom you have a close relationship. A “financial interest” is a) any investment in a privately held business or b) an investment equal to one month of your base salary or more in a business’ publicly traded stock. (Do not include indirect holdings of stock via mutual funds when considering this threshold.)

If you have any doubt about potential conflicts, the following steps must be taken:

  1. You must disclose the “financial interest” and potential conflict to your supervisor in writing.
  2. Your supervisor must determine if there is a conflict of interest. A conflict of interest exists if a) the decision or transaction could materially affect the value of the “financial” interest, or b) your continued involvement with the decision or transaction could create the appearance of impropriety.
  3. Your supervisor must document in writing whether a conflict of interest exists and obtain the written concurrence of any other appropriate decision-maker.
  4. If your supervisor determines that there is a conflict of interest, he or she must exclude you from participating in the decision or transaction or adopt other effective measures that would prevent the conflict.

Favored Treatment

Do not use your position to obtain or provide favored treatment for yourself or others with whom you have a personal relationship. This can include any business matter, including hiring or promoting employees, selecting contractors or vendors, or participating in non-public investment opportunities such as Initial Public Offerings (IPOs). You also may not take for your own benefit any PG&E business opportunity that you discover through the use of company property, information, or your position. Disclose any potential conflicts to your supervisor, and ensure that the appropriate decision-maker concurs in writing if you’re allowed to remain in a situation that could raise a perception of favored treatment.

Accepting or Giving Gifts

Accepting or giving a gift in a business setting can create a sense of obligation or the appearance of obligation. A gift can be anything of value, including such items as a ticket to a sporting event or play, a non-business meal, a bottle of wine, a coffee cup, a free service, a special discount, or an all-expense paid trip to a conference or trade show. Cash is considered to be compensation, so you may not accept or give cash or a cash equivalent (such as a cash-redeemable gift card) as a “gift.”

Accepting Gifts

PG&E forbids employees, as well as members of their immediate families, from accepting gifts from contractors, vendors, consultants, or similar business contacts doing business with or seeking to do business with PG&E, unless all six of the following conditions are met:

  • The value of the item must be less than $100, and the value of all gifts from one business contact during a 12-month period must not exceed $250. A gift that exceeds either value must be approved by your officer. Any such gift to an officer must be approved by the officer’s supervisor.
  • The item is customary and does not create any appearance of impropriety.
  • The item imposes no sense of obligation on the receiver.
  • The item results in no special or favored treatment.
  • The item could not be considered extravagant, excessive, or too frequent considering all of the circumstances, including your ability to reciprocate at company expense.
  • The item is not concealed in any way.

If circumstances make it appropriate to accept a gift that exceeds either value threshold, the officer granting approval must retain the following documentation:

  • The identities of the giver and recipient of the gift,
  • The date the officer approved the gift,
  • A brief description of the gift,
  • The business reason for the gift, and
  • An estimated value of the gift.

A gift no longer is considered a gift if within 30 days the recipient either 1) returns the gift to the giver or 2) reimburses the value of the gift to the giver from personal funds.

“Customary business meals” are not considered gifts. These are routine meals, similar in cost to your own meals when you entertain clients.

In addition to the restrictions on gifts, you and members of your family must never accept a loan, service, or payment from a contractor, vendor, consultant, or similar business contact under terms that aren’t available to the general public.

Giving Gifts

PG&E forbids employees from giving gifts funded by PG&E unless all six of the following conditions are met:

  • The value of the item must be less than $100 and the value of all gifts to one business contact during a 12-month period must not exceed $250. A gift that exceeds either value must be approved by an officer.
  • The item is customary and does not create any appearance of impropriety.
  • The item imposes no sense of obligation on the receiver.
  • The item results in no special or favored treatment.
  • The item could not be considered extravagant, excessive, or too frequent considering all of the circumstances, including the recipient’s ability to reciprocate.
  • The item is not concealed in any way.

If circumstances make it appropriate to give a gift that exceeds the employee’s authority to approve, the officer granting approval must retain the following documentation:

  • The identities of the giver and recipient of the gift,
  • The date the officer approved the gift,
  • A brief description of the gift,
  • The business reason for the gift, and
  • An estimated value of the gift.

“Customary business meals” generally are not considered gifts. These are routine meals of reasonable cost provided for business contacts. However, a business meal for an elected or appointed governmental official may be considered a gift under the laws governing the conduct of public officials. Please refer to the Working with Government Officials: Compliance with Political Laws handbook.

Special rules apply in certain gift-giving situations:

  • All gifts to non-profit entities must be approved by the Charitable Contributions Department.
  • A gift to a political candidate, committee, governmental entity, or elected or governmental figure must be approved by the Governmental Relations Department. (For more information, see the Political section of this handbook and the compliance booklet, Working with Government Officials: Compliance with Political Laws.)
  • An “in-kind” gift (e.g., used construction or office equipment) also is considered a disposal of a corporate asset. (For more information, see the Corporate Assets section of this handbook.)
  • Federal law governs gift giving when working outside the USA or with a representative of a foreign government. (For more information, review the Foreign Corrupt Practices Act section of this handbook and the compliance booklet, Conducting Business Outside the USA: Compliance with Foreign Business Laws.)

Loans, Advances, or Guarantees of Obligations

PG&E prohibits loans or advances of corporate funds to its employees, officers, or Board members, and does not guarantee their obligations. It also prohibits loans, advances, or guarantees for friends and family members. This policy does not apply to employees participating in programs that are broadly available including, but not limited to, relocation benefits, the cashless exercise of stock options, education reimbursements, 401-K loans, the corporate credit card program, and expense advances.

Holding an Elected or Appointed Office

If you hold an elected or appointed office while employed by PG&E, notify the Law Department and excuse yourself from involvement with any issue or decision that could create or appear to create a conflict of interest. Seek advice from your civic organization’s legal counsel and from the Law Department.

If you hold a public office, your first responsibility during work hours remains your job. Your supervisor may, however, from time to time and work load permitting, authorize you to perform public service on company time.

Outside Employment

You must take special care when engaging in outside employment activities. You’re not permitted to have outside activities that compete with products or services offered by PG&E. (If you’re represented by a bargaining unit, this restriction applies only to products or services offered by your line of business.)

The types of activities to avoid include the planning, design, manufacture, sale, installation, or maintenance of any commodity, equipment, or service that our lines of business currently provide or have known plans to provide.

Also, even if these requirements are met, you should take the following precautions to avoid a conflict of interest:

  • Don’t participate in an outside employment activity that could have an adverse effect on your ability to perform your duties for PG&E.

  • Don’t use company time or assets for your own business or other job.

  • Don’t solicit work from PG&E for your business or other employer based on inside knowledge of the company or contacts, and don’t solicit PG&E employees, vendors, or customers while at work. Local management has discretion to allow passive solicitation, such as a poster on a bulletin board or a catalogue on a lunchroom table.

  • If, during non-business hours, you solicit vendors or customers with whom you interact for PG&E, you must ensure that your solicitation does not create an appearance of impropriety or in any way imply that the vendor’s or customer’s dealings with PG&E will be affected by the response to your solicitation.

Discuss questions about permissible outside employment activities with your supervisor and document your joint conclusion.

 

 

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