Ethics and Compliance
At PG&E, we are committed to complying with both the letter and the spirit of the law, and our own Code of Conduct at all times. We hold ourselves to these standards in all actions, both as a business and as individuals. Over the past two years, we have worked to strengthen our ethics and compliance program and performance even further. That includes a consistent focus on creating a culture where every employee is empowered to speak up to share new ideas and raise concerns—including those about safety and misconduct, as well as potential violations of laws and regulations or PG&E policies, standards and procedures.
Our Approach
Ethics and compliance at PG&E are managed on three levels:
Business-Wide
At PG&E, we are committed to complying with both the letter and the spirit of the law and our own Code of Conduct at all times.
Within senior leadership, ethics and compliance are managed by the Chief Ethics and Compliance Officer (CECO), who reports to the PG&E Corporation Chairman and CEO. The CECO has additional reporting responsibility to the Audit Committees of the PG&E Corporation and Pacific Gas and Electric Company Boards of Directors, and the Compliance and Public Policy Committee of the PG&E Corporation Board.
The CECO is responsible for:
- Building a best-in-class ethics and compliance program and managing its implementation
- Overseeing enterprise-wide programs for compliance monitoring, reporting, assessment and remediation
- Strengthening ethics- and compliance-related training
- Reinforcing PG&E’s ethics and compliance culture
- Identifying areas of ethics and compliance risk, and developing action plans to prevent, detect and correct risks and issues
As part of our enterprise-wide strategic planning process, PG&E’s senior executives from every line of business meet annually to review and assess our plans to manage compliance, including the identification and assessment of compliance obligations for each line of business. Broadly, this process enables PG&E to assess compliance obligations, determine the best way to address them and then allocate resources to successfully implement our strategy.
Each line of business follows a rigorous process to assess the likelihood and impact of various compliance risks. The results of these assessments are calibrated across the enterprise, objectively applying the same criteria to all areas of operational focus. Final plans for each line of business include developing mitigation strategies to improve compliance performance. These plans inform PG&E’s deployment of resources.
To provide guidance on conduct requirements, PG&E maintains codes of conduct for the following:
In addition, PG&E maintains a Chairman’s Ethics Council—comprised of management and union-represented employees at multiple levels—that helps raise and address issues relating to ethics and conduct at PG&E. The Council meets regularly throughout the year, including one meeting that is open to all employees.
Boards of Directors
Certain PG&E Corporation and Pacific Gas and Electric Company Board committees have specific oversight responsibility for compliance management in their respective areas:
| Entity | Risk Oversight Responsibilities |
|---|---|
| Compliance and Public Policy Committee Footnote 1 |
|
| Audit Committees |
|
| Nuclear, Operations and Safety Committee Footnote 1 |
|
- 1. Refers to committees of the PG&E Corporation Board of Directors only. Return to table
For a full description of Board committee oversight responsibilities, please see the webpages of the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company, as well as our 2016 Joint Proxy Statement.
Lines of Business
Each of PG&E’s lines of business has compliance-focused employees who are responsible for the implementation of the line of business’s compliance program, including the identification and review of its respective enterprise and operational compliance obligations. The line of business compliance programs are overseen by the business’s senior leaders, who systematically lead the program through regular Risk and Compliance Committee meetings.
2015 Milestones
“We’re committed to speaking up about issues, following the rules and fortifying our culture. That’s the foundation for an open, transparent environment that prioritizes safe and ethical behavior.”
— Tony Earley, Chairman of the Board, Chief Executive Officer and President of PG&E Corporation
PG&E continued to take actions to foster an environment that prioritizes safe and ethical behavior. In 2015, we formed two new governance bodies to help drive and coordinate our compliance activities:
- Compliance and Ethics Committee: Led by the CECO, this senior-officer-level committee ensures coordinated, strategic guidance and oversight of the compliance and ethics program. This committee helps drive policy to provide reasonable assurance that PG&E achieves its financial, operational and strategic objectives in a manner consistent with its compliance obligations.
- Compliance and Ethics Leadership Team: Consisting of non-officer leaders from across PG&E, this team leads an ongoing strategy to enhance PG&E’s compliance and ethics program. This group shares best practices and coordinates across lines of business on compliance and ethics approaches, goals and programs.
We also created opportunities to reinforce the importance of speaking up and fostering an overall culture of compliance. One such example was inviting Dr. Kelly Richmond Pope, a renowned expert in business ethics, to address our workforce on Compliance and Ethics Day with more than 1,400 employees in attendance.
Measuring Progress
PG&E mandates annual compliance and ethics training for all employees, and requires that management employees annually certify that they have read, understand and will comply with our Employee Code of Conduct.
In 2015, more than 99 percent of employees completed our annual compliance and ethics training. The in-person training is facilitated by PG&E leaders, starting with the Chairman and CEO training his team, and is cascaded down through the organization. The sessions use videos to present employees with situations that they may face in the workplace, and is conducted in workgroups to stimulate discussion and encourage participants to share experiences.
| 2013 | 2014 | 2015 | |
|---|---|---|---|
| Compliance and Ethics Training | 99.9% | 99.8% | 99.9% |
| Code of Conduct Training | 99.9% | 99.8% | 99.8% |
- 1. For a variety of reasons, a statistically small number of PG&E’s employees are unable to attend a training session in any calendar year. Return to table
All-Employee Meeting with the Chairman’s Ethics Council
The Chairman’s Ethics Council is designed to help raise and address issues relating to business ethics and conduct at PG&E. In 2015, the Council’s all-employee meeting focused on the importance of creating a culture where all employees are comfortable speaking up.
We also continued to operate our Compliance and Ethics Helpline for employees. The volume of Helpline calls that we received in 2015 was roughly 3.9 calls per 100 employees, falling within the normal range of 0.3 to 10.3 calls per 100 employees, according to a benchmark report prepared by NAVEX Global. The total call volume increased 23 percent over 2014, with a 16 percent increase in calls requesting guidance. This indicates that more employees are turning to the Helpline for advice before taking actions
Looking Ahead
PG&E is committed to establishing a best-in-class ethics and compliance program, and we intend to drive continuous improvement by:
- Encouraging a “speak up” environment through training and communications campaigns
- Engaging our two new governance bodies to develop and drive cross-organizational enhancements to PG&E’s compliance and ethics program
- Adapting our employee engagement survey to assess PG&E’s ethical culture and measure progress
- Strengthening our processes to ensure all allegations of employee misconduct are consistently investigated and remediated
- Enhancing our approach for identifying and mitigating compliance-related risks
- Continually improving enterprise-wide monitoring and analytics
- Optimizing the compliance portion of our integrated planning process
- Implementing a compliance maturity model that will drive consistent, programmatic advancements across PG&E’s lines of business