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. To accomplish this, PG&E promotes a culture in which employees are empowered to raise concerns and are supported by a structure to ensure compliance.
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Compliance and ethics at PG&E are managed on three levels:
Within senior leadership, compliance and ethics are managed by the Senior Vice President, Chief Ethics and Compliance Officer and Deputy General Counsel (CECO), who reports to the PG&E Corporation Chief Executive Officer (CEO) and President. 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:
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 compliance obligations, including establishing focus areas for the year. Broadly, this process enables PG&E to assess compliance risks, determine the best way to address them and then allocate resources to successfully manage our work. In 2016, we focused on strengthening the integration and management of regulatory compliance risk and operational risk.
In addition, we developed and implemented a standardized framework for PG&E’s lines of business to enhance their respective compliance and ethics programs. The framework is composed of eight elements derived from the U.S. Federal Sentencing Guidelines. The framework also provides an objective assessment tool to measure PG&E’s overall compliance program. We completed an initial assessment of each line-of-business compliance program in late 2016, and established maturity targets for 2017 and 2018.
Two management-level governance bodies help drive and coordinate our compliance activities:
To provide guidance on conduct requirements, PG&E maintains codes of conduct for the following:
In addition, we maintain a Chairman’s Ethics Council—composed 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 substantive areas:
|ENTITY||RISK OVERSIGHT RESPONSIBILITIES|
|Compliance and Public Policy CommitteeFootnote1a|
|Nuclear, Operations and Safety CommitteeFootnote1b|
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 2017 Joint Proxy Statement.
Lines of Business
Each of PG&E’s lines of business has employees who are responsible for implementing the line of business’s compliance program. The line of business compliance programs are overseen by the respective senior officer for each line of business.
In 2016, PG&E focused on enhancing our governance structure and “speak up” culture, which aims to create a work environment where everyone feels safe to express their views and concerns—and where everyone is confident that those concerns will be heard and taken seriously. Highlights included the following:
In 2016, PG&E’s annual compliance and ethics training, which we aim for all employees to complete annually, focused on speaking up. Specifically, the training was designed to build awareness of how to enhance an open communication environment; improve understanding of how to appropriately handle misconduct reports, as measured by the volume of calls to our Compliance and Ethics Helpline; and help employees understand how our attitudes and actions may inadvertently foster perceptions of retaliation. Video vignettes were based on real-world issues that supervisors and their teams might face.
In addition to the annual compliance and ethics training, management employees are required to complete Code of Conduct training and certify that they have read, understand and will comply with our Employee Code of Conduct.
|Compliance and Ethics Training||99.8%||99.9%||99.4%|
|Code of Conduct Training||99.8%||99.8%||99.8%|
The volume of Helpline calls received in 2016 was roughly 4.0 calls per 100 employees, falling within the normal range of 0.3 to 10.0 calls per 100 employees, according to a benchmark report prepared by NAVEX Global. The total call volume increased 5 percent over 2015, with a 3 percent increase in calls requesting guidance. This suggests that more employees are turning to the Helpline for advice before taking actions that might be in conflict with PG&E’s Code of Conduct, policies, procedures or the law.
To achieve PG&E’s commitment to establish a best-in-class compliance and ethics program, we intend to drive continuous improvement by: