ETHICS & COMPLIANCE PROGRAM REVIEW: A LOOK AT THREE CORPORATE COMPLIANCE PROGRAMS

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1 ETHICS & COMPLIANCE PROGRAM REVIEW: A LOOK AT THREE CORPORATE COMPLIANCE PROGRAMS Panelists Amy T. Lilly Director Ethics & Compliance, CenterPoint Energy, Inc. Joya Williams Compliance Paralegal, Shell Oil Company Stella Raymaker Director, Ethics & EEO Compliance, Waste Management 2 Discussion Topics Company Overviews General Program Structure Reporting structure, Size of Compliance Department Areas of Responsibilities Compliance Areas, Investigations Metrics Data/Information provided to Board Summary 3 1

2 COMPANY OVERVIEWS 4 Who is CenterPoint Energy? CenterPoint Energy, Inc., is headquartered in Houston, Texas. Our electric transmission and delivery business delivers electricity in a 5,000 square mile area that includes Houston, the nation's fourth largest city. Our natural gas distribution business operates in six states: Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas. CenterPoint Energy Services (CES), our competitive natural gas sales and service business, serves approximately 25,000 customers across 26 states. 5 Shell at a Glance Who is Royal Dutch Shell? Royal Dutch Shell, the parent company of the Shell Group was formed in 1907 Our headquarters are in The Hague, the Netherlands Our purpose is to power progress together by providing more and cleaner energy solutions Our strategy seeks to build a world class investment case for Shell shareholders, while helping to meet global energy demand in a responsible and affordable way Safe and environmentally responsible operational performance underpins our strategy while striving for Goal Zero Shell is a credible and competitive global group of energy and petrochemical companies creating shared value for society Our operations are divided into four businesses: Upstream, Integrated Gas and New Energies, Downstream, and Projects & Technology 70+ countries we operate in Over 90,000 employees 6 2

3 Who is Waste Management? Leading provider of integrated environmental solutions Serves more than 21 million customers in the U.S. and Canada Strategic solutions toward green goals and zero waste Largest network of recycling facilities, transfer stations and landfills in the industry North America s largest residential recycler Managed more than 15 million tons of recyclable material in goal of managing 20 million tons of recyclable material Recycles enough paper materials to save 110 million trees each year Renewable energy provider Recovery of landfill gas to generate electricity By the end of 2014, we operated over 134 beneficial-use landfill gas projects with enough energy production to power nearly 500,000 homes 7 GENERAL PROGRAM STRUCTURE 8 Ethics & Compliance Vision & Strategy Vision: Engage as strategic partners with the business to promote compliance, minimize legal risk and foster a values driven culture. OPERATE Maintain a Compliant Culture SERVE Increase Compliance Accountability and Oversight GROW Integrate objectives and processes for better corporate alignment without increasing costs 9 3

4 Ethics and Compliance Program Staffing and Structure Staffing: Department established in 2005 CECO Reports to Legal Counsel; Dotted to Audit Committee Chair Staff of 3 Structure: Combines decentralized compliance responsibilities with centralized oversight Records & Information Management Data Privacy Operational Compliance PUC, FERC, TRE* 10 Reporting Structure Full Board of Directors Annual Presentation BOD Audit Committee Quarterly Reporting CECO Compensation and performance rating CECO meets quarterly with Top Business Leaders Ethics & Compliance Council Quarterly Reporting ERM & Audit Monthly Collaboration HR & Security Bi monthly Collaboration 11 Shell s Global Values Honesty Integrity Respect for people Shell s General Business Principles, Code of Conduct, and Code of Ethics help everyone act in line with these values, govern the way we work, and comply with relevant laws and regulations. 12 4

5 SECO STRUCTURE ROLES Chief Ethics & Compliance Officer 13 Shell Ethics & Compliance Office (SECO) Subject Matter Experts Part time networks Strategy & Programme Team BID/Internal Audit Business Ethics & Compliance Teams Anti Bribery & Region/country coordination Programme Upstream CorruptionInt l and Anti Development, Businesses Upstream & Upstream Money Laundering Americas Communications, Upstream Int l Integrated Gas Projects Antitrust & Technology Central Upstream Support Americas Projects & Downstream Trade Compliance Risk & Assurance Projects & Technology Technology Data Privacy Downstream Downstream Information Management Shell Legal Functional Ethics & Compliance Officers (part time) VP Finance Regulation & Compliance Trading & Supply Non Legal Programme owners (e.g. FIN, HR, IT) Shell Ethics and Compliance Office ( SECO ) US program began in the late 1999/first Global CCO named in 2005 Setting the standards and expectations set out by the Code of Conduct Provides compliance advice Independently monitors and reports the state of compliance in the Group Communicates compliance messages both at Group level and through the Businesses and Functions Supports and advises the Businesses and Functions in the determination of key legal and ethical compliance risks and of priorities for the Group Ethics and Compliance Programme in terms of training and control improvements 14 STRUCTURE OF SECO The programme is directed by Shell s Chief Ethics and Compliance Officer who is supported by: the Shell Ethics and Compliance Office, which is responsible for the design, support and monitoring of the programme; legal counsel who monitor external legal and regulatory developments and provides legal advice; and Shell s businesses, which implement the necessary policies, standards and procedures into daily work, supported by Ethics and Compliance representatives who also monitor the programme. 15 5

6 Compliance at a Country Level Ethics and Compliance is a crucial element of Shell s global operation. It is essential that principles and practices are distributed and implemented globally and achieved through activity at the country level. The Country Chair or Country Chair Representative supports and oversees that country level Ethics and Compliance activities are properly executed across each Business and Function and meet applicable local legal and regulatory requirements Functions determine the key legal and ethical compliance risks and priorities for legal and ethical matters that fall within their functional mandate 16 Waste Management Compliance Strategy Business competitive advantage Operations focused Internal culture driven 17 Waste Management Compliance Structure Chief Compliance Officer Ethics & Compliance Environmental Compliance & Environmental Audit Virtual infrastructure of Compliance Functions* Ethics Procurement Safety IT Security Environment Corporate Security HR Internal Audit *Each functional department virtually report into Chief Compliance Officer on Compliance matters except for Ethics 18 6

7 Reporting Structure Chief Legal Officer Audit Committee of the Board Chief Compliance Officer Director of Ethics & EEO Compliance Compliance Review Team 19 AREAS of RESPONSIBILITY 20 Advanced Awareness Annual E&C Code of Conduct 100% completion Employee Choice View 6 videos or take annual E&C Code training Ethics In Action Video Contest Annual Roundtable Discussions Annual COI Questionnaire New Hire Orientation New Leadership training CEO Leadership Meetings Living Our Values Monthly Newsletter Conversations with Carol Quarterly Newsletter 21 7

8 Ethics In Action Video Contest Executive Teaser Video to encourage employee participation 66% of employees are over 40 years 33% have 25+ years of service 35% belong to a union 87% of CNP employees are below supervisor level 22 Ethics In Action Video Contest 23 Compliance Essentials STRATEGIC INTENT: Deliver the best business outcomes for Shell by: Providing leading expertise Protecting Shell s reputation and business and, where necessary, intervening identifying risks Contributing to and enhancing business decisions and continuity Shaping industry legal regimes and practices at a competitive cost Complying with laws and regulations AWARENESS: Legal s four functional priorities business partnering, information management, people development and continuous improvement reflect essential organizational behaviors Onboarding new hires Code of Conduct training Training (virtual and F2F) Townhalls 23 8

9 Compliance Responsibilities Comply with laws and regulations Ensure proper management of all compliance programs Collective assessment of compliance programs effectiveness Identify and prioritize potential risks Recommend and monitor actions to address identified risks Culture Awareness & Communications Harness the support of Leadership 24 Ethics & Compliance Programs Comply with laws and regulations Integrity Helpline & Conflict of Interest Disclosure On average usage of 4% - Approximately 1600 cases annually Approximately 12,000 employees required to complete a COI survey annually Monitoring trends on the Helpline and COI disclosure data, vs investigation trend Recommend, develop and implement policies and procedures as needed Culture Annual Code of Conduct training is a requirement Monthly Ethics column in the newsletter Proactive participation in regional leadership meetings 24 DATA and METRICS Reported to the Board 25 9

10 Data and Metrics Ethics and Compliance Headlines Ethics and Compliance Notable cases Operational Compliance Issues Helpline Metrics with Benchmarking Information Training, COI Survey, Roundtable Discussions E&C Initiatives Ethics in Action Video Contest, Outside speakers Risk and Audit Assessments 26 Executive Committee Board of Directors Audit Committee Leadership Team ABC/AML Committee Risk Management Business Integrity Division Corporate Security Human Resources Reporting Teams 27 Board Reporting Operational issues ABC/AML Anti trust Data Privacy Trade Controls Risk and audit reviews/assessments Training stats Helpline metrics Hot topics/external cases 28 10

11 Program Effectiveness Measurements Training Completion rates Helpline Allegations Outcome Call volume Disclosures Investigations Benchmark Risk Assessments Coordinate with Operations & Shared Services Training Communications Process Updates 29 SUMMARY 30 Summary of Three Corporate Compliance Programs Headquarters CenterPoint Energy Houston, TX Shell The Hague, Netherlands Waste Management Houston, TX 7,500 (all domestic) 90,000 (global) 42,000 (mainly U.S. Total Employees & Canada) E&C Dept Staff 3 Not disclosed 3 E&C Reports to # Helpline Calls in 2016 How often present to Board/Audit Committee? 31 Legal & Audit Committee Chair Legal & Audit Committee Chair Legal & Audit Committee Chair (in 2015) per year 1 Full Board Quarterly Each quarter with Audit Committee 11

12 Amy Lilly - CenterPoint Energy, Inc. Amy.lilly@centerpointenergy.com Questions? Joya Williams - Shell Oil Joya.Williams@shell.com Stella Raymaker - Waste Management yraymake@wm.com Ask us about GHBER!