Utility Compliance Excellence

Utilities Compliance Practices and Culture

Introduction

The Cambridge Dictionary defines compliance as “the act of obeying a law or rule, especially one that controls a particular industry or type of work.”

A challenge with compliance is that the degree to which people naturally comply with something depends on many factors. Many drivers take liberties with their compliance with speed limits, but few drivers take liberties with red traffic lights, even though both have a regulatory foundation and potential consequences.

There are also differences in the level of compliance to something needed for it to be effective. For example, a person who follows advice to exercise 4 times a week 90% of the time may still be in good shape, but a hospital that only performs surgery on the correct limb 95% of the time will not be viewed as effective.

High-level compliance strategies are relatively easy to describe and endorsed by many practitioners, as evidenced by the bullets in the white paper “7 Keys to Achieving Compliance Excellence” (blue sidebar at left) which align with The Engine Room’s recommendations. However, achieving the level of compliance required is one of those things where the devil is in the details, particularly in how the various pieces of the compliance process link together.

This Engine Room discussion paper is intended to explore the ways modern Utilities approach compliance and some of the pitfalls Utilities may run into in their compliance journeys.

7 Keys To Achieving Compliance Excellence

Excerpts from A White Paper by Charles H. Paul, Nov 2016

The most simplistic solution to achieving compliance excellence is “to do the right things right!” But what does this really mean? I have distilled the “doing the right things right” solution into 7 separate individual keys or actions that will provide a solid foundation for the establishment of any compliance program.

1. Understand the regulations that pertain to your industry and your business throughout each level and function of your organization.

2. Define your critical processes relative to the regulatory path that has been chosen.

3. Develop sound regulatory documentation.

4. Harmonize your processes and procedures between plants.

5. Commit to and execute comprehensive technical training. Competence is the prerequisite to compliance.

6. Institute a sound and effective complaint and investigations handling process.

7. Manage performance up and down the line to the performance structure created. If it is not managed it will not be performed.

The intent is to demonstrate linkage between each level beginning with the regulatory requirements themselves through regulatory documentation, through the training process, ending ultimately with the management of individual human performance.

Regulations

Describing all the regulations a Canadian Utility must adhere to is beyond the scope of this discussion paper. In fact, there may be municipal, provincial, and federal regulations in addition to professional association’s technical standards on a wide range of topics that somebody within the Utility should be aware of and consider how best to comply with.

However, for this discussion paper, it is worth noting that there are different types of regulations, including:

• Regulations that are prescriptive on specific technical details.
• Regulations that describe what must be accomplished but are not prescriptive on how it must be done.
• Regulations that describe process requirements but are silent on outcomes (E.g., requirements to hold regular safety meetings).

Then, to further complicate the situation, there is the reality that some companies choose to operate to a higher standard than the regulatory minimum. In contrast, others must be dragged, kicking and screaming to meet the minimum.

The result for most Utilities is that they operate under various regulations and need to design their compliance processes to align with the nature of the regulations, their company’s structure and risk tolerance.

One of the most important things to appreciate is that simply having a regulation does not lead to compliance. For example, there are obscure laws on the books in every province that are not enforced, that few people know about. On the other hand, some new regulations, such as the use of cell phones in vehicles are implemented well are have a noticeable cultural effect in a relatively short time. The difference is in the implementation.

Essential Requirements for Critical Activities

While regulators naturally think about how to craft regulations, the challenge within corporations is to do all the required things to get all their hundreds (or thousands) of employees to act in ways that comply with regulations. Inevitably, that involves a lot of details, but the overarching requirements for success are more straightforward. At the Engine Room, we believe that the three essential requirements for crit