Understanding the Culture of Compliance

Interview with Andrew Gallo, Director of Reliability Compliance at Austin Energy

With the range of regulatory and standard requirements electric utilities are faced with today, there is a real need to ensure that compliance and regulatory professionals have the right organizational compliance programs in place to avoid penalties without bogging down business operations.  Organizations must ensure they have the most up-to-date processes to identify, manage, report and monitor requirements.

Andrew Gallo answered a series of questions written by marcus evans before the forthcoming  4th Annual Managing Regulatory Compliance for Electric Utilities Conference, April 25-27, 2012 in Atlanta, GA. All responses represent the view of Mr. Gallo and not necessarily those of Austin Energy.

How would you define a "culture of compliance?"

AG: To me, a “culture of compliance” implies that compliance has become part of the organization’s DNA. People no longer segregate their “real work” from compliance-related activities. In other words, it’s important to get people from “I don’t have time to do that compliance stuff…..I have to do my ‘real’ job” to understanding that compliance activities are part of their “real” job.

Making compliance a priority for the organization must permeate from the top of the organization to the bottom. Perhaps most importantly, though, you must obtain buy-in from the “middle” of the organization. If middle management does not embrace compliance, you’re doomed.

What efforts have you made to implement this type of culture into your organization's compliance operations?

AG: I began by drafting an enterprise-wide Internal Compliance Program. I reviewed the document with my company’s executives to ensure they agreed with all the concepts. In that document, we established a “Compliance Oversight Committee” (consisting of the executives) and a “Compliance Team” (consisting of – for the most part – Director-level employees).  We also established working groups and task forces to address various aspects of compliance (Critical Infrastructure Protection, generation, transmission, etc.).

In the Compliance Program, we also outlined roles and responsibilities for any employees with compliance-related job duties. We then rolled out the Compliance Program to all employees and provided training to people with compliance-related goals.

What have been some of your great challenges when promoting this outlook throughout the company?

AG: The greatest challenge is the general, institutional resistance to change. People have done their jobs in a certain way for many years and we are changing things on them. It is – for the most part -- human nature to resist change.  Additionally, people are already busy. They see compliance as “additional” work. So, one of our challenges is succeeding in getting them to understand that compliance must be an embedded part of their work.

Another challenge, frankly, is a resistance to compliance because it increases paperwork. Many compliance-related activities center on documentation. That means people have to sign-off on activities and be responsible for having their work product “audited.” This often makes people uneasy.

Andrew Gallo is the Director of Reliability Compliance for Austin Energy in Austin, Texas. He led Austin Energy through an on-site audit of its TO, TOP, TP, LSE, and DP functions. He previously served as the Chief Compliance Officer for Seattle City Light (SCL) and led SCL through its first on-site NERC reliability standards audit.

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