Ethics and Compliance
As an organization, we are guided by high standards of ethics and compliance. Our board of directors abides by a set of Principles of Corporate Governance while management and employees are guided by our Principles of Business Conduct. We hold the board, management and employees to these principles and expect nothing less than the highest level of ethical behavior. We also expect employees to speak up when they see something that falls short of those expectations. If employees are unwilling to report an ethics or compliance violation because of a fear of retaliation, our corporate culture, our reputation and the financial health of the company are at risk.
Therefore, we maintain a confidential 24/7 hotline that allows employees to report concerns anonymously or to seek guidance on ethical, safety or compliance issues. We encourage our employees to feel free to share information or concerns. We provide annual, mandatory training to all employees on the Principles of Business Conduct, specifically detailing how to report concerns and our anti-retaliation policy. All of these efforts are grounded in the belief that the identification and resolution of concerns are critical to sustaining a strong and healthy company and culture.
In 2014, AEP’s Office of Ethics & Compliance completed a company-wide ethical risk assessment and the results were encouraging. The purpose of the assessment was to ensure that proper attention and resources are focused on areas of the company where ethical risk has the potential to be prevalent, or where exposure to ethics-related violations of policy or law may exist. The risk assessment also serves as a benchmark to track improvement for AEP’s ethical culture. The last assessment was conducted in 2011.
The assessment, conducted by Ernst & Young LLP, surveyed 5,000 randomly selected employees and was combined with one-on-one interviews with more than 30 AEP leaders. The results concluded that AEP has a strong culture of compliance; employees have a good sense of where to go for help and a good sense of trust in the leadership of the company – especially trust in their individual supervisors. Top areas of risk identified by the assessment included NERC, cybersecurity, FERC, the U.S. Commodity Futures Trading Commission and safety performance. None of these were a surprise and are areas where AEP has already dedicated significant resources and invested heavily in oversight of these high-risk areas.
We will use the findings to revise our Principles of Business Conduct training and will continue to seek other ways to use it to add value for employees and help improve the culture within AEP.