Acting with integrity is a core value and expectation, at all levels of our company.
Our company’s rigorous corporate ethics program promotes and enforces compliance with all laws, regulations and company policies, from business practices to workplace behaviors of individual emplopyees. Ethics and corporate integrity are cornerstones of how we conduct our business.
Regulators, elected officials, community leaders, customers, competitors, investors, the news media and advocacy groups all pay close attention to what we do and how we do it – and we have to strive to maintain their trust and confidence. It is imperative that we comply with all regulations, laws and company policies, and this is the expectation for every employee.
Our ethics program is managed by our Audit Services Department. Our Code of Ethics identifies principles and standards of conduct that all employees, contractors and members of the Progress Energy board of directors are expected to follow. The Code of Ethics defines the behaviors essential to our success and is crucial to establishing and maintaining an ethical culture at our company.
The Senior Management Committee sets the company’s ethics policies, and all employees attest annually that they understand and agree to comply with Progress Energy’s Code of Ethics. The ethics program is governed at the corporate level by the Corporate Ethics Committee, composed of executives representing all Progress Energy business units. This committee is chaired by our chief compliance officer, who is responsible, along with other company executives, for ensuring compliance with the Code of Ethics, including legal and regulatory requirements relevant to all facets of our business. We communicate information about our ethics program and Code of Ethics through facilitated and online training sessions, companywide publications and electronic media, leadership development courses and a dedicated ethics website on our intranet.
We offer employees a 24-hour telephone line administered by an independent company. The Ethics Line provides a confidential and anonymous way for employees to submit ethics-related questions or report suspected Code of Ethics violations without fear of reprisal. Individuals may also choose to submit their concerns in writing to a confidential post office box. Employees are also encouraged to raise ethics-related issues to their supervisor, a Human Resources representative or directly to a member of the ethics program staff. Allegations of Code of Ethics violations are investigated, and, if substantiated, management and the Human Resources Department jointly determine the appropriate disciplinary action, enhanced controls or other appropriate measures. Discipline can range from counseling to termination.
In certain serious allegations, the Audit and Corporate Performance Committee of the Progress Energy board of directors conducts a special review. Allegations referred to this board committee could include complaints regarding senior management or complaints of any unethical or criminal activity regarding fraud, accounting and internal controls or auditing matters that relate to the fair and accurate presentation of information in our financial statements.
In 2011, the company continued to build on the success of the inaugural Ethics in Action campaign launched in 2010. The campaign included monthly articles on ethics topics distributed to employees via the company’s intranet, featuring a video message from the company’s chief compliance officer. Managers received a toolkit designed to facilitate workgroup discussion around topical scenarios distributed bi-monthly. Archived versions of Ethics in Action features are made available on the ethics program intranet site, along with a user-friendly, interactive version of the Code of Ethics. During a 2010 external evaluation conducted by Ethisphere, the Ethics in Action process was identified as a best practice.
In 2011, we received 183 allegations of violations of the Code of Ethics. This is 69 fewer allegations than were reported in 2010. The ethics program closed 170 cases, with a 35 percent substantiation rate. The most frequent substantiated allegations involved harassment and time abuse.