Do the Right Thing vs. Minimum Compliance

Do the right thing.

As leaders within the pipeline industry, it’s not uncommon to participate in discussions of regulatory strategy.

There are a couple of approaches to regulatory strategy: the first is Minimum Compliance and the second is what I like to call Do the Right Thing.

I admit my preference is for the Do the Right Thing approach, but we'll cover reasonable rationales for both here.

1. Minimum Compliance

   Procedures and policies are designed to meet, not necessarily exceed, regulatory obligations while minimally impacting the budget.

• • With this approach, decision-makers begin by understanding the applicable regulations and then determine how to meet them.
  • The company operates under rules set by regulatory agencies, and company leaders are simply working to meet the expectations of these agencies as economically as possible.
  • Pipeline operators sometimes consider exceeding regulations unnecessary and potentially wasteful. They may believe that if regulations are inadequate, government agencies have the responsibility to update them to keep systems safe.

2. Do the Right Thing

   Procedures and policies are established to ensure system safety and alignment with company values first, then consider regulatory requirements and budgetary limitations.

• • The discussion starts by determining the right thing, which reduces the possibility that cost or regulatory considerations will produce a less-than-ideal outcome.
  • With this approach, pipeline operators, not government regulators, determine how they will run their company and meet regulations.
  • This approach incorporates best practices and lends itself to innovation and industry leadership. Doing the right thing means the pipeline operator will typically not be hit hard by new regulations, since they prepared in advance.

I was fortunate to have previously worked with a gas distribution executive who would begin procedural or regulatory discussions by asking, “What is the right thing to do here?” He would steer the conversation away from financial considerations, workforce issues, and regulations. We would talk about how the issue would impact customers, members of the public, and even our own families.

Though company leadership initiated this approach, it filtered down throughout the ranks. Even decisions not tied to regulations were handled in this way. Eventually, issues discussed in department meetings were started by encouraging all parties to focus on doing the right thing first. We would work through concerns related to budget, man-hours, etc., only after determining the right thing to do.

To summarize, both approaches will lead to satisfactory results during regulatory inspections; however, pipeline operators must be concerned with more than just inspections. Civil liability is always a concern. Public confidence in the operator and the public’s perception of the operator’s commitment to safety are legitimate concerns and involve more than minimum regulatory compliance.

When making any decision, be sure to always Do the Right Thing.