Compliance: Integrity Hotline Lets Stakeholders Share Concerns

By Debra D'Agostino  |  Posted 06-28-2006

As one of the largest publicly traded energy companies in North America, Kinder Morgan Inc. knows a thing or two about regulatory compliance. For starters, the company operates roughly 40,000 miles of natural gas and petroleum transportation pipelines, and serves 1.1 million natural gas distribution customers. It employs roughly 9,000 people in the U.S. and Canada, and boasts two listings on the New York Stock Exchange—one for KMI, the other for its sister company, Kinder Morgan Energy Partners. Together, the two firms have an enterprise value of more than $35 billion.

So when it comes to the Sarbanes-Oxley Act—particularly its whistleblower protection rule requiring that all companies must provide a method for anonymously reporting wrongdoing—the company doesn't kid around. "We want to make sure that everyone, whether you're an employee, a customer, a vendor or a shareholder, has an avenue to express an ethics concern," says Garner Dotson, KMI's vice president of internal audit.

So KMI partnered with EthicsPoint, a Portland, Ore.-based compliance vendor, to put together an "integrity hotline" as well as a Web-based tool that lets stakeholders submit their concerns anonymously. "Anyone with a query can go online and post a question or a comment, and then check back in later to see if there has been any feedback to their query. And it's completely anonymous," Dotson says. The system also includes an anonymous chat feature so employees can talk to company executives in real time without having to reveal their identities. "I have no clue who they are, but I can ask questions and they can respond freely," Dotson says.

Of course, since anyone with an Internet connection can submit a query, the company does receive bogus claims from time to time. But Dotson says it's usually easy to catch complaints coming out of left field. "One time I got a complaint about an accounting issue in the Anchorage, Alaska, office," he says. "Problem was, we don't have an office in Anchorage. The person submitted their complaint to us by mistake."

Though he can't share how often stakeholders submit claims to the EthicsPoint system, Dotson does say it's an effective means to solve internal issues. "Our company is no different than any company that employs 9,000 people," he says. "There are intrapersonal issues that come up, and sometimes they are misunderstandings. But we need a vehicle to understand those concerns and make sure we take the proper course of action." And it's not just lip service: New employees are made aware of the EthicsPoint system during orientation and given wallet cards with the company's contact information. "We also have EthicsPoint posters at all our locations," Dotson says.

While the service may be a regulatory requirement, Dotson says the partnership with EthicsPoint goes beyond SOX. "We want to hear about anything that our stakeholders find troubling," Dotson says. "It could be of an ethics nature, harassment, environmental, anything. We do it because we care."