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Ethics Connect: The value of compliance

By GAN Integrity

Getting buy-in from the rest of the organization on the value of compliance is an age-old challenge. But what if, instead of convincing our people that compliance matters, we connected the dots to their individual success?

This is the approach Anders Hvashovd, VP and Chief Compliance Officer at Seadrill, a global drilling operator, has taken. Compliance has become an engaging conversation rather than a top-down mandate.

In our podcast episode, he shared with GAN Integrity’s Chief Marketing Officer Steve Muddiman how he’s developed genuine collaboration with other leaders in his organization. Explore this discussion and learn how Anders' approach enhances value creation across the business.

Steve Muddiman: Tell us a little about yourself, the organization and what you do at Seadrill ?

Anders Hvashovd: I am Norwegian but work out of Seadrill’s London offices. Seadrill is a global drilling operator so we have multinational enterprises and drilling is very agile; quick in, quick out, swift movement, and strategic decisions. This brings a particular flavor to the challenges we face.

I spent the first half of my career in commercial lawyer roles and the last ten in compliance. The legal role brings a useful business perspective and an instinct for the legal frameworks within which we operate. We have cross-functional expertise in my team which is very helpful.

Steve Muddiman: Could you describe your business and sector challenges?

Anders Hvashovd: This is my first venture into rigs. These can be very long-term or short-term. Tenders have to go in early as you want to keep the rigs in use. Sometimes this will be in countries with limited onshore facilities. Angola, for example, has a lot of onshore infrastructure, and in other places you might be working out of a hotel. You have to start moving quickly and have to understand the laws in countries where they might change quickly. This might require local partners, native ownership and other legal and regulatory considerations. You then need to think about sanctions. Once you’re in a country you need to think about how the visa process works which comes with its own challenges; whether you can use a foreign bank, ensure import of equipment and whether you find local supplies for example. At Seadrill, we are very proactive in finding parts quickly and navigating regulations, we have to be agile.

Steve Muddiman: Have recent sanctions on energy resources added pressure to respond quickly?

Anders Hvashovd: The Russia sanctions have impacted our supply chain, certainly. The sanctions on oil and gas are established so that’s not a new challenge but there are consequences for oil prices, which means there’s greater demand for rigs. Twelve months ago people were looking at descaling the rigs, now they are looking at increasing their use. This includes reactivation projects and some of these will only be possible with foreign suppliers. There’s now a strain on those suppliers as well as increased lead times.

Steve Muddiman: How do you create strong relationships with suppliers?

Anders Hvashovd: We are a customer who is seen as predictable, sustained in our compliance demands and communications on ESG considerations. We also support the supply chain and make sure they see Seadrill as a non-Cumbersome company to work for. Most companies assess things like bribery in a similar way but see ESG very differently. One of my pet peeves is integration of these processes. We aim for our compliance scope to be part of our supply chain processes so that they don’t need to allocate specific resources. Questions asked this year are questions you don’t have to ask next year. We also try to find suppliers which deliver on their compliance promises because this is a useful bellwether for other commitments.

Steve Muddiman: Can we talk about how the strategic viewpoint is created across departments?

Anders Hvashovd: We are very lucky. Seadrill is a collaborative environment to work in. Everyone is geared towards the common good. There are always things we can improve and this involves distinguishing between commercial and compliance. We have critical input between teams but for me it is natural that there is ownership between these departments. However there are very few areas which are owned entirely by one function. We need to sit down with the functions and discuss. I work with someone who is very forward leaning and dynamic where in my role I have to sit back and ensure we are pointing in one direction. Investigations, reports, and audits inform what our objectives need to be. This is combined with a collaborative approach at board level. There is a direct flow between operations and compliance which allows us to face these challenges and this is augmented by an IT department which drives us towards a greater good.

Steve Muddiman: Ethics and compliance aren’t central to lots of companies. How do you safeguard them?

Anders Hvashovd: We made the strategic decision that it would be a distinguishing characteristic of our company. When you can implement compliance in a way that has clear business consequences, not just process for process's sake, it is an asset to the company. When you have one big thing coming at you, which in our case was a business opportunity in Brazil, it focusses your efforts. What I don’t think is the solution to implementing ethics and compliance is looking at the potential fines and punishments. What really helps is when you look at the real-world scenarios experienced by the business and how you navigated them, rather than being focussed on worst case scenarios all the time.

Steve Muddiman: how do you recruit and retain the kind of talent you want and have?

Anders Hvashovd: As part of recruitment and ongoing HR processes there is a lot of focus on the right behaviors. That is not to say that one behavior is right or wrong, but that employees should be aware of their behaviors and that they match within the team in which they work. Transparency is one of those behaviors and one of those that Seadrill holds very highly.

ESG is an increasingly important factor and determinant in where employees want to work. The metrics have shown where employees want to go and which companies they want to work for, and it’s very clear this is a focus. It’s absolutely a focus for the organization. It’s as much about trying to rectify problems we see as it is about preventing them. Business happens in real time.

Steve Muddiman: How do you prepare for and handle unpredictability?

Anders Hvashovd: In my past line of work I’ve been exposed to investigations including early Russian sanctions. It’s a kind of crisis management …one which is more difficult for the company to control. Establishing processes and procedures around these things is challenging. It’s a bit like a prenup; you don’t hope for or expect search and seizures but it’s a possibility and it’s good to plan for it. It may never happen but it’s good to be prepared in case it does. We do have a search and seizure directive because we’ve been exposed to it and know how to handle it. It’s different to most crisis management and you can’t follow a book. For example, if the company is accused of a crime the immediate response might be to put out a statement saying you didn’t do it. If there’s an investigation six years later though and the company did commit an infraction you will have to go back and say that you did. This is a situation you want to avoid. You can’t approach these situations by numbers. An example is when Russian sanctions were introduced and as a relative junior at the time I had to prohibit work in Russia. This was unpopular but had to be done to avoid future complications.

Steve Muddiman: how do you see the role of compliance in a broader context as a social force?

Anders Hvashovd: The behavior of companies of Seadrill’s magnitude has consequences because clients, customers, and employees internationally will see that we act in a similar way. It affects how people think about gifts and hospitality for example, and in previous roles I’ve seen local operators start to adopt our evaluations. The approach of coming in and advertising your way of doing things isn’t the answer. It’s about demonstrating behaviors upwards and downwards. The more others see you putting those systems in place the more they realize it mitigates their own risk and the more they adopt them.

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