Peter C. Anderson, Chief Ethics & Compliance Officer for Carnival Corporation in Miami, Florida, USA
AT: Do you have an overarching philosophy or mindset toward compliance?
PA: I have always believed that compliance is about self-governance and transparency. Rather than react to outside forces such as litigation or criminal prosecution, smart companies take a more proactive approach by fully understanding and managing their legal, regulatory, and reputation risks. Thus, a company’s goal should be to strengthen the four pillars of effective compliance: prevention, detection, response, and correction. To help focus on both compliance and ethics, my three-part creed is that we have to “do the right thing … in the right ways … for the right reasons.”
AT: While most every big business these days has a compliance program, especially those that operate globally like yours, some may still be surprised to learn that Carnival Corporation has a compliance team. Can you start by giving an overview of some of the key risks that the cruise industry faces?
PA: Sure, Adam. The compliance risks in our industry fall into two general categories. The first involves the more technical compliance risks that are somewhat unique to our industry and fall under what we call “HESS”: Health, Environmental, Safety, and Security. The other category includes the more general compliance risks that are commonly faced by all corporations, such as the Foreign Corrupt Practices Act, antitrust, data privacy, fraud, etc.
As we redesigned our new ethics and compliance program, my goal was to make sure it was risk based. To prioritize these top risks, and to promote better accountability, we structured our department along the same lines by naming leaders in the substantive areas of HESS and general compliance. The remaining leaders on our team are more process related, with responsibilities in overseeing investigations, compliance risks, compliance training, and compliance communications.
AT: Cruising is a relatively young industry. Does that add to the challenge?
PA: Yes. That is one part of the puzzle since the rules are numerous, complex, and continue to evolve. As we operate our large fleet of ships—which are more like floating cities—all over the globe, a variety of international, national, and local laws come into play. And these rules constantly change depending upon our location on any given day. In addition, unlike land-based manufacturing facilities, we have to operate and maintain our equipment while at sea, with a crew that is also constantly rotating and changing. Based upon my 20 years in the regulatory compliance arena, this is the most complicated and challenging industry I have ever seen. But we all wish to live in interesting times, right?
AT: Carnival grew by acquisition. How have you structured the compliance program to work with your many brands?
PA: Yes. Carnival Corporation is the largest cruise company in the industry, with 107 ships and nine different brands, all housed under All Brands Group (ABG). Each company has a rich history, tradition, and unique personality. To promote an effective alliance, we also designed our ethics and compliance program with leaders that are based in our headquarters, as well as other ethics and compliance leaders based around the world within our brands. While ABG is ultimately accountable for strengthening and overseeing an effective program, the brands are responsible for implementing the goals that we jointly develop.