Salvador Dahan on the Journey of Petrobras [Podcast]

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Post By: Adam Turteltaub

Operation Lava Jato (Carwash) had a profound effect on business in Brazil, with countless companies caught up in one way or another in the corruption scandal.

State oil company Petrobras was no exception, but, as is the case with so many compliance incidents, the question quickly moved from what happened to what are you going to do about it.

At the 2022 SCCE European Compliance & Ethics Institute, Salvador Dahan (LinkedIn), Executive Director, Chief Governance & Compliance at Petrobras will be addressing the company’s ethical journey. He shares some of the story in this podcast.

Petrobras entered into a Non-Prosecution Agreement (NPA) that included a provision that the company had to agree to collaborate with all the investigations underway, not just with the US. The company also agreed to $850 million in fines to authorities in the US and Brazil. And, of course, it was required to improve its compliance program and internal controls.

How did the company go about the transformation? Leadership provided a strong tone at the top. The head of compliance was placed at the Executive Director level and made a part of any major decision in the company. In addition, there is a direct line of report to the board of directors. There is even a formal hiring and termination process for the compliance team to protect the program against retaliation.

The company also embraced a three lines of defense model, with compliance playing an integral role.

Petrobras is continuing along its journey, Salvador reports. They are working to restore employee confidence and helping the workforce see the company is made up of individuals with strong ethical values. Supporting this initiative has been a great deal of communication designed to show that these are real actions, not just words. Every meeting in the company now starts with a five-minute discussion about ethics, integrity and transparency. They have also established a force of more than 200 ambassadors, known as Integrity Agents, to build bridges between the compliance team and the business unit.

What does he recommend for other organizations going through a crisis? Several things:

  • Quickly recognize the situation, accept what is happening and begin collaborating
  • Talk to employees with transparency, outlining the next steps, long-term commitments, as well as do’s and don’ts.
  • Provide a clear sense of direction. It mitigates noise and a lack of confidence.
  • Find out your vulnerabilities, and then act as soon as possible.
  • Get an independent opinion. An outside voice can be very helpful.

Listen in for more lessons, including how to continue to strengthen your organization, even after the NPA comes to an end.