Form vs. Function: Optimizing the Design of Your EHS & Sustainability Organization

Transcription

1 Form vs. Function: Optimizing the Design of Your EHS & Sustainability Organization Taylor Gelsinger, Research Analyst at NAEM Michael Miller, Vice President of EHS at Dean Foods 1

2 Overview of Today s Discussion 9:00-9:10: Welcome and Introductions 9:10-9:25: Presentation of Highlights from NAEM s Staffing, Structure and Budgets report Taylor Gelsinger, NAEM 9:25-9:45: Structuring EHS & Sustainability to Deliver Strategic Value in a Dynamic Business Michael Miller, Dean Foods 9:45-10:20: Small Group Discussions 10:20-10:30: Synthesis and Wrap-Up All rights reserved

3 Welcome and Introductions Why did you want to join this discussion today? What are some of the questions you d like to address today? All rights reserved

4 Discussion of Research Highlights 4

5 About this Report Designed to help companies decide what size and composition of EHS&S function is right for them Developed within input from a committee of peers Responses from 193 companies Fielded in April-May 2016 Distribution partners:

6 Research Participants Included 6

7 Respondent Demographics Annual Revenue Half fell between $1 10 Billion USD Annually Industry Pharmaceutical Manufacturing, Utilities, Industrial Machinery Manufacturing, Multi-Industry, Diversified, Consumer Product, Chemical Company classification 68% Publicly traded Level of EHS Risk 67% Medium Degree of EHS Risk Geography Primarily US, with strong presence in the European Union, Canada and Asia Pacific 7

8 Combined EHS&S Functions are Now Common at the Corporate Level Types of EHS and Sustainability Departments 8

9 Sustainability Has Greater Visibility at Leadership Levels of a Company Top Reporting Structures by Function 9

10 Risk Drives Staffing Staffing Benchmark by Level of Risk 10

11 The EHS Function Collaborates with Others in Every Activity Level Top 20 EHS Activities by Level of Involvement 11

12 Changes in Budgets Changes in EHS Budgets Changes in Sustainability Budgets All rights reserved

13 Case Study of an EHS&S Reorganization 13

14 DEAN FOODS SNAPSHOT Largest U.S. processor and distributor of fluid milk with 50+ trusted regional brands 3 rd in Ice Cream and Frozen Dairy Deserts / 3 rd in Orange Juice 70 Manufacturing facilities 18,000 total employees; HQ: Dallas Volume ~ 3B gallons annually Revenues: $9B+ Best-in-class nationwide refrigerated DSD distribution system NYSE: DF $1.9B 2 Mkt Cap 14

15 THE REACH OF DEAN FOODS More than 2/3 of U.S. households purchase a Dean Foods branded product annually 6,500 refrigerated DSD routes Over 100,000 points of distribution Large Format Retail Small Format Retail Foodservice 15

16 Purpose, Vision, Operational Imperatives, Guiding Principles, and Strategic Plan COMPANY VISION Be the most admired and trusted provider of wholesome, great-tasting dairy products at every occasion. Our purpose.. OPERATIONAL IMPERATIVES Never compromise on people, safety, quality or customer service. Deliver our financial commitments by focusing on volume, price and cost control. Create measurable objectives with clear accountability GUIDING PRINCIPLES We act with INTEGRITY in all that we do We treat everyone with TRUST, DIGNITY and RESPECT We act in the BEST INTEREST of Dean Foods We are committed to PEOPLE, SAFETY, QUALITY and SERVICE We encourage DIVERSITY of THOUGHT and OPEN COMMUNICATIONS We are PERSONALLY ACCOUNTABLE for keeping our COMMITMENTS We must all understand our purpose, share our vision, adhere to our Operational Imperatives, truly live the Guiding Principles, and ensure our people are doing the same! We must do all we can to assure our strategy from our recent Strategic Plan is executed while effectively operating our day to day business.

17 Dean Foods Company Case for Centralization Ability to focus resources on areas of need Resources not dedicated to one plant Education and salary of level of EHS professionals higher then Supply Chain leaders in the field Retention loss rate was exceeding 40% over 2 years for field talent

18 Dean Foods Company Challenge EHS resources in corporate, regional, and location roles Role clarity issues Talent not properly managed resources not dedicated to one site or plant Salaries were not competitive Retention loss rate was exceeding 40% over 2 years for field talent

19 OUR EHS RESPONSIBILITY Environmental Health & Safety The EHS Team at Dean Foods works to ensure the safety of our workers, the protection of the environment, and cost effectively manages our operational risks while ensuring compliance with local, state and federal regulations. Policy & Governance Process & Hazard Controls Due Diligence / Site Assessment & Remediation Management Systems & Metrics Training & Field Support Culture & Performance OSHA & DOT EPA & DHS CSAT Local, County, State Regs Internal Policies & Standards Lobbying & Regulatory Engagement Industry Standards Ammonia Safety (PSM) & Env (RMP) Homeland Security CSAT ISN Contractor Safety FM Global Property Protection Crisis Management / Business Continuity Phase 1 & 2 Assessments Fuel Tank management Reserve Management Due Diligence Support Remediation & Spill Response Real Estate / Network Ops Support EHS Scorecards Injury Reports (TRIR, DART) DOT CMS Basic Scores Leading Indicators Customer Requirements Self Assessments Compliance Audits Management System Peer Audits Training & Coaching Talent Development EHS Ethics & Leadership Training Safety Town Halls 19 Behavior Based Safety (O&Cs) DriveCam Event Telematics Body Mechanic & Ergonomics (SIM) Human Error Science (HFAAC)

20 Corporate EHS Team & EHSLT Terri Moore VP, HR - Corporate Janet Stephen Sr. HRBP East Rockies Division Michael Miller VP, Environmental Health & Safety Tammy Garcia Executive Assistant Mohan Cherukuri Sr Business Relationship Mgr - IT Greg Packer VP Legal & Chief Counsel Supporting EHS Chad Jenkins Director Risk Management Kyle Myers Regional Director EHS West Dave Herbst Sr. Manager EHS Logistics West Aimee Taylor Regional Director EHS South Dale Tidwell Sr. Manager EHS Logistics South Mary Russell Sr EHS Manager & Corporate IH (50% field / 50% Corp) Larry Cuomo Regional Director EHS North Ryan Bodekor Sr. Manager EHS Logistics North Maureen Peterson Sr. Manager EHS Reporting, Tools & Analytics Sr EHS Manager and EHS Manager II report to EHS Directors Divisional EHS Logistics Managers report to Sr. EHS Logistics Managers Bill Lape Director EHS, Process Safety & Hazard Mitigation Norm Stone Director Env Eng/Compliance & PSM Brad Kennicott Manager Process Safety Engineering Nancy Neilsson Director EHS - Programs & Audit Lynn Petersen Sr. Manager Environmental, (Wastewater, RMP & Audit) Bill Park Sr. Manager Environmental (Remediation, Site Assessment, DHS & Audit) *Green is DF EHS Leadership Team Provides day-to-day strategic & tactical support around compliance and our goals within each region Provides subject matter expertise around DOT compliance, PSM/RMP, Homeland Security, driver training, storm water, permitting, refrigeration, auditing, and network optimization

21 South Region EHS - Operations Aimee Taylor EHS Director South Region Mary Russell Sr. EHS Manager 1 Mayfield locations Braselton GA / South Region / IH / Training Jennifer Schmidt Sr. EHS Manager 1 Florida Division Orlando & Orange City Chris Bressi Sr. EHS Manager 1 Red River & New Orleans Dallas McKinney Matt Brooks Sr. EHS Manager 1 Richmond Gordon Harris Sr. EHS Manager 1 Houston N. Doug Hampton Sr. EHS Manager 1 Birmingham Milk Birmingham Ice Cream Brad Bradford EHS Manager 2 Athens, TN Jeasy Justiniano EHS Manager 1 Miami Paul Jones EHS Manager 1 Tulsa Oswaldo Reyes EHS Manager 1 New Orleans Chris Lynch EHS Manager 2 Winston Salem High Point Joe Hogan EHS Manager 2 Spartanburg Matt Zakoski EHS Manager 2 San Antonio Amber Epperson EHS Manager 2 Nashville -Purity Nashville -Country Delite Nashville Butter Plant

22 South Region - EHS Logistics Aimee Taylor EHS Director South Region Dale Tidwell Regional EHS Logistics Manager Jim Wightman Division EHS Manager Red River Division Bill Hertzog Division EHS Manager South Texas Division Larry Mitchell Division EHS Manager Mid South & Gulf Coast Divisions Arnold Hickman Division EHS Manager Mid South Division Sandra Doucette Division EHS Manager Atlantic South Division Rick Ramos Division EHS Manager Florida Division Pat Terrell DOT Coordinator

23 Opportunity Reward Voluntary retention has been reduced by 80% EHS function approaching issues as a team Service level to field has improved EHS better respected as a strategic function Ability to utilize resources cross location much easier Talent development and IDP planning more effective

24 Small Group Discussions All rights reserved

25 Questions for Small Group Discussions How would you characterize your company s degree of EHS risk relative to companies operating in other industry sectors? High Medium Low Can you please describe the structure of your ESH function? How are you set up? Centralized Decentralized Matrixed How does your company manage its sustainability programs? Are they embedded FTE s within the ESH function? Is a strategy executed and led by ESH? Is it managed by a crossfunctional team? 25

26 Questions for Small Group Discussions To who does your EHS function report? To whom does your sustainability function report? Is there a difference? Why? How does your EHS function or EHS&S function collaborate across siloes? What challenges does that create for the division of roles? What changes are you expecting in your EHS budgets vs. prior year? All rights reserved

27 Synthesis and Wrap-Up 27

28 Wrap-up Please tell us What are some of the key factors your group identified as correlating to EHS&S staffing and structure? How did your experiences compare to what NAEM found in its research? What other questions do you have about how companies are structured that NAEM could answer for you? 28

29 List of Figures Demographics Figure 1: Function on Behalf of Which Respondents Answered the Survey Figure 2: Annual Revenue Figure 3: Total Number of Employees Figure 4: Geographic Presence of Operations Figure 5: Industry Sector Figure 6: Company Type Figure 7: Company Classification Figure 8: EHS Risk Profile Figure 9: EHS Risk Profile by Industry Structure Figure 10: Types of EHS and Sustainability Departments Figure 11: Variations in Structure Figure 12: To Whom EHS Reports Figure 13: Top Reporting Structures for EHS by Function Figure 14: Top Reporting Structures for EHS by Annual Revenue Figure 15: Title of Senior-most EHS Leader Figure 16: Levels between EHS Leader and CEO Figure 17: Have an EHS Steering Committee Figure 18: Centralization of the EHS Function Figure 19: Number of Divisions Figure 20: Function Organized the Same Way Across All Business Units Figure 21: Why Divisions are Organized Differently Figure 22: Presence of a Dedicated EHS Leader Figure 23: Presence of a Dedicated EHS Leader by EHS Risk Profile Figure 24: Presence of a Dedicated EHS Leader by Annual Revenue Figure 25: To Whom Sustainability Reports Figure 26: Title of Senior-most Sustainability Leader Figure 27: Levels between Sustainability Leader and CEO Figure 28: Have a Sustainability Steering Committee Figure 29 : Centralization of the Sustainability Function Budgets Figure 30: 2016 EHS Budgets Figure 31: EHS Budget by Annual Revenue Figure 32: EHS Budget by EHS Risk Profile Figure 33: EHS Budget Allocation Figure 34: EHS Budget by Industry Figure 35: EHS Budget by Company Type Figure 36: Changes in EHS Budgets Figure 37: 2016 Sustainability Budget Figure 38: Sustainability Budget Allocation Figure 39: Changes in Sustainability Budgets Figure 40: Job Titles Figure 41: Respondent Level Figure 42: Average Respondent Salary and Total Compensation Figure 43: Average Salary by Industry All rights reserved

30 List of Figures Staffing Figure 44: EHS Staff by Annual Revenue Figure 45: EHS Staff by Total Number of Employees Figure 46: EHS Staff by Company Type Figure 47: EHS Staff by EHS Risk Profile Figure 48: EHS Staff by Industry Figure 49: Average EHS Staff by Organizational Level and Position Type Figure 50: Average EHS Staff by Annual Revenue and Position Type Figure 51: Average EHS Staff by EHS Risk Profile and Organizational Level Responsibilities Figure 52: Full List of EHS Activities Figure 53: Top 20 EHS Activities by Level of Involvement Figure 54: Top Activities EHS Leads Figure 55: Top Activities for EHS Collaboration Figure 56: Top Activities for EHS Participation Figure 57: Top Activities Not Applicable to the EHS Function Figure 58: EHS Involvement in Prevention, Control & Disposal Activities Figure 59: EHS Involvement in Health & Safety Activities Figure 60: EHS Involvement in Compliance Activities Figure 61: EHS Involvement in Tracking & Monitoring Activities Figure 62: EHS Involvement in Energy Management Activities Figure 63: EHS Involvement in Product Sustainability Activities Figure 64: EHS Involvement in Strategy Activities Figure 65: EHS Involvement in Reporting & Communications Activities Figure 66: EHS Involvement in Engagement Activities Figure 67: EHS Involvement in Fleet Management & Transportation Activities Figure 68: EHS Involvement in Other Activities Figure 69: Full List of Sustainability Activities Figure 70: Top Activities where Sustainability Leads Figure 71: Top Activities Where Sustainability Collaborates Figure 72: Top Activities Where Sustainability Participates Figure 73: Top Activities Not Applicable to the Sustainability Function All rights reserved

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33 Learn More on this Topic How EHS and Sustainability functions are designed, responsibilities of the function and professionals and the competencies that are necessary to succeed in the profession. NAEM s Research on the Management of the EHS & Sustainability Function