Corporate Social Responsibility Essay

Disclaimer: This paper has been submitted by a student. This is not a sample of the work written by professional academic writers.

Any opinions, findings, conclusions or recommendations expressed in this work are those of the authors and do not necessarily reflect the views of StudySaurus.

Topic: Kinder Morgan Corporate Social Responsibility

The rapid development of the oil and gas industries has boosted the supporting industries, including the oil and gas pipelines the production and distribution. And although the competition is tough, the businesses have their share and continue to fight their way to prosperity on the market.

Among them is the Texas-based Kinder Morgan Energy Partners, L.P, which owns and manages storage assets and energy transportation in the United States. The company is stated to operate through four major segments: Products Pipelines, Terminals, CO2, and Natural Gas Pipelines. The Trans Mountain Pipeline is the newest business segment recently added to the company’s portfolio. It is also one of America’s largest publicly traded pipeline limited partnerships with an enterprise value of approximately $20 billion, and the company is constantly expanding its infrastructure investing billions into new markets and potentially profitable projects. According to the corporate site, “Kinder Morgan is one of Fortune magazine’s Most Admired Companies. Last year, Kinder Morgan ranked #1 in the «Pipeline Category.» Also, Kinder Morgan ranked #1 in the «Use of Corporate Assets» and #2 in the «Quality of Management» categories among all industries in Fortune’s list.

The company’s major direct competitors are TEPPCO Partners LP (TPP) and the privately held Koch Industries, Inc. and TransMontaigne Inc.

Generally, analysts consider the industry to be very strong, will all the major participants having positive performance trends and financial results, and Kinder Morgan has the potential of making a stable profit in the industry in the nearest future.

Let us now take a look at the company’s Stakeholder Communications.

According to the Investor section of the corporate site, providing the company’s overview, “Kinder Morgan believes that transparency drives accountability and publishes both its annual budget and monthly environmental, health and safety performance on its web site for investors and the public to track”.
The corporate site also provides the so-called investor kit, which contains our latest annual report, our 3 most recent press releases and a recent news article and is available via mail upon request though a fill-in blanks form  display.

The company emphasizes it protects the Public, Employees and the Environment via the Environmental, Health and Safety (EHS) program and provides the Sustainability report, which has sections covering almost all specific operational issues and the ways of overcoming these problems. The “About us” section covers the structure, and quantitative and qualitative characteristics of the company: history, corporate profile, asset map, segments description, etc for all the three units of the Kinder Morgan Corporation – Knight, Inc., Kinder Morgan Energy partners, L.P., and Kinder Morgan Management, LLC. The “Investor” section provides full informational coverage on the company’s financial data, including Annual reports, Corporate governance and profile, history, management, press releases, ownership, presentations, analyst coverage, and much more, thus addressing the company’s stockholders (and bondholders, not mentioned directly).

The part addressing the managers and the customers on the corporate site (section “Businesses/Customers”) deals with the company’s major sectors, describing their activities.
Kinder Morgan addresses the Community, society and nation-state and the employees through the Environment and Safety section, and partly via the Public Awareness initiative. The company also attracts the attention of the society through the Kinder Morgan foundation, which funds non-profit programs that provide youth with education, arts and cultural opportunities.

The suppliers and distributors communication is performed via the Work with KM section, which offers mutually beneficial conditions of the cooperation and other requirements to comply with (e.g. the Contractor Safety Program, initiated to improve the safety and health of all personnel and to protect the environment).

The highest reported executive salary as a percentage of last year’s net income. To do this, record the highest given officer pay and compare it to net income found under Key Statistics at Yahoo Finance is Mr. Jeffrey R. Armstrong’s (Pres – Terminals of Kinder Morgan G P Inc. – Gen. Partner and Pres – Terminals of Kinder Morgan Management LLC) $1,172.00K equal to 0,12% of the 2006 net income of $972,143.00K.

Institutional Investor magazine identified America’s Most Shareholder-Friendly Companies and among them is Kinder Morgan, representing the energy sector.

Kinder Morgan deals with corporate governance issues via the Ethics Hotline – a confidential way to seek assistance and report potential violations regarding ethics and compliance issues. It is hosted by a third party to maintain confidentiality and anonymity when requested and is one of the evident proofs of the company’s desire to maintain the trust and Kinder Morgan’s Corporate Governance Quotient (CGQ) as of 1-Oct-07 is better than 0% of S&P 500 companies (KM removed from the list in May) and 0% of Materials companies.

According to the Corporate Governance covered in the company’s annual report, Kinder Morgan has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The chairman of the audit committee has been determined by the board to be an “audit committee financial expert.” As described under the relevant standards, all of the members of the audit committee are independent.

On April 11, 2006, the company’s chief executive officer certified to the New York Stock Exchange, as required by New York Stock Exchange Listed Company Manual (Section 303A.12(a)). They also file as an exhibit the Sarbanes-Oxley Act Section 302 certifications regarding the quality of their public disclosure to the annual report.

The governance guidelines, the charters of the audit committee, compensation committee and nominating and governance committee, and our code of business conduct and ethics (which applies to senior financial and accounting officers and the chief executive officer, among others) are in print to any unitholder who requests and available free of charge within the “Investors” information section of our Internet website, at

I believe the public disclosure of the company’s corporate governance is very clear and Kinder Morgan even outperforms many competitors in terms of stockholder’s protection ratings. All the additional information is available in the company’s annual report.

The Social Responsibility Issue I would like to pay special attention to is the company’s public awareness program.

The Kinder Morgan Public Awareness Program was developed to raise the general public’s awareness regarding the safety of pipeline operations and this program is vital to the safe operation of the company’s pipelines. The idea of the program is the reduction of the likelihood and potential impact of pipeline emergencies and releases though the public awareness.

Kinder Morgan’s Public Awareness Program satisfies the requirements of the Pipeline Safety Improvement Act (PSIA) of 2002 and the revised regulatory requirements of 49 CFR Parts 192, 195 and the American Petroleum Institute (API) Recommended Practice (RP) 1162, according to the company’s site.

This program applies to local distribution companies, intrastate and interstate natural gas transmission pipelines and Jurisdictional Gathering and intrastate and interstate hazardous liquid pipelines.

The Public Awareness Program communicates the following (as stated on the corporate site): awareness of pipelines in the community and their role in transporting energy; the information on how to recognize and respond to a pipeline emergency; awareness of hazards and measures taken to prevent pipeline accidents/incidents; emergency preparedness and measures taken to mitigate consequences of pipeline accidents/incidents, prevention and impacts of third party damages on pipeline systems (one-call requirements), and much more.

Kinder Morgan supports US Homeland Security efforts and encourages immediately notifying and reporting any suspicious persons and/or activities near the pipeline to the local law enforcement authorities by dialing the emergency number 911.

There also are all sorts of tips and explanations including the situation description, Emergency Action Procedures for Emergency Responders, Recognizing and Responding to Pipeline Emergencies, Signs of a pipeline release, what to do and what not to do If you suspect a pipeline leak has occurred, and much more. The social responsibility and the drive to inform and protect society is very clear in this part of the company’s address to the public.

The company addresses all kinds of potential contributors to the safety issues: affected public, the public and emergency officials, excavators, etc. The site also offers all kinds of informative brochures to extend the knowledge and understanding of potentially hazardous issues.

As for the company’s risk management activities, Kinder Morgan is determined to protect the public, employees, customers and the environment through operating its facilities in a safe and reliable manner. Every Kinder Morgan pipeline follows a Pipeline Integrity Management Program to ensure the optimal safety and operation of the pipeline through regular testing and inspection. This can involve smart pigging, hydrostatic testing, aerial/line patrolling and routine visits by company personnel – the pipelines are monitored and controlled through sophisticated control centers 24 hours a day, all year long. These control centers with duplicate backup systems have the capability to close valves remotely in the unlikely event of a pipeline emergency and continuously monitor the system pressures, flows and customer deliveries.

As for the materials used, the Kinder Morgan Company claims to use the “state of the art materials to help prevent external corrosion such as high-strength micro-alloyed steel coated with fusion-bond epoxy (FBE) which is augmented by a comprehensive protection system”.

The Kinder Morgan’s vision incorporates the commitment to the operation of facilities in compliance with all applicable rules and regulations, public safety, and protection of the environment. “To work openly and cooperatively with all stakeholders regarding environmental, health and safety (EHS) issues” is the company’s main goal.

The Code of Business Conduct and Ethics (effective 01/01/2000 and revised 7/14/2006) was created to promote honest and ethical conduct, including the ethical handling of business relationships; full, fair, accurate, timely, and understandable disclosure in reports and documents; and compliance with applicable rules, regulations and governmental laws.

The general business principles as stated in the Code are (to the customers): “to win and maintain customers by developing and providing products and services which offer value in terms of price, quality, safety and environmental impact, and which are supported by the requisite environmental, commercial and technological expertise” (The Code of Business Conduct and Ethics, 2000).

The company provides the vision in terms of social responsibility in full integrity via all means of communication and via different message – core values, vision, business ethics statement, etc. The extent to which Kinder Morgan cares for the society in general and for its employees, stockholders and management is the characteristic that makes this company stand out on the business arena.

Hopefully, the company will be able to stick to the given commitments and remain the example of one of the most socially responsible companies of the United States.

Was this material helpful?

Related Essays

Leave A Comment?