IAEA Nuclear Safety Culture Conference

The International Atomic Energy Agency (IAEA) recently sponsored a week-long conference* to celebrate 30 years of interest and work in safety culture (SC).  By our reckoning, there were about 75 individual presentations in plenary sessions and smaller groups; dialog sessions with presenters and subject matter experts; speeches and panels; and over 30 posters.  It must have been quite a circus.

We cannot justly summarize the entire conference in this space but we can highlight material related to SC factors we’ve emphasized or people we’ve discussed on Safetymatters, or interesting items that merit your consideration.

Topics We Care About

A Systems Viewpoint

Given that the IAEA has promoted a systemic approach to safety and it was a major conference topic it’s no surprise that many participants addressed it.  But we were still pleased to see over 30 presentations, posters and dialogues that included mention of systems, system dynamics, and systemic and/or holistic viewpoints or analyses.  Specific topics covered a broad range including complexity, coupling, Fukushima, the Interaction between Human, Technical and Organizational Factors (HTOF), error/incident analysis, regulator-licensee relationships, SC assessment, situational adaptability and system dynamics.

Role of Leadership

Leadership and Management for Safety was another major conference topic.  Leadership in a substantive context was mentioned in about 20 presentations and posters, usually as one of multiple success factors in creating and maintaining a strong SC.  Topics included leader/leadership commitment, skills, specific competences, attributes, obligations and responsibilities; leadership’s general importance, relationship to performance and role in accidents; and the importance of leadership in nuclear regulatory agencies. 

Decision Making

This was mentioned about 10 times, with multiple discussions of decisions made during the early stages of the Fukushima disaster.  Other presenters described how specific techniques, such as Probabilistic Risk Assessment and Human Reliability Analysis, or general approaches, such risk control and risk informed, can contribute to decision making, which was seen as an important component of SC.

Compensation and Rewards

We’ve always been clear: If SC and safety performance are important then people from top executives to individual workers should be rewarded (by which we mean paid money) for doing it well.  But, as usual, there was zero mention of compensation in the conference materials.  Rewards were mentioned a few times, mostly by regulators, but with no hint they were referring to monetary rewards.  Overall, a continuing disappointment.   

Participants Who Have Been Featured in Safetymatters

Over the years we have presented the work of many conference participants to Safetymatters readers.  Following are some familiar names that caught our eye.  Page numbers refer to the conference “Programme and Abstracts” document.
 
We have to begin with Edgar Schein, the architect of the cultural construct used by almost everyone in the SC space.  His discussion paper (p. 47) argued that the SC components in a nuclear plant depend on whether the executives actually create the climate of trust and openness that the other attributes hinge on.  We’ve referred to Schein so often he has his own label on Safetymatters.

Mats Alvesson’s presentation (p. 46) discussed “hyper culture,” the vague and idealistic terms executives often promote that look good in policy documents but seldom work well in practice.  This presentation is consistent with his article on Functional Stupidity which we reviewed on Feb. 23, 2016.

Sonja Haber’s paper (p. 55) outlined a road map for the nuclear community to move forward in the way it thinks about SC.  Dr. Haber has conducted many SC assessments for the Department of Energy that we have reviewed on Safetymatters. 

Ken Koves of INPO led or participated in three dialogue sessions.  He was a principal researcher in a project that correlated SC survey data with safety performance measures which we reviewed on Oct. 22, 2010 and Oct. 5, 2014.

Najmedin Meshkati discussed (p. 60) how organizations react when their control systems start to run behind environmental demands using Fukushima as an illustrative case.  His presentation draws on an article he coauthored comparing the cultures at TEPCO’s Fukushima Daiichi plant and Tohoku Electric’s Onagawa plant which we reviewed on Mar. 19, 2014.

Jean-Marie Rousseau co-authored a paper (p. 139) on the transfer of lesson learned from accidents in one industry to another industry.  We reviewed his paper on the effects of competitive pressures on nuclear safety management issues on May 8, 2013.

Carlo Rusconi discussed (p. 167) how the over-specialization of knowledge required by decision makers can result in pools of knowledge rather than a stream accessible to all members of an organization.  A systemic approach to training can address this issue.  We reviewed Rusconi’s earlier papers on training on June 26, 2013 and Jan. 9, 2014.

Richard Taylor’s presentation (p. 68) covered major event precursors and organizations’ failure to learn from previous events.  We reviewed his keynote address at a previous IAEA conference where he discussed using system dynamics to model organizational archetypes on July 31, 2012.

Madalina Tronea talked about (p. 114) the active oversight of nuclear plant SC by the National Commission for Nuclear Activities Control (CNCAN), the Romanian regulatory authority.  CNCAN has developed its own model of organizational culture and uses multiple methods to collect information for SC assessment.  We reviewed her initial evaluation guidelines on Mar. 23, 2012. 

Our Perspective

Many of the presentations were program descriptions or status reports related to the presenter’s employer, usually a utility or regulatory agency.  Fukushima was analyzed or mentioned in 40 different papers or posters.  Overall, there were relatively few efforts to promote new ideas, insights or information.  Having said that, following are some materials you should consider reviewing.

From the conference participants mentioned above, Haber’s abstract (p. 55) and Rusconi’s abstract (p. 167) are worth reading.  Taylor’s abstract (p. 68) and slides are also worth reviewing.  He advocates using system dynamics to analyze complicated issues like the effectiveness of organizational learning and how events can percolate through a supply chain.

Benoît Bernard described the Belgian regulator’s five years of experience assessing nuclear plant SC.  Note that lessons learned are described in his abstract (p. 113) but are somewhat buried in his presentation slides.

If you’re interested in a systems view of SC, check out Francisco de Lemos’ presentation (p. 63) which gives a concise depiction of a complex system plus a Systems Theoretic Accident Models and Processes (STAMP) analysis.  His paper is based on Nancy Leveson’s work which we reviewed on Nov. 11, 2013.

Diana Engström argued that nuclear personnel can put more faith in reported numbers than justified by the underlying information, e.g., CAP trending data, and thus actually add risk to the overall system.  We’d call this practice an example of functional stupidity although she doesn’t use that term in her provocative paper.  Both her abstract (p. 126) and slides are worth reviewing.

Jean Paries gave a talk on the need for resilience in the management of nuclear operations.  The abstract (p. 228) is clear and concise; there is additional information in his slides but they are a bit messy.

And that’s it for this installment.  Be safe.  Please don’t drink and text.


*  International Atomic Energy Agency, International Conference on Human and Organizational Aspects of Assuring Nuclear Safety: Exploring 30 years of Safety Culture (Feb. 22–26, 2016).  This page shows the published conference materials.  Thanks to Madalina Tronea for publicizing them.  Dr. Tronea is the founder/moderator of the LinkedIn Nuclear Safety Culture discussion group. 

Financial Incentives to Promote Safety Culture at the Vit Plant

The Vit Plant

We have reported on safety culture (SC) issues at the Hanford Waste Treatment Plant (WTP, or “vit plant”) for years.  Some of these issues arose in the Department of Energy (DOE) organization at Hanford; other issues became evident at Bechtel, DOE’s prime contractor at Hanford.  But this post focuses on a bit of good news: recent Bechtel contracts have included financial incentives for good performance related to establishing and maintaining a strong SC.*

The incentives are very small potatoes in the overall scheme of things.  The WTP is an $11 billion plus project (so far); the semi-annual SC incentives have been in the $1-5 million range.  But it is the correct signal for the government to be sending to a contractor.  It’s also interesting how the incentives have been fiddled with during their brief existence, as shown in the following table.  To keep things simple, the table excludes incentive program components that are not related to SC, e.g., cost performance incentives.  Note that the dollar amounts shown are the maximum Bechtel can earn; published payouts to date have been less than the maximums.

From July 1, 2012 to June 30, 2013 the contract included a project management incentive (PMI) component.  Nuclear Safety and Quality Culture items (the Corrective Action Program, Employee Concerns Program, Differing Professional Opinion process, Safety Conscious Work Environment (SCWE) and Integrated Safety Management Systems) were 20-30% of the PMI.

Starting July 1, 2013 and continuing to the present a section was added to the incentive plan covering Self-Analysis/Assessment/Discovery/Action.  This basically means Bechtel will be rewarded for identifying and fixing its problems before outsiders tell them to.  The contract does not characterize this activity as part of SC but we do; fixing problems is an essential artifact of a strong SC.  In addition, the attributes under this section, including transparency and organizational learning, are also attributes of a strong SC.  Another new section on Environmental, Safety and Health is mostly about industrial safety but includes promoting a robust NSQC embracing INPO principles, including a SCWE.  The section on the Quality Assurance program includes supporting an effective CAP and, starting July 1, 2014, maintaining a robust quality culture.

Start	End	Project Management Incentive (PMI)	Nuclear Safety and Quality Culture (NSQC)
7/1/2012	12/31/2012	$3,150,000	$945,000	30% of PMI: NSQC inc. CAP, ECP, DPO, SCWE (25%), Integrated Safety Management Systems (5%)
1/1/2013	6/30/2013	$3,780,000	$756,000	20% of PMI: NSQC inc. CAP, ECP, DPO, SCWE (15%), Integrated Safety Management Systems (5%)
		Self-Analysis/ Assessment/ Discovery/Action	Environmental, Safety & Health	QA Program
7/1/2013	12/31/2013	$3,500,000	$1,000,000	$800,000
1/1/2014	6/30/2014	$3,500,000	$1,000,000	$800,000
7/1/2014	12/31/2014	$1,260,000	$1,260,000	$1,260,000

Our Perspective

For starters, let’s give credit where credit is due: Huzzah to DOE and Bechtel.  For a long time, we have been saying that organizational reward systems should include SC components.  Safety slogans and empty mantras are just that—empty.  If a government agency, or a nuclear plant owner, or a board of directors, or any other overseer truly values SC then they should put some money where their mouths are.

Enough cheering, let’s put our reality hat back on.  Could Bechtel (or any other contractor) game the incentive system to get rewarded without actually creating a strong SC?  Possibly.  Who would you bet on: government bureaucrats or a clever, financially motivated contractor?  But an official incentive plan like the one described above is a good start.

Now that DOE has figured out how to design a contract that aims to motivate a contractor to strengthen its SC, let’s turn the spotlight back on DOE itself.  How does DOE do on transparency, extent of condition and other SC attributes?  Not so good.  Over the last few years we have been reporting on the DOE effort to evaluate SC at other (i.e., non-WTP) sites to determine if WTP SC issues exist elsewhere.  We saw foot-dragging, an unorganized SC assessment program and deliberate opacity in the resultant reports.  DOE can and should do better.

*  The WTP Performance Evaluation and Measurement Plans used in this post are available here.  For prior related posts click on the Vit Plant label below.

The McKinsey Quarterly at 50 Years

The Quarterly’s mission is to help define the senior management agenda; this anniversary issue* is focused on McKinsey’s vision for the future of management. (p. 1)  The issue is organized around several themes (strategy, productivity, etc.) but we’re interested in how it addresses culture.  The word appears in several articles, but usually in passing or in a way not readily applied to nuclear safety culture.  There were, however, a few interesting tidbits.  

One article focused on artificial intelligence as a sweeping technological change with exponential impacts on business.  An interviewee opined that current senior management culture based on domain expertise will need to give way to becoming data-driven.  “[D]ata expertise is at least as important [as domain expertise] and will become exponentially more important.  So this is the trick.  Data will tell you what’s really going on, whereas domain expertise will always bias you toward the status quo, and that makes it very hard to keep up with these disruptions.” (p. 73)  Does the culture of the nuclear industry ignore or undervalue disruptions of all types because they may threaten the status quo?

McKinsey’s former managing director listed several keys to corporate longevity, including “creating a culture of dissatisfaction with current performance, however good” and “focus[ing] relentlessly on values . . . A company’s values are judged by actions and behavior, not words and mission statements.” (pp. 121-22)  The first point reinforces the concept of a learning organization; the second the belief that behavior, e.g., the series of decisions made in an organization, is culture-in-action.  Any design for a strong safety culture should consider both.

Lou Gerstner (the man who saved IBM) also had something to say about values in action: “The rewards system is a powerful driver of behavior and therefore culture. Teamwork is hard to cultivate in a world where employees are paid solely on their individual performance.” (p. 126)  We have long argued that executive compensation schemes that pay more for production or cost control than safety send an accurate, although inappropriate, signal of what’s really important throughout the organization.

Finally, management guru Tom Peters had some comments about leadership.  “If you take a leadership job, you do people.  Period.  It’s what you do. It’s what you’re paid to do.  People, period.  Should you have a great strategy?  Yes, you should.  How do you get a great strategy?  By finding the world’s greatest strategist, not by being the world’s greatest strategist.  You do people.  Not my fault.  You chose it.  And if you don’t get off on it, do the world a favor and get the hell out before dawn, preferably without a gilded parachute.  But if you want the gilded parachute, it’s worth it to get rid of you.” (p. 93)  Too simplistic?  Probably, but the point that senior managers have to spend significant time identifying, developing and keeping the most qualified people is well-taken.

Our Perspective

None of this is groundbreaking news.  But in a world awash in technology innovations and “big data” it’s interesting that one of the world’s foremost management consulting practices still sees a major role for culture in management’s future.

*  McKinsey Quarterly, no. 3 (2014).

1995 ANS Safety Culture Conference: A Portal to the Past

In April 1995 the American Nuclear Society (ANS) sponsored a nuclear safety culture (SC) conference in Vienna.  This was a large undertaking, with over 80 presentations; the proceedings are almost 900 pages in length.*  Presenters included industry participants, regulators, academics and consultants.  1995 was early in the post-Soviet era and the new openness (and concerns about Soviet reactors) led to a large number of presenters from Russia, Ukraine and Eastern Europe.  This post presents some conference highlights on topics we emphasize on Safetymatters.

Decision Making

For us, decision making should be systemic, i.e., consider all relevant inputs and the myriad ways a decision can affect consequences.  The same rigor should be applied to all kinds of decisions—finance, design, operations, resource allocation, personnel, etc.  Safety should always have the highest priority and decisions should accord safety its appropriate consideration.  Some presenters echoed this view.

“Safety was (and still is) seen as being vital to the success of the industry and hence the analysis and assessment of safety became an integral part of management decision making” (p. 41); “. . . in daily practice: overriding priority to safety is the principle, to be taken into account before making any decision” (p. 66); and “The complexity of operations implies a systemic decision process.” (p. 227)

The relationship between leadership and decisions was mentioned.  “The line management are a very important area, as they must . . . realise how their own actions and decisions affect Safety Culture.  The wrong actions, or perceived messages could undermine the work of the team leaders” (p. 186); “. . . statements alone do not constitute support; in the intermediate and long-term, true support is demonstrated by behavior and decision and not by what is said.” (p. 732)

Risk was recognized as a factor in decision making.  “Risk culture yields insights that permit balanced safety vs.cost decisions to be made” (p. 325); “Rational decision making is based on facts, experience, cognitive (mental) models and expected outcomes giving due consideration to uncertainties in the foregoing and the generally probabilistic nature of technical and human matters.  Conservative decision making is rational decision making that is risk-averse.  A conservative decision is weighted in favor of risk control at the expense of cost.” (p. 435)

In sum, nuclear thought leaders knew what good decision making should look like—but we still see cases that do not live up to that standard.

Rewards

Rewards or compensation were mentioned by people from nuclear operating organizations.  Incentive-based compensation was included as a key aspect of the TEPCO management approach (p. 551) and a nuclear lab manager recommended using monetary compensation to encourage cooperation between organizational departments. (p. 643)  A presenter from a power plant said “A recognition scheme is in place . . . to recognise and reward individuals and teams for their contribution towards quality improvement and nuclear safety enhancement.” (p. 805)

Rewards were also mentioned by several presenters who did not come from power plants.  For example, the reward system should stress safety (p. 322); rewards should be given for exhibiting a “caring attitude” about SC (p. 348) and to people who call attention to safety problems. (p. 527)  On the flip side, a regulator complained about plants that rewarded behavior that might cause safety to erode. (pp. 651, 656) 

Even in 1995 the presentations could have been stronger since INSAG-4** is so clear on the topic: “Importantly, at operating plants, systems of reward do not encourage high plant output levels if this prejudices safety.  Incentives are therefore not based on production levels alone but are also related to safety performance.” (INSAG-4, p. 11)  Today, our own research has shown that nuclear executives’ compensation often favors production.   

Systems Approach

We have always favored nuclear organizational mental models that consider feedback loops, time delays, adaptation, evolution and learning—a systems approach.  Presenters’ references to a system include “commercial, public, and military operators of complex high reliability socio-technical systems” (p. 260); “. . . assess the organisational, managerial and socio-technical influences on the Safety Culture of socio-technical systems such as nuclear power plants” (p. 308); “Within the complex system such as . . . [a] nuclear power plant there is a vast number of opportunities for failures to stay hidden in the system” (p. 541); and “It is proposed that the plant should be viewed as an integrated sociotechnical system . . .” (p. 541)

There are three system-related presentations that we suggest you read in their entirety; they have too many good points to summarize here.  One is by Electricité de France (EdF) personnel (pp. 193-201), another by Constance Perin (pp. 330-336) and a third by John Carroll (pp. 338-345). 

Here’s a sample, from Perin: “Through self-analysis, nuclear organizations can understand how they currently respond socially, culturally, and technically to such system characteristics of complexity, density, obscured signals, and delayed feedback in order to assure their capacities for anticipating, preventing, and recovering from threats to safety.” (p. 330)  It could have been written yesterday.

The Role of the Regulator

By 1995 INSAG-4 had been published and generally accepted by the nuclear community but countries were still trying to define the appropriate role for the regulator; the topic merited a half-dozen presentations.  Key points included the regulator (1) requiring that an effective SC be established, (2) establishing safety as a top-level goal and (3) performing some assessment of a licensee’ safety management system (either directly or part of ordinary inspection duties).  There was some uncertainty about how to proceed with compliance focus vs. qualitative assessment.

Today, at least two European countries are looking at detailed SC assessment, in effect, regulating SC.  In the U.S., the NRC issued a SC policy statement and performs back-door, de facto SC regulation through the “bring me another rock” approach.

So conditions have changed in regulatory space, arguably for the better when the regulator limits its focus to truly safety-significant activities.

Our Perspective

In 1995, some (but not all) people held what we’d call a contemporary view of SC.  For example, “Safety culture constitutes a state of mind with regard to safety: the value we attribute to it, the priority we give it, the interest we show in it.  This state of mind determines attitudes and behavior.” (p. 495)

But some things have changed.  For example, several presentations mentioned SC surveys—their design, administration, analysis and implications.  We now (correctly) understand that SC surveys are a snapshot of safety climate and only one input into a competent SC assessment.

And some things did not turn out well.  For example, a TEPCO presentation said “the decision making process is governed by the philosophy of valuing harmony highly so that a conclusion preferred by all the members is chosen as far as possible when there are divided opinions.” (p. 583)  Apparently harmony was so valued that no one complained that Fukushima site protection was clearly inadequate and essential emergency equipment was exposed to grave hazards. 


*  A. Carnino and G. Weimann, ed., “Proceedings of the International Topical Meeting on Safety Culture in Nuclear Installations,” April 24-28, 1995 (Vienna: ANS Austria Local Section, 1995).  Thanks to Bill Mullins for unearthing this document.

**  International Nuclear Safety Advisory Group, “Safety Culture,” Safety Series No. 75-INSAG-4, (Vienna: IAEA, 1991). INSAG-4 included a definition of SC, a description of SC components, and illustrative evidence that the components exist in a specific organization.

Four Years of Safetymatters

Aztec Calendar

Over the four plus years we have been publishing this blog, regular readers will have noticed some recurring themes in our posts.  The purpose of this post is to summarize our perspective on these key themes.  We have attempted to build a body of work that is useful and insightful for you.

Systems View

We have consistently considered safety culture (SC) in the nuclear industry to be one component of a complicated socio-technical system.  A systems view provides a powerful mental model for analyzing and understanding organizational behavior. 

Our design and explicative efforts began with system dynamics as described by authors such as Peter Senge, focusing on characteristics such as feedback loops and time delays that can affect system behavior and lead to unexpected, non-linear changes in system performance.  Later, we expanded our discussion to incorporate the ways systems adapt and evolve over time in response to internal and external pressures.  Because they evolve, socio-technical organizations are learning organizations but continuous improvement is not guaranteed; in fact, evolution in response to pressure can lead to poorer performance.

The systems view, system dynamics and their application through computer simulation techniques are incorporated in the NuclearSafetySim management training tool.

Decision Making

A critical, defining activity of any organization is decision making.  Decision making determines what will (or will not) be done, by whom, and with what priority and resources.  Decision making is  directed and constrained by factors including laws, regulations, policies, goals, procedures and resource availability.  In addition, decision making is imbued with and reflective of the organization's values, mental models and aspirations, i.e., its culture, including safety culture.

Decision making is intimately related to an organization's financial compensation and incentive program.  We've commented on these programs in nuclear and non-nuclear organizations and identified the performance goals for which executives received the largest rewards; often, these were not safety goals.

Decision making is part of the behavior exhibited by senior managers.  We expect leaders to model desired behavior and are disappointed when they don't.  We have provided examples of good and bad decisions and leader behavior. 

Safety Culture Assessment

We have cited NRC Commissioner Apostolakis' observation that “we really care about what people do and maybe not why they do it . . .”  We sympathize with that view.  If organizations are making correct decisions and getting acceptable performance, the “why” is not immediately important.  However, in the longer run, trying to identify the why is essential, both to preserve organizational effectiveness and to provide a management (and mental) model that can be transported elsewhere in a fleet or industry.

What is not useful, and possibly even a disservice, is a feckless organizational SC “analysis” that focuses on a laundry list of attributes or limits remedial actions to retraining, closer oversight and selective punishment.  Such approaches ignore systemic factors and cannot provide long-term successful solutions.

We have always been skeptical of the value of SC surveys.  Over time, we saw that others shared our view.  Currently, broad-scope, in-depth interviews and focus groups are recognized as preferred ways to attempt to gauge an organization's SC and we generally support such approaches.

On a related topic, we were skeptical of the NRC's SC initiatives, which culminated in the SC Policy Statement.  As we have seen, this “policy” has led to back door de facto regulation of SC.

References and Examples

We've identified a library of references related to SC.  We review the work of leading organizational thinkers, social scientists and management writers, attempt to accurately summarize their work and add value by relating it to our views on SC.  We've reported on the contributions of Dekker, Dörner, Hollnagel, Kahneman, Perin, Perrow, Reason, Schein, Taleb, Vaughan, Weick and others.

We've also posted on the travails of organizations that dug themselves into holes that brought their SC into question.  Some of these were relatively small potatoes, e.g., Vermont Yankee and EdF, but others were actual disasters, e.g., Massey Energy and BP.  We've also covered DOE, especially the Hanford Waste Treatment and Immobilization Plant (aka the Vit plant).

Conclusion

We believe the nuclear industry is generally well-managed by well-intentioned personnel but can be affected by the natural organizational ailments of complacency, normalization of deviation, drift, hubris, incompetence and occasional criminality.  Our perspective has evolved as we have learned more about organizations in general and SC in particular.  Channeling John Maynard Keynes, we adapt our models when we become aware of new facts or better ways of looking at the data.  We hope you continue to follow Safetymatters.  

Inhibiting Excessive Risk Taking by Executives

The Federal Reserve Board has been doing some arm twisting with U.S. financial services companies to adjust their executive compensation plans - and those plans are in fact being modified to cap bonuses associated with achieving performance goals.  These actions have their genesis in the financial crisis where it appeared that incentives could encourage excessive risk taking by management.  A Wall Street Journal article* notes “regulators are still looking at ways to lower risk in the banking system, even if it means interfering with private pay practices.”  This follows a similar trend in Europe and where some firms are considering increasing salaries to make up for less bonus potential.

These actions merit some thoughtful consideration within the U.S. nuclear industry.  While the Fed’s concern is excessive business risk, the analog in nuclear operations is safety risk.  Both go to ensuring that the “system” (banking or nuclear production) remain within controlled limits.  As we have noted in prior blog posts (July 6 and July 9, 2010), there have been trends for nuclear executive compensation to both escalate and include significant performance based components.  The increased salaries probably reflect competition for the best qualified executives and are indicative of the great responsibilities of nuclear management.  However the trend to include large short-term bonuses (comprising up to 60-70% of total compensation) may be indicative of the evolution of “nuclear generation as a business” and the large profit potential available at high capacity factors.  Whatever the nominal amount of pressure on nuclear executives to achieve operating goals, the presence of very large monetary incentives can only increase that pressure.  In a strong safety culture environment where perception of management’s priorities is central, incentive based compensation plans can easily create presumptions regarding the motivation for management decisions.  At least one nuclear utility has concluded that incentives were not appropriate and taken action to adjust their compensation plans.  We have advocated dialing back incentives in favor of more direct compensation.

It is also rather interesting that the Fed decided to step into the province of private compensation practices.  A similar initiative by the NRC seems unlikely given its reluctance to impinge on management performance in any manner.  As noted in our February 28, 2013 post the NRC has included some nominal but poorly focused language on incentives in its Safety Culture Common Language Path Forward.  This seems to indicate that the NRC believes incentives are or could be relevant.  The best approach may be for the NRC to become more intrusive - to determine if compensation plans have the potential to lead to excessive risk taking.  This would require the NRC to obtain compensation plan information from its licensees, characterize the extent and magnitude of performance based incentives, and consider the effect of such incentives in assessing specific operational issues that arise in its normal regulatory oversight activities.  Only if some relationship appeared would the NRC need to consider whether to take action similar to the Fed or other means to ameliorate risk taking.


 
*  A.Lucchetti and J. Steinberg, "Regulators Get Banks to Rein In Bonus Pay," Wall Street Journal (April 23, 2013).