Governance Highlights

Caterpillar strives to make its governance standards and principles transparent. Key points and significant changes in our standards and principles, as well as the overall evolution of our key governance decisions, are highlighted here.

Corporate Governance: Highlights

  • Our Code of Worldwide Business Conduct, first published in 1974 and last amended in 2010, sets a high standard for honesty and ethical behavior by every employee.
  • In 1999, the Caterpillar Board developed and published guidelines on corporate governance, which among other provisions includes the establishment of a fully independent Board of Directors, with the sole exception of its Chairman, and a fully independent Compensation Committee.
  • In advance of the 1999 report of the Blue Ribbon Committee on Audit Committee Effectiveness, Caterpillar had already implemented many of its recommendations, including a fully independent Audit Committee with a financial expert as chairman.
  • In 1993, Caterpillar's Board adopted written charters for each of its committees, which the recently passed Sarbanes-Oxley Act only now makes mandatory.
  • In 1992, the Caterpillar Board adopted a confidential voting policy for shareholders.
  • While not required by law, Caterpillar established share ownership guidelines in connection with stock option grants for corporate officers and directors over a decade ago. All of Caterpillar's equity-based compensation plans have been approved by shareholders. Furthermore, Caterpillar has never offered golden parachutes to any company officers and has never repriced stock option grants.
  • On June 17, 2005, Caterpillar Inc. executed a Fourth Amended and Restated version of its Shareholder Rights Plan with Mellon Investor Services LLC. The modified agreement moved the final termination date of the Shareholder Rights Plan from December 11, 2006 to June 30, 2005, terminating the Shareholder Rights Plan approximately 17 months earlier than the original agreement and subsequent amendments had specified.
  • Company policy requires former senior manager level (or higher) employees of our outside auditor to wait three years before being eligible for certain management level positions at Caterpillar and requires rotation of outside auditor partners in compliance with the requirements of the Sarbanes-Oxley Act of 2002.