Governance creates value and builds trust.

We believe a robust governance framework creates long-term value for our shareholders, strengthens board and management accountability, and builds trust in the company and our brand.

Our board of directors has direct oversight of our climate and sustainability efforts. In 2021, Caterpillar leadership regularly reported to the board’s Public Policy and Governance Committee (PPG) regarding sustainability and climate strategies, priorities, goals and performance. The PPG was also briefed on these and other ESG issues as well as the perspectives of investors, customers, employees and other stakeholders. The PPG also reviewed Caterpillar’s annual political contributions and recommended the amount the company should contribute to the Caterpillar Foundation. The PPG provided regular updates to the board on these matters.

Recognizing the increasing complexity and stakeholder interest in climate, sustainability and other ESG issues, in April 2022, the board decided to restructure certain of its committees. The board created the Sustainability & other Public Policy Committee (SPPC) to oversee all of the public policy matters previously overseen by the PPG. In addition, the SPPC will have explicit oversight over sustainability, social and public policy matters, including those related to the environment, climate change, human rights and lobbying. This restructuring will be effective immediately following the annual shareholder meeting on June 8, 2022.

 

Governance Highlights*

Size of Board 10
Number of Independent Directors 9
Average Age of Directors 64
Average Director Tenure (in years) 8
Annual Election of Directors Yes
Mandatory Retirement Age 74
Women 30%
Diversity 20%
Majority Voting in Director Elections Yes
Independent Presiding Director Yes
Code of Conduct for Directors, Officers and Employees Yes
Supermajority Voting Threshold for Mergers No
Proxy Access Yes
Shareholder Action by Written Consent No
Shareholder Ability to Call Special Meetings Yes
Poison Pill No
Stock Ownership Guidelines for Directors and Executive Officers Yes
Anti-Hedging and Pledging Policies Yes
Clawback Policy Yes

 

*The information in this table reflects only the director nominees standing for re-election at the annual meeting of shareholders on June 8, 2022.

Ethics & Compliance

Caterpillar operates according to Our Values in Action — Caterpillar’s Code of Conduct. The Code defines our values — Integrity, Excellence, Teamwork, Commitment and Sustainability — which represent what we stand for and how we conduct ourselves with our customers, suppliers, communities and one another.

It guides our employees, affiliates and board members in living our Values each day. Among the topics covered are avoiding conflicts of interest, fair competition, anti-bribery, trade compliance, employee performance and development, non-harassment, non-discrimination, personal privacy, supplier expectations and environmental responsibility.

All Caterpillar employees are annually required to complete Code of Conduct training. As part of this training, employees must certify that they have read, understand and agree to comply with the Code of Conduct. Additional compliance training is also provided to employees based on risk identified in their job roles.

Ethics & Compliance Helpline

We hold ourselves to the highest standard of integrity and ethical behavior. We promote and respect the rule of law and expect our employees and suppliers to do the same. We encourage individuals to report situations in which they have a good-faith belief that any circumstance or action has violated our Code of Conduct, enterprise policy or applicable law. Those who wish to report a concern can do so confidentially and anonymously through resources maintained by our Office of Business Practices. These resources include:

  • Online reporting
  • Email reporting at BusinessPractices@cat.com
  • Our toll-free Helpline, available in a number of countries
  • Telephone reporting with toll-free and call-collect dialing options that support reporting in multiple languages and from multiple countries

Caterpillar will not take any action — or tolerate any reprisal — against any party for raising an issue in good faith.

Men on worksite
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Men on worksite
Cat Generators
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Cat® generator sets installed at a landfill gas processing and power plant near Montreal, Canada, producing electricity from landfill gas.

Cat Generators

Learn more about our governance framework, corporate governance initiatives and board composition:

2021 Caterpillar Proxy Statement

Board Committees

Caterpillar Code of Conduct

Risk Management

Risk is an inherent part of conducting global business, and managing risk is fundamental to the way we work. Through robust programs including Enterprise Risk Management, Compliance and Audit, we engage across the enterprise to identify, prioritize and manage risks.

Enterprise Risk Management and our enterprise strategy are linked: To better inform our decision-making, we evaluate risks at both the business unit and enterprise levels, considering the likelihood and potential impact of each risk. These evaluations guide our approach for risk management, allow us to understand the challenges these risks bring and position our business for the opportunities they present.

We consider risks across many categories, including strategic, operational, financial, compliance and hazard risks. We embed ESG risks into each risk category as part of our commitment to sustainability. We treat these ESG risks with the same priority and rigor as other risks across the business.

As risk management is fundamental to our culture, there is strong engagement in risk management from the CEO, executives, and senior leaders. The company’s officers share accountability for business risks, and the board has oversight of the enterprise process. The board and its committees oversee risk and have regular updates on topics that are identified through the risk management process. Outputs from risk management drive strategic initiatives and disclosures.

Our risk management culture enables us to critically evaluate risks to our business and identify opportunities to create value for our employees, customers and shareholders. Our commitment to sustainability is reflected in our risk management practices as we strive to build a better world.

 


Political Contributions

We advocate for policies, agreements, legislation and regulations that enable us to help our customers build a better, more sustainable world.

Where allowable by law, Caterpillar may make corporate contributions to campaigns, individual candidates or political committees to support public policies we believe will promote our business interests. Any political contributions by Caterpillar must be approved by our vice president of Global Government & Corporate Affairs. In addition, the board annually reviews the company’s political spending policy and its political activities including corporate political contributions, political contribution activities of the Caterpillar Political Action Committee (CATPAC), trade association participation and Caterpillar’s significant lobbying priorities.

CATPAC contributions are made only in U.S. federal and state elections. CATPAC is funded through voluntary contributions by eligible individuals. A steering committee comprised of Caterpillar non-officer employees representing a diverse mix of U.S. locations and business units oversees all CATPAC disbursements to ensure they promote the company’s business interests.

Caterpillar also maintains memberships in trade associations and business groups that may advocate on behalf of business community segments. We are committed to supporting these organizations, as they champion public policies that contribute to the business community’s growth and success.

Additional information regarding Caterpillar’s corporate contributions, CATPAC contributions and trade association memberships is available on our political engagement website.