2010 Sustainability Report - Cummins.com

Cummins Board of Directors
Cummins is governed by a nine-member Board of
Directors. Seven of the nine directors are independent
of the Company. Cummins Chairman and CEO
Tim Solso and President and Chief Operating Officer
Tom Linebarger are the only Cummins employees
on the Board. Each Board Director must stand for
election annually.
In 2010, Robert Darnall, retired Chairman and CEO
of Inland Steel Industries, retired from the Cummins
Board after serving for 21 years. The Board welcomed
a new member, Dr. Franklin Chang-Diaz, Founder,
Chairman and CEO of Ad Astra Rocket Company
and former NASA astronaut. (To learn more about
Dr. Chang-Diaz, go to page 56)
About the Board
The Board of Directors represents and protects the
interests of the Company’s stakeholders. The Board
has the legal responsibility for overseeing the affairs
of the Company, including:
Adopting corporate governance principles consistent
with the Company’s Vision, Mission and Values.
Exercising sound and independent business
judgment with respect to significant strategic
and operational issues.
Advising senior management.
The board monitors:
The performance of the Company.
Cummins Board of Directors has six standing committees:
Executive Committee
Audit Committee
Compensation Committee
Governance and Nominating Committee
Finance Committee
Safety, Environment and Technology Committee
The Company complies with all New York Stock
Exchange and regulatory requirements concerning
the membership of certain committees.
Internal Audit
Cummins’ Internal Audit department provides
the Board of Directors and management with
independent, objective information on the
performance of the Company’s control environment.
The Executive Director – Internal Audit reports to the
Audit Committee of the Board of Directors. In 2009,
Internal Audit published 94 audit reports and memos.
Internal Audit has a formal follow-up process to
ensure management has addressed identified risks
and implemented corrective action. A business unit
leader must present a corrective action plan directly
to the Audit Committee of the Board of Directors
when a function or business receives an
“Unacceptable” audit grade.
The performance of senior management.
The effectiveness of internal controls and
risk management practices.
Compliance with all applicable laws and regulations.
Communications and relationships with stakeholders.
54 Cummins Inc. Sustainability Report 2010