ABOUT THIS REPORT The information in this report is ... - Cummins

“Acting in accordance
Governance
with our Code of Business
by the Numbers
Conduct is the responsibility
made in good faith. Where permitted by
ETHICS CERTIFICATION PROCESS
By the end of 2011, Cummins had sent
GOVERNANCE & RISK
of every employee at
Cummins and the creation
of this new ethics and
compliance organization
does not change the
primary accountability
each of us has to live
Cummins’ values in every
aspect of our work.”
Tom Linebarger
Chairman and CEO
ETHICS VIOLATIONS, REPORTING
AND INVESTIGATIONS
Any effective governance and ethics
program must have a mechanism to
ensure ethical codes are enforced.
Employees at all levels at Cummins are
frequently reminded that they have an
obligation to report suspected violations
of Cummins’ Code of Business Conduct.
local law, employees can report potential
violations anonymously.
Cummins has a team of Master
Investigators who respond to reports
of violations to the Company’s Code
of Business Conduct and make sure
an appropriate action is taken in a
timely manner. The Company has Master
Investigators in most regions of the world.
In 2011, Cummins investigated 1,076 code
of conduct-related complaints compared to
814 in 2010. Forty-seven percent of those
complaints came from outside the United
States, and 24 percent of all complaints
were reported anonymously.
Of those cases investigated in 2011,
53 percent were substantiated and
38 percent of those substantiated
cases resulted in employee terminations.
Reports of unprofessional behavior and
those grouped into the category of
Human Relations accounted for the
most Code of Business Conduct cases.
Each year, employees certify their
compliance with the Company’s Code
of Business Conduct and underlying
policies and report any exceptions to
Cummins policy.
In 2011, 17,909 employees and officers –
up from 15,266 in 2010 – completed
their annual Ethics Certification including
all members of the Board of Directors.
Internal Audit and Cummins Law
Department reviewed all exceptions
to ensure they were documented and
investigated, according to Company policy.
SUPPLIER CODE OF CONDUCT
Cummins holds suppliers to a higher
standard than just compliance with local
laws. That’s why the Company’s Supplier
Code of Conduct has been translated
into more than a dozen languages.
The code includes provisions banning
child or forced labor, respecting employee
rights and providing a safe workplace
its code to the Company’s top suppliers
who collectively received 80 percent of
Cummins’ total spending. All reported
they were in compliance.
JOINT VENTURE RELATIONSHIPS
By doing business through alliances with
partners and joint venture agreements,
Cummins can increase market penetration
around the world, streamline supply chain
management, expand product lines and
develop new technologies.
The Company takes appropriate steps to
ensure these business relationships share
Cummins values regardless of whether
the Company directly manages these
alliances and joint ventures. Cummins
screens potential partners carefully and
only initiates a joint venture with partners
whom Company leaders know and trust.
Cummins strives to ensure its values
are part of joint venture agreements and
operations by making values important to
Cummins a part of negotiations, and by
1,076
Number of Code of Conduct
cases around the world
investigated by Cummins
53
Percentage of those
cases substantiated
13
Average number of days
to close Code of Conduct
cases in 2011, down
from 15 in 2010
4,166
Cummins’ suppliers reporting
to be in compliance with the
Company’s Supplier Code
of Conduct. They represent
the top 80 percent of
GOVERNANCE & RISK
They can do that in a number of ways,
including telling a supervisor, reporting it
on-line at ethics.cummins.com or by calling
the Cummins Ethics Help Line (the number
varies by country but in the United States
at 1-800-671-9600). All reports are
investigated and violations at any level
of the Company are acted on swiftly
and appropriately.
The Company also ensures that no
one’s career can be negatively affected
by reporting suspected code violations
The Company averaged 13 days to close
cases in 2011, down from 15 days in 2010.
Cummins’ senior leaders closely
monitor reported violations and approve
corrective actions. Each quarter, business
unit leaders receive an update on reports
in their region or business. Chairman and
CEO Tom Linebarger also receives updates
and an annual update is reviewed by the
Audit Committee of the Cummins
Board of Directors.
for employees.
The Company wants to do business
with suppliers that share its passion
for sustainable practices and policies.
ensuring Cummins employees are included
on joint venture boards of directors.
Cummins largest suppliers
17,909
Employees and officers
who completed their
Ethics Certification at
Cummins in 2011
500
Distribution Business Unit
locations that will need
Business Continuity Plans
by the end of 2014
94 SUSTAINABILITY REPORT 2011–2012 SUSTAINABILITY REPORT 2011–2012 95