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

Cummins Board of Directors
GOVERNANCE & RISK
Cummins is governed by a nine-member
Board of Directors. Eight of the nine
directors are independent of the
Company. Cummins Chairman and
CEO Tom Linebarger is the only Cummins
employee on the board. Each Director
must stand for election annually.
The board represents and protects
the interests of Cummins’ stakeholders.
The board has the legal responsibility for
overseeing the affairs of the Company,
exercising sound and independent business
judgment regarding significant, strategic
and operational issues. The board also
advises senior management and adopts
governance principles consistent with
Cummins’ Vision, Mission and Values.
The board takes an active role in fulfilling
these responsibilities. Directors traveled
to China, for example, in the fall of 2011
to see the Company’s facilities there,
meet with key Company personnel as
well as customers and review strategy.
The board monitors a number of issues:
»»
The performance of the Company.
»»
The performance of senior management.
»»
Compliance with all applicable laws
and regulations.
»»
Communications and relationships
with stakeholders.
»»
The effectiveness of internal controls
and risk management practices.
COMMITTEES
Cummins Board of Directors
has six standing committees:
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Compensation Committee
»»
Governance and Nominating Committee
»»
Audit Committee
»»
Finance Committee
»»
Safety, Environment and
Technology Committee
»»
Executive 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 and senior leaders
with objective and independent information
on the performance of the Company’s
control environment.
The Vice President – Internal Audit reports
to the Audit Committee of the Board of
Directors. In 2011, the Internal Audit Group
published 144 audit reports and memos.
To ensure management has addressed
identified risks and implemented corrective
action, Internal Audit has a formal
follow-up process.
The responsible business or functional
leader must present a corrective action
plan to the Audit Committee of the Board
of Directors when a function or business
receives an “Unacceptable” audit grade.
ROBERT J. BERNHARD
Vice President for Research
and a professor of Engineering
at the University of Notre Dame.
He joined the board in 2008.
FRANKLIN Chang Diaz
Chairman and CEO of the Ad
Astra Rocket Company, a U.S.
spaceflight engineering company
based in Houston, Texas.
He joined the board in 2009.
STEPHEN B. DOBBS
Senior Group President at Fluor
Corporation, a Fortune 500
company that offers engineering,
procurement, construction,
maintenance, and project
management services.
He joined the board in 2010.
ROBERT K. HERDMAN
Managing Director of
Kalorama Partners, LLC,
a Washington, D.C. - based
consulting firm. He joined
the board in 2008.
ALEXIS M. HERMAN
Chairman and CEO of New
Ventures, LLC, a corporate
consulting company. She joined
the board in 2001 and currently
serves as Lead Director.
WILLIAM I. MILLER
President of the New York-based
Wallace Foundation focused on
K-12 education and the arts.
He joined the board in 1989.
96 SUSTAINABILITY REPORT 2011–2012 SUSTAINABILITY REPORT 2011–2012 97
GEORGIA R. NELSON
President and CEO of PTI
Resources, LLC, an independent
consulting firm. She joined the
board in 2004.
CARL WARE
Retired Coca-Cola Executive
and President and COO,
Ware Investment Properties LLC.
He joined the board in 2004.
N. THOMAS LINEBARGER
Chairman and CEO of
Cummins Inc. since January
2012. Previously, President
and Chief Operating Officer.
He joined the board in 2009.
GOVERNANCE & RISK