Code of Ethics

Caterpillar, Inc. has a very comprehensive and detailed Code of Ethics.  It was first published in 1974 and defines what they stand for and believe in as a company.  The Code of Ethics documents the high ethical standards that Caterpillar has held since their founding in 1925.  It also acts as a guide for the employees of Caterpillar to put the values and principles, described in the Code of Ethics, in to action.  It goes into great detail about the core values of the company, which are: Integrity, Excellence, Teamwork, and Commitment.  The Code of Ethics is 35 pages long and includes topics such as interactions with distributors, laws in which the company complies with in their worldwide activities, and how each employee is personally responsible for enhancing the stockholder value.  It also goes into topics like conflicts of interest, whistle-blowing, and the responsibility of the leaders to set an example and "live by the code."  The Code of Ethics has played a large role in the ethical success that Caterpillar has had.  They have been able to be a socially responsible organization and will continue to do so in the future because of their detailed Code of Ethics.

                                                 

Organizational Structure

Caterpillar, Inc. utilizes a matrix structure within their corporation.  They implemented this strategy in the mid-1990s in an effort to organize their product groups and geographical units.  The product managers at Caterpillar are responsible for the development, manufacturing, and distribution of their respective product line.  The managers of the geographical regions are responsible for the profitability of the businesses in their region.  For example, Caterpillar has some manufacturing plants in Asia.  The product managers are responsible for the product being developed, manufactured, and distributed properly, while the manager of the geographical region is responsible for the manufacturing plants in Asia being profitable.  The matrix organizational structure is a combination of the functional and divisional structures that tries to overcome the inherent inadequacies that the other structures have.  It is a structure that has allowed Caterpillar to become a thriving multinational company.
                                  

Corporate Governance

Caterpillar, Inc. has a corporate governance program that ensures that they serve the interests of stockholders and other shareholders with the highest standards of responsibility, integrity and compliance with all laws.  At Caterpillar, they strive to make their governance standards and principles transparent.  The standards are guided by the Board of Directors and the Global Management Team.  It was first published in 1974 and has been amended many times over the years in an effort to set a high standard for honesty and ethical behavior by their employees.  They have also set a policy where the Board of Directors is fully independent, except for the Chairman, and they even have a compensation committee that is fully independent, as well.  In order to avoid certain unethical acts, Caterpillar has a fully independent Audit Committee that has a financial expert as its Chairman.  At Caterpillar, they are making great strides to do the right thing and that is evident in their corporate governance.