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CATERPILLAR INC. 2013 YEAR IN REVIEW
43
CONSTRUCTION INDUSTRIES
Feature Story
Headline
LAW AND PUBLIC POLICY
Sustaining a World-Class
Ethics and Compliance Culture
Today, Caterpillar operates in an unprecedented global regulatory
enforcement environment. The compliance expectations of government
regulators, investors and Caterpillar’s Board of Directors have never
been higher. We embrace those high expectations and are committed
to continuous improvement as we work to strengthen a world-class
ethics and compliance culture.
Our global footprint, key markets, growth strategy and business model
put the need for a robust and effective compliance program at the fore-
front of our operations. If a violation were to occur, the resulting cost,
reputational harm and destruction of shareholder value cannot be over-
stated. Many multinational corporations are dedicating tremendous
resources to compliance, but many have done so only after suffering
the devastating consequences of an avoidable compliance event.
Caterpillar’s objective is to be proactive and aggressively get in front of
this expanding risk. Processes and procedures are designed to ensure we
have an organization that operates in accordance with internal controls,
within the law and on the fi rm foundation of Our Values in Action. It adds
up to a company we can all be proud of and one that our employees,
stockholders and customers can rely upon.
Caterpillar’s compliance transformation began several years ago. We
built and continue to invest in an Ethics & Compliance Program with
a focus on compliance assurance. Enterprise risk owners for each
of 16 compliance risk areas have defi ned policies, procedures, tools
and a compliance audit program designed to drive accountability for
compliance at all levels of the enterprise. As a part of Caterpillar’s
Anti-bribery Compliance Program, we have implemented a risk-based
approach and common processes to mitigate bribery risk. Policies
and procedures are in place to review third parties with whom we do
business and to evaluate requests for travel, gifts and entertainment
for government offi cials.
We recognize that acquisitions can potentially introduce new risks.
Caterpillar conducts risk-based due diligence on potential acquisitions,
and we carefully integrate acquired companies into our processes. In
addition, independent investigation and compliance audit processes
have been designed and executed. Training for the general employee
population also has been enhanced, and thousands of employees
in high-risk job functions receive additional training each year. The
program is a virtuous circle of continuous improvement that mitigates
compliance risks for Caterpillar around the globe.