Cummins Inc. | Independent board chairman at Cummins Inc.

Status
43.36% votes in favour
AGM date
Previous AGM date
Proposal number
17
Resolution details
Company ticker
CMI:US
Lead filer
Individual
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • CEO / chair duality
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO.
Whereas clause
Whenever possible, the Chairman of the Board shall be an Independent Director.
The Board has the discretion to select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board is seeking an Independent Chairman of the Board on an expedited basis.

Although it is a best practice to adopt this policy soon this policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition.
The roles of Chairman and CEO are fundamentally different and should be held by 2 directors, a CEO and a Chairman who is completely independent of the CEO and our company. The job of the CEO is to manage the company. The job of the Chairman is to oversee the CEO and management.
Supporting statement
A Lead Director is no substitute for an independent Board Chairman. The Cummins Lead Director list of duties allow for these conclusions:
•
Conferr and approve Board meeting agendas but approval restricted to making sure there is enough time.
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•
Chairs certain Board meetings and gives feedback that can be ignored.
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•
Leads the annual performance reviews of the CEO and the Board which the lead director may already do as Chair of the Nominating Committee.
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• Ensure that there is open communication between independent Directors and the Chairman and other management members, a task which employees and other directors may also do.
• Look at information sent to the Board.
• Confer with the Chair on issues of corporate importance, but only as appropriate whatever appropriate means.
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Since 2013 support for this proposal topic at Cummins increased from 30% to 37%.
Plus management fails to give shareholders enough information on this topic to make a more informed decision. There is no management comparison of the exclusive powers of the Office of the Chairman and the de minimis exclusive powers of the Lead Director.

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