CNH Industrial believes that a robust Corporate Governance model is essential to effectively manage the interests of all its stakeholders, as emerged from the materiality analysis (see also page 19). The Company’s Governance model for sustainability issues originated within Fiat Industrial, which, in turn, inherited the Governance model adopted by Fiat S.p.A. prior to the demerger, effective January 1, 2011, of automobile operations from the capital goods operations (Agricultural Equipment, Construction Equipment, Commercial Vehicles, and Powertrain) that now form the scope of CNH Industrial.
The central pillars of CNH Industrial’s Governance model include: compliance with applicable legal requirements; ongoing alignment with international best practice and the Dutch Corporate Governance Code; a clear and comprehensive Code of Conduct, with policies for implementing the principles established within this Code; and an advanced risk management system.
As emerged during the 2014 stakeholder engagement (see also page 19), sustainability governance, policy and management need to be embedded in the corporate system and in company operations, going beyond existing rules and regulations and creating added value. Socially Responsible Investors (SRIs) have a particular interest in this aspect, as do the sustainability rating agencies. For investors and analysts, a governance model that attaches sufficient importance to sustainability issues promotes a long-term corporate outlook and contributes to riskadjusted returns. A robust Governance model ensures that the Company’s performance is not due to chance or random behavior and that continuous improvement is possible, based on analysis and results achieved each year.
Above all, it ensures that risk management controls are in place to safeguard the value of investments.
Specifically, in EMEA, stronger demands for transparency from governments and regulators in non-financial information highlights the importance of integrating governance and sustainability factors.