Compliance with Dutch Corporate Governance Code

While CNH Industrial endorses the principles and best practice provisions of the Dutch Corporate Governance Code, its current corporate governance structure deviates from the following best practice provisions, only with respect to minor aspects as follow:

  • CNH Industrial deviates from the terms of paragraph III.1.7, which requires that the board will evaluate its own performance and the performance of committees of the board. In 2014 the Company did not conduct such an evaluation but plans to do so in 2015; 
  • CNH Industrial deviates from the terms of paragraph III.2.1, which requires that all non-executive members of the Board of Directors, with the exception of not more than one, shall be independent, as two out of nine non-executive members of the Board of Directors do not qualify as non-independent Directors within the meaning of the Dutch Corporate Governance Code;
  • CNH Industrial deviates from the terms of paragraphs III.3.3 and III.6.2, which require that a Board member may not take part in any discussion or decision-making that involves a subject or transaction in relation to which he or she may appear to have a conflict of interest with CNH Industrial, as the definition of conflict of interest set forth in the Board Regulations of CNH Industrial is geared towards an actual conflict of interest, as referred to in the Dutch Civil Code, and does not include the reference to the appearance of a conflict of interest. Nevertheless, the CNH Industrial Board Regulations stipulate that the Board of Directors as a whole may, on an ad hoc basis, resolve that there is such a strong appearance of a conflict of interest of an individual Director in relation to a specific matter, that it is deemed in the best interests of a proper decision making process that such individual Director be recused from participation in the decision making process with respect to such matter even though such Director may not have an actual conflict of interest; 
  • CNH Industrial deviates from the terms of paragraph III.5.1, which requires that the terms of reference of the various committees may provide that a maximum of one member of each committee may not be independent, as the terms of reference of the Governance and Sustainability Committee state that a maximum of two members of that committee may not be independent and the composition of the Governance and Sustainability Committee is such that two out of the three members do not qualify as independent; and 
  • CNH Industrial deviates from the terms of paragraph III.5.11, which requires that the Compensation Committee may not be chaired by a member of the management Board of another listed company. The composition of the Compensation Committee is such that its chairman is also an executive Director of the Board of Directors of other listed companies (although such other listed companies do not operate in the industries in which the Company operates).