Harley-Davidson Inc. is an American motorcycle manufacturer that was

founded in Milwaukee, Wisconsin in 1901 by William S. Harley and Arthur Davidson.

By 1905, motorcycles were in production and the first Harley-Davidson dealership

was opened in Chicago by dealer Carl. H Lang. Lang sold three bikes from the dozen

built in the Davidson backyard shed. In 1906, Harley and Davidson built their first

factory and fashioned 50 motorcycles that year. The factory location remains

Harley-Davidson’s corporate headquarters today. Harleys were used in World War I,

survived the Great Depression, and used again in World War II. In 1969, American

Machine and Foundry (AMF) bought the company, created an aerodynamic

production, and cut the workforce. These actions resulted in a labor strike which

resulted in low quality bikes. Harley-Davidson had a tarnished reputation until 1981,

when AMF sold the company to a group of thirteen investors, until finally becoming

a publically held company in 1986. Since the 1980’s, Harley has become an

American-icon and a brand to die for. Their logo is a popular tattoo and their

customers will wait as long as it takes for delivery of their products! This has made

them the envy of many retailers and manufacturers globally.

“Excellent Corporate Governance has been a long standing business practice at

Harley-Davidson, because it makes good business sense. Although the motorcycling

business is fun, we take corporate governance seriously. The Harley-Davidson

Board of Directors is composed of accomplished leaders from a range of industries

who meet regularly to review company objectives and plan for future growth. These

individuals draw on their diverse backgrounds and experiences. They are proud

Harley-Davidson enthusiasts, and they work to ensure that the decisions made by

Harley-Davidson promote fairness, financial transparency and accountability to all

our shareholders.” The role of management at Harley-Davidson is to provide

2 | P a g e

employees with the opportunity to grow and develop professionally. Managers have

a belief that people are their only long term competitive advantage. With a “culture

strong as iron and steel,” management encourages employee expansion, variety,

and leadership merit. According to CEO, Keith E. Wandell, top management is

accountable for forming a working environment that can provide continual learning.

Wandell is less focused on structure and policy and more on product excellence,

growth, and efficiency. Keith Wandell’s main concerns lie in treating dealers,

suppliers, and employees with integrity. Wandell, as the Harley-Davidson CEO and

the company live by their mission. Harley is always searching for ways to do things

better by focusing on the relationships between management and employees and

believes that it is because of these relationships that employees convey

commitment to the company.

3 | P a g e

HARLEY-DAVIDSON, INC.

CORPORATE GOVERNANCE POLICY

The Harley-Davidson Board of Directors (the “Board”) and management believe that the Company, in the interests of its stakeholders, should embrace corporate governance practices in keeping with our leadership position in our business and current legislation and rules.

Process:The Nominating and Corporate Governance Committee of the Board has been empowered by its charter to continuously review corporate governance practices of the Company and to make recommendations to the Board to assure the Company’s leadership in this area. The Nominating and Corporate Governance Committee reports its findings and recommendations to the Board for action.

Practices:The Company will maintain the following policies to continue its leadership in the corporate governance area:

Board Independence. A majority of the Board will be comprised of independent directors. These directors must meet the independence and other requirements of the New York Stock Exchange (“NYSE”) and other applicable laws, regulations and rules.

Committee Independence. The Audit Committee, Human Resources Committee and the Nominating and Corporate Governance Committee must be comprised entirely of independent directors. All committee members must meet the independence and other requirements of the NYSE and applicable laws, regulations and rules.

Committee Structure. The Board will maintain four committees: a Nominating and Corporate Governance Committee, a Human Resources Committee, an Audit Committee and a Sustainability Committee. The Board will maintain a written charter for each committee that will state such committee’s duties and responsibilities.

Committee Operation. Each committee chair, in consultation with respective members of his or her committee, will determine the frequency and length of their committee meetings, as well as any additional agenda items.

Board Structure. The Nominating and Corporate Governance Committee will review and make recommendations on the size of the Board, the frequency of its meetings and the operation of the Board, including director qualifications. The By-Laws contain additional provisions relating to director tenure, which the Nominating and Corporate Governance Committee administers, including director retirement following a director’s 72nd birthday (except as the Board

4 | P a g e

may otherwise approve in advance of such election), the required submission of a director’s resignation upon a substantial change of the director’s employment, occupation or affiliation or if any conflict of interest develops or based on votes withheld in an election of directors.

Election of a Presiding Director. A Presiding Director will be elected by the Nominating and Corporate Governance Committee when the Chairman is not independent. The Presiding Director will serve for a one year term, unless the Nominating and Corporate Governance Committee, in its discretion, sets a longer or shorter term. The term of the Presiding Director will automatically expire upon the appointment by the Board of a Chairman who is an independent director.

Role of the Presiding Director. The primary roles of the Presiding Director are to assist the Chairman in managing the governance of the Board of Directors and to serve as a liaison between the Chairman and other directors. The Presiding Director will: (i) preside at all meetings of the Board at which the Chairman is not present, including all executive sessions of the non-management and/or independent directors; (ii) have the authority to call meetings of the non-management and/or independent directors; and (iii) serve as a contact for interested parties who wish to communicate with non-management directors. If the Company does not have a Presiding Director, but instead has a Chairman who is an independent director, the responsibilities of the Presiding Director set forth above will be performed by the independent Chairman.

Board Meeting Calendar, Agendas and Materials. With input from the Presiding Director, the Chairman of the Board will establish the annual Board calendar and meeting dates establish agenda items and schedules for each Board meeting and determine the materials and information to be presented to the Board. Agenda items to be considered by the Board at each of its meetings will be included in the Board materials distributed in advance to Board members. At each Board meeting, there will be an executive session of the Board with only non-management directors present.

Board Orientation. An orientation program will be provided for each new director to acquaint the director with the business, the financial picture, compliance policies, corporate governance and other policies relevant to directors.

Continuing Education. Directors are encouraged to continue educating themselves with respect to various matters, including by way of example, accounting and finance. If directors choose to attain such education by a third party provider, the Company will bear the cost of a director’s attendance at one continuing education course annually.

Officer and Director Compensation and Equity Ownership. The Human Resources Committee annually will review the compensation of the Chief Executive Officer of the Company (“CEO”) and the Nominating and Corporate Governance Committee will review and approve the CEO’s total compensation as recommended by the Human Resources Committee and will also periodically review the compensation of directors. The Human Resources Committee annually will review and approve the total compensation of the executive officers. The Board, upon the recommendation of the Human Resources Committee as to executive officers and senior leaders and the Nominating and Corporate Governance Committee as to directors will

5 | P a g e

approve Stock Ownership Guidelines for directors and executive officers and senior leaders. A director who is also an officer of the Company and an employee of the Company does not receive additional compensation for serving on the Board.

Director Access to Management and Independent Advisors. Directors will have access to senior management of the Company. The Company also maintains an environment that permits senior management to contact directors. The Board encourages the CEO to involve in Board presentations, where appropriate, senior management or other employees who can provide expertise on and insight into the matters being discussed by the Board. Directors are authorized to consult with independent advisors, as necessary and appropriate, with or without consulting senior management.

Certain Responsibilities. Each director is expected to attend meetings of the Board of Directors and any Board committee(s) of which he or she is a member and to review all meeting materials circulated prior to each meeting. Unless a director has a conflict in his or her schedule, all directors are expected to attend the annual meeting of shareholders.

Management Succession. The Nominating and Corporate Governance Committee will establish goals and objectives with the CEO and evaluate at least annually the performance of the current CEO in light of these goals and objectives. The Nominating and Corporate Governance Committee will also review the Company’s management overall to develop a CEO succession plan for recommendation to the Board.

Annual Performance Evaluation of the Board. The Nominating and Corporate Governance Committee will manage the annual Board and Board committee evaluation process.

6 | P a g e

Board of Directors:- Board consists of twelve directors- Barry K. Allen: Senior Advisor to Providence Equity Partners President, Allen Enterprises, LLC- John Anderson: Former President and Chief Executive Officer, Levi Strauss & Co.- Richard I. Beattie: Chairman of Simpson Thacher & Bartlett LLP- Martha F. Brooks: Former President and COO, Novelis Inc.- George H. Conrades: Chairman, Akamai Technologies, Inc.- Donald A. James: Co-founder, equity owner and Chairman and Chief Executive Officer of Deeley Harley-Davidson Canada/Fred Deeley Imports Ltd.- Sara L. Levinson: Former Non-Executive Chairman of ClubMom, Inc.- Thomas Linebarger: Chairman and Chief Executive Officer, Cummins, Inc.- George L. Miles, Jr.: Executive Chair, Chester Engineers, Inc.- James A. Norling: Chairman of the Board, GlobalFoundries Inc.-Keith E. Wandell: Chairman, President & CEO, Harley-Davidson, Inc.-Jochen Zeitz: Chairman of PUMA

CEO of PPR Sport & Lifestyle Group and CSO of PPR

7 | P a g e

“Owning and operating a Harley-Davidson® dealership is the most unique

business opportunity in the world. The dealership sells products and services to

enthusiasts to make their journey even more enjoyable. Each area of the dealership

is a component of a well-run, profitable dealership. Many dealerships also have

Harley-Davidson® Authorized Rentals and Rider's Edge Training.” Harley-

Davidson’s motorcycles are sold through a network of 1,605 dealers internationally

and circulation consists of about 600 independently owned dealerships. Roughly

75% of the dealerships sell Harleys exclusively. All dealerships own 54% of the

market share in the US; the dealers are considered business partners and work

closely with corporate in developing programs, monetary enhancement, applying

support, and administration authority.

8 | P a g e

My conclusion to the case of whether Harley-Davidson, Inc. is centralized or

decentralized is this: both centralization and decentralization are seen throughout

the company. Through my research, I’ve learned that it is at the highest levels of

the company (i.e.: top management) where centralization is enforced and the

company decentralizes as it goes further down the employee class. "Harley-

Davidsons decision-making authority is decentralized into three standing

committees totaling twenty-five executives, known internally as ‘the circles of

leadership.’ They manage the company around issues of customers, production,

and corporate support. Each group reports directly to the CEO. Successful

implementation of this program occurs when there are commitment at all levels of

organization. Top management must not only direct but take direction from the

lower level employees. In order for top management to feel comfortable with this

they must encourage education for employees of the company objectives and

develop a trust that employees will make the right decisions." (Source:

http://www.customessaymeister.com/customessays/Business/18573.htm)

“Throughout the world, Harley-Davidson unites people deeply, passionately and

authentically. From town to town and country to country, HD’s ideals of freedom

and self expression transcend cultures, gender and age. With both global

significance and local relevance, it’s no surprise that Harley-Davidson ranks as one

of the strongest brands in the world. Being recognized as an iconic brand is

gratifying, but igniting the fire within people on the many roads of the world is what

9 | P a g e

we are all about” Harley-Davidson, Inc. holds tight to their relationships throughout

the company in addition to dealers, investors, and most importantly; the customers.

These relationships are the key to their success and will continue to help the

company meet their objectives/goals and fulfill their mission. In addition, HD’s

business strategies (i.e.: corporate governance) are the lock to the key of success.

Their way of operating the company is what has unlocked the door to being number

one! They have taken a dream that started in a tiny wood shed over a hundred

years ago, and turned it into something too big for words. Harley-Davidson occupies

an enviable position in the business world: Demand for its products significantly

exceeds the available supply, and profits (along with stock prices) have been sky

rocketing. Harley won’t leave customer left wanting, though and have proven

triumphant in satisfying the appetite of enthusiasts. This truly is admiring and

should be recognized from competitors as a way to strive in the market. I can only

wish, as a hopeful future entrepreneur, that I can run my business as lucratively as

Harley-Davidson, Inc.

(Main Source: Harley-Davidson.com)

10 | P a g e