Improving Health, Inspiring Action: A Corporate Governance Report for Employees

The assignment content describes the corporate governance and environmental performance of a company, specifically Adidas Group. The report highlights the importance of transparency in maintaining shareholder value, employee engagement, and financial markets' confidence. The company follows a dual board system with executive and supervisory boards. The report also discusses environmental initiatives such as a comprehensive strategy for eco-friendly operations, monitoring of environmental issues, and community involvement.

Running head: CORPORATE SOCIAL RESPONSIBILITY
ADIDAS
Corporate Social Responsibility
Student Name:
Course work:
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CORPORATE SOCIAL RESPONSIBILITY 1
Table of Contents
Introduction......................................................................................................................................2
Economic performance....................................................................................................................2
Social performance..........................................................................................................................3
Environmental performance............................................................................................................5
Conclusion.......................................................................................................................................5
Reference.........................................................................................................................................7

CORPORATE SOCIAL RESPONSIBILITY 2
Introduction
In this present paper, we will discuss the economic, social, and environmental performance of
Adidas. The corporate governance is responsible for maintaining a transparent management and
corporate control oriented towards a sustainable increment in the value. The goods corporate
governance leads to the sustainable corporate success and enhances the confidence of
shareholders.
Adidas is the German multinational corporation which mainly manufactures and design clothing,
accessories, and sports shoes. Its head quarter is in Bavaria. It is the second largest manufacturer
of sportswear across the world. Adidas group is the holding company which consists of Taylor
made Adidas Golf Company, Reebok Sportswear Company, FC Bayern Munich and Runtastic
technology. The company was registered on 18Augist 1949 by Adolf Dassler. The company is
following multi-brand and concentric consumer strategy in which the brand is manufacturing
goods according to the need of the consumers. The company has the distinct history with the
strong connection with the sports. The company is producing best innovative products with the
worlds. The targeting consumers are sports participants at the top level which is inspired by
sport. The main objective of the company is to produce best sport performance products for all
the sports. The company is committed towards the manufacturing of sports assets.
Economic performance
The economic performance is defined as the assessment of the company in through comparative
analysis of two years. The economic performance indicates the right financial track of the
company. The following table shows the comparative analysis of 2014-2015:

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General financial information 2013 2014
A.
Total Assets 11,599 12,417
Total liabilities 11,599 12,417
Total Owners equity 5481 5618
B.
Profit earned per share 4.01 2.72
C.
Total ordinary share
issued
209,216,186 204,327,044
D.
Profit received by shareholders
per share
2,489 2,051
E.
Net cash flows from operating
activities
634 701
F.
Net cash flows from investing
activities
243 537
The net income attributed to shareholders has decreased from 490 Million Euro to 787 Million
Euro. The total shareholder's profit has decreased by 32%. The basic earning per share has
decreased from 2013 to 2014 by 27%. The total assets comprise of cash and cash equivalents,

CORPORATE SOCIAL RESPONSIBILITY 4
accounts receivables, inventories, fixed assets, and other assets. The cash and cash equivalent are
decreased from 13.7% to 13.6%. The accounts receivable is decreased from 15.7% to 15.6%.
The inventories are decreased from 22.7% to 20.3%. The fixed assets are decreased from 35.7%
to 35.0%. The other assets are decreased from 12.3% to 15.4% (Rudolph et al., 2016). The total
liabilities comprises of short-term borrowings, accounts payable, long-term borrowings, other
liability and total equity. The short-term borrowings are decreased from 5.9% to 2.3%. The
accounts payable is decreased from 15.7% to 13.7%. The long-term borrowings are increased
from 5.6% to 12.8%. The other liabilities are increased from 25.5% to 26.4%. The total equity is
decreased from 47.3% to 45.2%. The total assets are increased by 7% from 2013 to 2014. The
part of current and non-current assets within the total assets is changed from 59% to 41%.
The total current assets in 2014 are 7,347 and in 2014 are 6,857, so the total change is 7%
increasing in total assets (Annual report et al., 2014). There is a positive impact on cash and cash
equivalents. The cash and cash equivalents are increased by 6% because the net cash generated
from operating activities is partly offset. The group inventories are decreased by 6%. The
inventories from continuing financial assets are decreased by 88%. The short-term cash
investments are decreased. The group receivables are increased by 8%. The receivables are
increased by continue operating which is overall 10% increased. The current financial assets are
doubled from 2013 to 2014. The amount is increased by increased ion the fair value of financial
assets.
The other current assets decline by 16%. The amount is declined from 505 Million Euro to 425
Million Euro. The non-current assets areincreased by 7%, the amount in 2013 is 4,742 and in
2014 are 5,070. The financial assets comprise of goodwill, property, plant and equipment,
trademark, intangible assets and long-term financial assets. The goodwill is decreased by 3%

CORPORATE SOCIAL RESPONSIBILITY 5
from 1.169 Billion Euro to 1.1204 Billion Euro. The decreased is due to the impairment of 78
Million Euro. The other financial assets are increased by 40%. The total current liability is
decreased by 7% from 4.378 Billion to 4.732 Billion Euro. The operating working capital is
increased by 8% from 2.821 Billion to 2.618 Billion (Annual report et al., 2014).
The financial income of the company is decreased by 27% in the year 2014 due to decrease in
the interest income. The financial expenses of the company are decreased by 28% in the year
2014 from the previous year. The net income attributable of the company is decreased by 32%
which excludes the impairment of goodwill. The basic earnings per share are also decreased by
27% by continuing the operations in the year 2014. The total assets and liabilities of the
company are decreased by 7% in the year 2014. The operating cash flows of the company is
known as internal group management system, which is reduced by 36% in the year 2014 from
the previous year. The decrease in the operating cash flow is due to less operating profit and high
capital expenditure. The net sales of the company are increased by 10% in the year 2014 from
the previous year 2013. The other operating income is decreased by 44% in the year 2014 and
operating expenses are decreased by 20% in the year 201.
Social performance
The company is involved in social responsibilities towards the society. The company cooperates
with the charity organization to improve the quality of life by means of sport. The company
supports international humanitarian aid efforts such as commitments towards the projects related
to worldwide education and science and humanitarian initiatives. The employee also takes
participate in the various social programs across the globe. The funds of the company are used
for various charitable causes in different locations such as Albania, South Africa, Israel, Brazil,

CORPORATE SOCIAL RESPONSIBILITY 6
and Republic of the Congo, Hong Kong, Germany, Switzerland and many other countries where
the employees of the company took to participate in the various projects.
The company supports the children and teenager who had created their identities through sports
and conveyed the self-confidence, and team spirit. The new opportunities were built through the
roadmap created by them. The employees experience the achievement through sports through
volunteer work. The employees also learned to deal with the values, culture and life in the
various countries. The employee's motivation is enhanced through volunteers work, and it also
helps to create the spirit of teamwork, communication skills, and leadership. The information of
various projects is described on the official website of Adidas (Goswami et al., 2015). The
development of the company is framed with regard to the minimum social standards, work
safety, and environmental health protection. The production facilities of the company are
monitored, and the business partners are an integral part of the corporate policy of the company.
The company has the separate code of conduct for the supply chain which is the workplace
standard (Distelhorst et al., 2016). The standards are directed towards the convention of the
international labor organization. The code of conduct is followed by the world in of the sporting
goods industry. The working standards help in recruiting the business partners according to the
business practices requirements. The control and coordination of workplace standards are
managed by the expert team. The general approach of the company is to balance between the
need for the employees and shareholders expectations. The company is committed towards the
human rights which contribute to the economic success of the company.The sustainability
statement of the company states that it is imperative to adhering all the applicable guidelines,
laws and directives. The company is focusing on improving the performancein a sustainable
manner. The strategy of the company towards the people includes empowering people,

CORPORATE SOCIAL RESPONSIBILITY 7
improving health and inspirestheir action. The company is involving sin various social programs
through the participation of employees.
The goal of the company is to maintain the transparency among the financial analysts, business
partners, private shareholders, public interest and employees about the situation of the company.
The company publishes all the relevant information about the company such as ad hoc
announcement, notification of voting rights and others. The rights of the shareholders are
enjoyed by them in the Annual general meeting, and the shareholders are involved in all the
fundamental resolutions of the company. The shareholders also exercise the right to vote at the
Annual general meeting of the company. The compensation report of the company reflects the
principles of compensation system and the level of executive and supervisory board according to
the legal requirements and German corporate governance recommendations (Liern et al., 2017).
Environmental performance
The monitoring of corporate governance is done by the supervisory board regularly, and the
development is also looked after by them. The implementation and recommendation of the code
are also regulated by the supervisory board. The compensation caps are introduced by the
company which includes the potential special bonus for new executive board service contracts.
The company is adopting successful management which embraces the successful actions towards
the environmental and social responsibility for the present and future generation. The company
has the separate department, namely, social & environmental affair department which handles
the affairs related to the monitoring of rights of employees in the supply chain and the
coordinating of the environmental strategy and product safety management.

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The company has developed a comprehensive environmental strategy within the sustainability
program (Staudt et al., 2014). The objective of the strategy is to make environment eco-friendly
at every stage of the value chain in a most efficient and effective manner. The company owned
location is improved from every area, for example, logistics and IT system, development of
material and sourcing, designing of a product, and development and sourcing. The future
environmental performance of the company is improving through optimizing the processes. The
environmental strategy also concerns about the depletion of emission as another objective of the
strategy. The introduction of the uniform environmental management system is the key element
of the goals at companies owned location with ISO 14001 (Wong et al., 2016). The company is
operating worldwide, and the environmental approach of the company is developed in a
sustainable manner. The vision is to improve the environmental footprints which are embedded
in all the products, services, and processes of the company. The mission is to adopt the
leadership role in the management of environment which supports the performance of the
business. The company has taken various environmental initiatives in the past years. The team of
environmental strategy is led by Social and environmental affairs. The environmental approach
is to manage the environmental issues as an integral part of the daily routine.
Conclusion
The corporate governance report is responsible for the sustainable growth and increment of value
in an organization. It enhances the corporate confidence by the shareholders, employees,
business partner, and financial markets. The company is following the dual board system which
assigns the management, executive board and supervisory board of the company. The economic
performance of the company is done through comparative analysis of the financialstatement of

CORPORATE SOCIAL RESPONSIBILITY 9
the year 2013 and 2014. The total assets of the company are increased by 7.1%, and total equity
is decreased from 47.3% to 45.2%. The basic earnings per share are decreased from 4.01 to 2.72.
The total owners' equity decreased from 5,481 to 5,681. The net cash flows from operating
activities are increased from 634 to 701. The net cash flows from financing activities are
increased from 243 to 537. The Adidas group cooperates with the charity organizations which
help to improve the quality life by means of sport. The employees also participate in the social
programs worldwide. The employees get motivated through participating in the volunteers work
which helps to build the spirit of teamwork, leadership qualities and improvement in
communication skills. The minimum working standards are fixed by the company which helps in
recruiting the business partner according to the requirements of business practices. The
environmental performance of the company is managed SEA. It is monitored and regulated by
the supervisory board regularly. The company is taking environmental initiatives which help to
improve the environmental performance and integrate the environmental issue in the daily
operating routing of the business activities. The company publishes all the relevant information
which reflects the situation of the company. The compensation caps are introduces by the Adidas
group which includes the special bonus for new and extended executive board service contracts.
The department of social & environmental affairs monitors the rights of the employees in the
supply chain and coordination of environmental strategy within the organization.

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Reference
Annual Report. (2014). 1st ed. Adidas Group.
Distelhorst, G., Hainmueller, J. and Locke, R.M., 2016. Does Lean Improve Labor Standards?
Management and Social Performance in the Nike Supply Chain. Management Science.
Goswami, S. and Ha-Brookshire, J., 2015. From compliance to a growth strategy: Exploring
historical transformation of corporate sustainability. Journal of Global Responsibility, 6(2),
pp.246-261.
Liern, V., Pérez-Gladish, B. and Méndez-Rodríguez, P., 2017. Measuring Social Responsibility:
A Multicriteria Approach. In Multiple Criteria Decision Making (pp. 31-46). Springer
International Publishing.
Rudolph, M., 2016. A Financial Analysis of the Sportswear Company Adidas AG.
Staudt, S., Shao, C.Y., Dubinsky, A.J. and Wilson, P.H., 2014. Corporate Social Responsibility,
Perceived Customer Value, and Customer-Based Brand Equity: A Cross-National Comparison.
Journal of Strategic Innovation and Sustainability, 10(1), p.65.
Wong, C.W., Lai, K.H., Lun, Y.V. and Cheng, T.C.E., 2016. Organizational Capabilities. In
Environmental Management (pp. 109-125). Springer International Publishing.