Supervisory Board Report

Report from the committees

In order to perform our tasks in an efficient manner, we have five Supervisory Board standing committees. We also established the project-related “Strategic Equity Investment Committee” ad hoc see Supervisory Board. The standing committees prepare specific topics and resolutions to be dealt with by the Supervisory Board as a whole. In individual cases, we have delegated decision-making powers to these committees. At our Supervisory Board meetings, the chairmen of the committees always reported to us in detail on the committees’ work and meetings, ensuring complete exchange of information and good cooperation between the committees and the Supervisory Board as a whole.

The committees’ work in the year under review is summarised as follows:

— The Steering Committee, which is authorised to pass resolutions on behalf of the Supervisory Board in particularly urgent cases, met twice in the year under review. In October 2008, the Steering Committee approved the acquisition of Ashworth, Inc. This makes TaylorMade-adidas Golf the world’s leading golf apparel company. In November 2008, after discussing in detail the potential impact of the global economic and financial crisis on the 2009 budget, the Steering Committee granted its final authorisation of the budget and investment plan for 2009.

— The General Committee met three times in 2008. The main topics were the system and level of Executive Board compensation as well as the preparation of new structures for Executive Board employment contracts.

— The Audit Committee met five times in 2008. The auditor and the Chief Financial Officer were always in attendance. Committee members examined in detail the consolidated financial statements and the adidas AG annual financial statements for 2007, the auditor’s reports as well as the first half year report and quarterly financial reports for 2008. The auditor reported to the committee members in detail on its auditing activities and results. Further more, the Audit Committee prepared the Supervisory Board proposal for the Annual General Meeting recommending the appointment of the auditor for 2008 and obtained the auditor’s declaration of independence. Together with the auditor, the Audit Committee also established the priority topics for the audit of the consolidated financial statements and the adidas AG annual financial statements for 2008 and resolved upon the audit assignment including the auditor’s fee. In addition, the Audit Committee prepared the decisions of the Supervisory Board relating to corporate governance topics, in particular the Supervisory Board’s decision concerning the declaration on the German Corporate Governance Code pursuant to § 161 of the German Stock Corporation Act (Aktiengesetz – AktG). Together with the Chief Financial Officer, the Audit Committee discussed in detail the budget and investment planning for 2009, taking into account the economic and financial crisis. Furthermore, the committee dealt intensively with the structures of compliance management as well as the internal control and risk management systems and the effectiveness of these systems. The Audit Committee also reviewed the Internal Audit report on its auditing activities within the Group and the methodology in 2008 as well as plans for 2009. The Audit Committee Chairman always reported to the Supervisory Board on the results of all its committee meetings at the sub sequent meeting of the entire Supervisory Board.

— The Nomination Committee established in May 2008 met for the first time in November. In addition to organisational aspects of its future work, the committee discussed the current composition of the Supervisory Board and defined requirements for the future composition of the shareholders’ representatives with regard to the required competencies and qualifications. At the beginning of 2009, the committee prepared the proposals for the election of the shareholders’ representatives to be made to the Annual General Meeting of adidas AG on May 7, 2009.

— The Mediation Committee again had no reason to meet in 2008. 

— In August 2008, the Strategic Equity Investment Committee established ad hoc granted its approval to the acquisition of Textronics, Inc. with a view to the further development of the Group’s product offering.

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