Reebok 2009 Annual Report Download - page 39

TO OUR SHAREHOLDERS Declaration on Corporate Governance including the Corporate Governance Report 35
Furthermore, the Executive Board
must obtain the Supervisory Board’s
approval for the budget, including the
annual capital expenditure and finan-
cial plan. Details are set out in the
company’s Articles of Association and
the Rules of Procedure for the Super-
visory Board www.adidas-Group.com/
corporate_governance.
The Chairman of the Supervisory
Board coordinates the Supervisory
Board’s work and chairs the meetings.
Every year, he explains the work of the
Supervisory Board and its committees in
his report to the shareholders and at the
Annual General Meeting. The essential
duties of the Supervisory Board include
the approval of the financial statements
of adidas AG and the adidas Group, taking
into consideration the auditor’s reports.
Furthermore, the Supervisory Board is
responsible for decisions concerning the
appointment of members of the Executive
Board. The meetings of our Supervisory
Board are convened at least fourteen
days in advance, also indicating the items
on the agenda. The Supervisory Board
constitutes a quorum if all members
have been invited in due form and at least
six members participate in the taking of
the resolution. It passes its decisions by
resolutions requiring a simple majority,
unless a different majority is stipulated
by law. In the event that a vote results in
a tie, the Chairman of the Supervisory
Board has the casting vote if a new vote
again results in a tie.
For particularly urgent matters, the
Supervisory Board may also resolve on
issues by way of a written circular vote.
We report on the meetings and working
methods of the Supervisory Board in our
Supervisory Board Report see p. 28.
Every two years, the Supervisory
Board examines the efficiency of its work.
The next efficiency examination will be
carried out after the Annual General
Meeting in 2010.
Increased efficiency through Increased efficiency through
Supervisory Board committees Supervisory Board committees
In order to perform its tasks in the most
efficient manner, our Supervisory Board
has formed five permanent expert com-
mittees see Rules of Procedure for the
Supervisory Board www.adidas-Group.com/
corporate_governance. For the organisation
and working methods of the committees
the same rules are applicable in principle
as for the entire Supervisory Board. A
committee constitutes a quorum if half
of its members, but no less than three
members, participate in the passing of
the resolutions. The chairmen of the
committees report to the entire Super-
visory Board on a regular basis. The com-
position of the committees see Super-
visory Board, p. 26 as well as a description
of their working methods are presented
in detail in the Supervisory Board Report
see p. 28.
The Steering Committee, which
consists of the Supervisory Board Chair-
man and his two deputies, discusses
major issues, prepares resolutions and is
authorised in particularly urgent cases to
pass resolutions on behalf of the Super-
visory Board.
The co-determined General Com-
mittee, with four members, is respon-
sible in particular for the preparation
of Supervisory Board decisions regard-
ing the appointment of Executive Board
members. Furthermore, the committee is
responsible for preparing all resolutions
for the entire Supervisory Board which
concern the Executive Board compensa-
tion system, determination of the total
compensation of the individual members
of the Executive Board as well as the con-
tent, form and conclusion of their service
contracts.
The co-determined Audit Committee
also consists of four members. The Audit
Committee Chairman is independent
and was not a member of the company’s
Executive Board prior to his becoming
a member of the Supervisory Board. He
has expert knowledge in accounting and
the auditing of annual financial state-
ments. The Chairman is hence con-
sidered to be an independent financial
expert as defined by the German Stock
Corporation Act.
The committee meets five times a
year on a regular basis. It examines
the adidas AG annual financial state-
ments and the consolidated financial
statements including the Management
Reports. It also prepares the respective
Super visory Board resolutions. Further-
more, it deals with the quarterly and
half-year financial reports. In addition, it
prepares the proposal of the Supervisory
Board to the Annual General Meeting for
the appointment of the auditor as well
as the audit assignment to the auditor.
Beforehand, it assures itself of the
auditor’s independence and determines
audit priorities. The Audit Committee
supervises, in particular, accounting
matters and deals with risk manage-
ment and compliance. It assures itself
of the efficiency of the internal control
system as well as the risk management
system and is regularly informed on
the work undertaken by Internal Audit.
The Audit Committee’s exact methods
of working are regulated by the Rules of
Procedure, which were resolved upon by
the entire Supervisory Board in the year
under review see www.adidas-Group.com/
corporate_governance.
The co-determined four-member
Mediation Committee, formed in accord-
ance with § 27 section 3 MitbestG, is
responsible for submitting a proposal
to the Supervisory Board regarding the
appointment or dismissal of Executive
Board members if the two-thirds Super-
visory Board majority required for an
appointment or dismissal is not achieved
in the preceding resolution.