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adidas Group
2011 Annual Report
GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
145
2011
03.4 Risk and Opportunity Report
Risk and Opportunity Report
The adidas Group continuously explores and develops opportunities to sustain earnings and drive
long-term increases in shareholder value. We acknowledge that in our daily business we are exposed
to various risks and that it is necessary to take certain risks to maximise business opportunities. Our
risk and opportunity management principles and system provide the framework for our Group to conduct
business in a well-controlled environment.
03.4
Risk and opportunity management system
upgraded in 2011
In order to further increase efficiency and effectiveness of the Group’s
risk management process, we implemented a Group-wide IT solution
in 2011 which allows for systematic analysis and monitoring of risks
and opportunities. This IT solution supports all Risk Owners (i.e. all
direct reports to the adidas AG Executive Board and the managing
directors of all our markets) in managing risks and opportunities
and facilitates continuous documentation, monitoring and evaluation
of risks and opportunities. In addition, we further refined the Group
Risk Management Policy which is available to all Group employees
on our intranet. The policy outlines the principles, processes, tools,
risk areas, key responsibilities, reporting requirements and commu-
nication timelines within our Group. In particular, we decided to place
extra emphasis on more detailed assessment of risks and opportun-
ities in the upcoming twelve-month period while at the same time
maintaining transparency and awareness of risks and opportunities
that may affect the Group in the medium to long term.
Risk and opportunity management principles
The adidas Group is regularly confronted with risks and opportunities
which have the potential to negatively or positively impact the assets,
liabilities, financial position and profit and loss of the Group, or intan-
gible assets such as brand image.
We define risk as the potential occurrence of an external or internal
event (or series of events) that may negatively impact our ability to
achieve the Group’s business objectives or financial goals. Opportunity
is defined as the potential occurrence of an external or internal event
(or series of events) that can positively impact the Group’s business
objectives or financial goals.
We have summarised the most important of these risks and oppor-
tunities in this Risk and Opportunity Report in three main categories:
Strategic and Operational, Compliance-related and Financial.
Risk and opportunity management system
The adidas AG Executive Board has the overall responsibility to
operate an effective risk and opportunity management system that
ensures comprehensive and consistent management of all significant
risks and opportunities. The Group Risk Management department
coordinates the execution and further development of the adidas
Group’s risk and opportunity management system and is the owner of
the centrally managed risk and opportunity management process on
behalf of the adidas AG Executive Board. The adidas AG Supervisory
Board has the responsibility to monitor the effectiveness of the Group’s
risk management system. These duties are undertaken by the Super-
visory Board’s Audit Committee. In addition, wherever relevant, our
Global Internal Audit department also includes an assessment of Risk
Owners’ compliance with the Group Risk Management Policy within
the scope of their audit, as part of their regular auditing activities.
Supervisory and Executive Boards
Group Risk Management
Risk Management Policy & Methodology / Support
Monitoring &
Reporting
Identification
Evaluation
Handling
Risk Owners
01 adidas Group risk and opportunity management system