ARM 2010 Corporate Responsibility Report

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ARM 2010 Corporate Responsibility Report

  1. 1. Ourcommitment Corporate Responsibility Report 2010
  2. 2. Contents1. Introduction 1 3. Performance Indicators 13 CEO’s Welcome and Statement 1 3.1. Economic Indicators 13 How ARM makes money 2 3.2. Environmental Indicators 13 ARM at a glance 3 3.3. Employment Practices and Work Environment Indicators 151.1. Organisational Profile 4 3.4. Human Rights Indicators 171.2. Reporting Period 5 3.5. Society/Community Impact Indicators 181.3. Report Scope 5 3.6. Product Responsibility Indicators 191.4. Structural changes from previous 51.5. Organisational Changes 5 4. Looking Forward 221.6. External Advisors 5 4.1. Committment to charters and partnerships 23 4.2. Significant awards and recognition 242. Stakeholder Engagement 62.1. Employees 6 5. Appendix 252.2. Shareholders 6 5.1. Global Reporting Initiative 262.3. Value Chain 8 5.2. United Nations Global Compact 272.4. Surrounding Communities 9 5.3. Blueprint fro Sustainable Leadership 282.5. Environment 11 5.4. Other Key Metrics 34 Corporate Responsibility Report 2010 ARM Holdings plc b
  3. 3. 1. IntroductionCEO’s Welcome and Statement IntroductionCEO’s Welcome andStatement2010 marked ARM’s 20th Anniversary and the year providing excellentin which the twenty-five billionth energy-efficient ARM service to our partnersmicroprocessor was sold. It is impossible to say what task and shareholders,it now performs; it could be used in any one of a diverse fostering goodrange of devices: perhaps a heart monitor; a smart meter; relationshipsan electric motor; car infotainment system or a tablet PC. A with suppliers,total of 6.1 Billion ARM-based chips were shipped by our involvement with localpartners in 2010. This unrivalled reach of ARM technology communities, andbrings together the semiconductor industry’s largest partner minimising our impactcommunity, consisting of 800+ technology companies, on the environmentand the opportunity to create a world in which all products as well as designingand services are based upon efficient and sustainable energy-efficienttechnology. products. During 2010, ARM joined the United NationsThe next century will witness a dwindling supply of the Global Compact (UNGC), took an active role by conveningworld’s finite resources, a 50% rise in population and the an IT Sector panel at the World Climate Summit and joinedsituation can be further exacerbated by a the UN Caring for Climate initiative. 1.3changing climate and increasing demands for To take this further, ARM is the one of theenergy. We believe that the global economy, With the right first companies to incorporate the UNGC’sfrom the biggest countries and companies to technology we Blueprint for Sustainability Leadership intoeach of us as individuals, can make dramatic will succeed: its reporting. 2011 will see us re-affirmingimprovements in energy-efficiency and our commitment to the UNGC as well asresource-sustainability. This will help people to we can maintain launching some exciting joint activities. Wemaintain or improve their quality of life, and will and extend a have also entered into a partnership with the International Business Leaders’ Forumalso help companies to grow and increase their high quality of (IBLF) to research how the better use ofprofitability.I believe that technology’s role in achieving life, sustainably. technology can reduce energy consumptionthis will be of paramount importance. ARM is 100% and improve living standards globally. ARM has also been recognised by the NASDAQEveryone and everything needs to work more focussed on OMX CRD Global Sustainability 100 Index,efficiently if we are to preserve and sustainour world’s resources; and technology will achieving this demonstrating how corporate responsibilityhelp us get there. Our appliances, transport vision. has been incorporated throughout thesystems, industrial processes, buildings and ARM way of business. 2011 began with aperhaps even our food will have embedded strengthening of ARM’s commitment to thesmart technology to ensure that: empty buildings are Global Compact through our membership of LEAD andnot unnecessarily heated, cooled and lit; appliances only some exciting joint activities are planned for the comingever use the energy and resources needed to do their year.job; agricultural produce does not go to waste and new ARM’s heritage is in mobile devices, resulting in twentyproducts are designed considering the needs and budgets years’ experience of designing efficient processors. Thisof the billions of people yet to benefit from technology in technology is now being used in new applications wheretheir lives. smarter, more efficient products are needed to reduceARM is committed to implementing and developing best resource consumption whilst maintaining and improvingpractice Corporate Responsibility (CR) in our market living standards for everyone.segment (not just in our sector) and intends to become a With the right technology we will succeed: we canglobal leader in CR. ARM’s commitment to sustainability maintain and extend a high quality of life, sustainably. ARMand CR extends beyond the efficiency improvements that is 100% focussed on achieving this vision.our chip-designs help to achieve. As this report details,ARM’s CR strategy encompasses accountability to allstakeholders, including employees and their families, Warren East Corporate Responsibility Report 2010 ARM Holdings plc 1
  4. 4. 1. IntroductionHow ARM makes money IntroductionHow ARM makesmoney Stakeholders engagementARM is the world’s leading semiconductorIP company and The Architecture for theDigital World®. Performanace indicatorsARM has an innovative business model. We design and Licenses by end-marketlicense IP rather than manufacturing and selling of actualsemiconductor chips. We licence IP to a network ofPartners, called the ARM Connected Community, whichincludes the world’s leading semiconductor and systemscompanies. These partners utilise ARM IP designs to createand manufacture system-on-chip designs, paying ARM alicense fee for the original IP and a royalty on every chip orwafer produced. In addition to processor IP, we provide arange of tools, physical and systems IP to enable optimised Looking forwardsystem-on-chip designs.ARM’s strategy is for our technology to continue to gain Mobile 28share in long-term structural growth markets such as Embedded 29mobile phones, consumer electronics and embedded digital Enterprise 16devices. An ARM processor design may be used in many Home 18different chips and ship for over 20 years. Content indiciesHow ARM makes money 2-3 years 3-4 years 20+ years ARM research Partner chip Multiple applications and development development development and sales Licence Royalty Cost incurred revenue revenue $ $ Corporate Responsibility Report 2010 ARM Holdings plc 2
  5. 5. 1. Introduction1.1. ARM at a glance IntroductionARM at a glance Stakeholders engagementOur mission is to be the world’s number oneprocessor architecture, and we envisage a worldin which all electronic products and services arebased on energy-efficient technology from ARM, Performanace indicatorsmaking life better for everyone.In order to achieve our mission we understand that ARMmust be committed to implementing and developingbest practice Corporate Responsibility (CR) in our marketsegment and intends to become a leader for CR in thesector.ARM celebrated its 20th anniversary in November 2010.As a business recognised for its innovation and world classintellectual property, ARM has been built around the highestquality people in the sector. Looking forwardFigure 1Worldwide ARM offices. United Sweden Norway Lund Kingdom Trondheim Cambridge Blackburn Maidenhead Belgium Sheffield Leuven Germany Munich Content indicies Washington Olympia Michigan France Seattle Detroit Paris China Massachusetts Grenoble Japan California Beijing Irvine Boston Sophia Antipolis Slovenia Israel Shanghai Yokohama Texas Sentjernej Kfar Saba Korea San Jose Austin Shenzhen Seoul San Diego Plano Taiwan India Taipei Bangalore Singapore Toa Payoh Corporate Responsibility Report 2010 ARM Holdings plc 3
  6. 6. 1. Introduction1.1 Organisational Profile IntroductionARM Corporate Governance StructureARM’s Corporate Governance and organisational structureand as well as company Market and Financial Analyses can Shareholder percentagesbe found in the current Annual Report, published onwww.arm.com.Save for those shown above, the Company has not beennotified of any material interest of 3% or more or any non-material interest exceeding 10% of the issued share capitalof the company. Janus Capital Management Thornburg Investment Management Legal and General Investment Mangement FMR Other Corporate Responsibility Report 2010 ARM Holdings plc 4
  7. 7. 1. Introduction1.2. Reporting Period 1.4. Structural Changes from Previous 1.6. External Advisors Introduction1.3. Report Scope 1.5. Organisational ChangesAbout this report1.2. Reporting Period 1.4. Structural Changes from PreviousThis report covers the calendar year 2010. As part of our continued efforts to improve stakeholder1.3. Report Scope communications, we have enhanced our 2010 Corporate Responsibility Report. In addition to employing the GlobalUnless otherwise indicated, data published applies to all Reporting Initiative (GRI), ARM is one of the first companiesARM offices worldwide. However, our largest four offices to incorporate the UNGC’s fifty-point Blueprint forin Cambridge (UK), Bangalore (India), San Jose (California, Sustainability Leadership into its full CR Report.USA), and Austin (Texas, USA) represent 78% of the estate Our most recent previous report was for calendar yearportfolio and 76% of the total headcount. 2009.Headcount data used in the report is generally that on the 1.5 Organisational Changesfinal day of 2010, unless otherwise stated. Any explanationsor exceptions for specific offices will be stated. There have been no significant organisational changes (i.e. acquisitions, changes in ownership structure) over 2010. 1.6. External Advisors The International Business Leaders Forum has reviewed an earlier draft and provided feedback that has been incorporated into this version of the report. Corporate Responsibility Report 2010 ARM Holdings plc 5
  8. 8. 2. Stakeholder Engagement2.1. EmployeesStakeholderengagement Stakeholders engagementARM’s continued success has beenachieved through the strength and depthof our stakeholder relationships.Our corporate governance framework and processes 2.1. Employeesenable us to manage the Group effectively and to The welfare of ARM’s employees around the world is one ofdemonstrate transparent, consistent and effective our top priorities. ARM’s Corporate Vision and Managementgovernance so that we remain accountable to our Charter include commitments to provide a sector-leadingshareholders, employees, partners, suppliers and the local, environment for employees to develop their personalregional, and national communities we support and with and collective potential. The interests of employees andwhom we interact. shareholders are aligned by providing equity participation toARM strives to maintain a positive reputation built on all employees through restricted shares under the Employeecorporate credibility and public trust. ARM’s CR strategy Equity Plan and the opportunity to buy shares throughencompasses accountability to all stakeholders, including savings plans. When ARM’s quarterly results are published,employees and their families, providing excellent service to members of the executive committee also present the sameour partners and shareholders, fostering good relationships results internallywith suppliers, on-going involvement with local communities We have established a Global Equal Employmentand minimising our impact on the environment as well as Opportunities policy covering the recruitment, transfer anddesigning energy efficient products. These stakeholders promotion of staff as well as their training and development.represent the groups most affected by ARM’s work and We have a formal progress measurement system whichthose the company must carefully consider in all decisions includes a number of processes. At least once a year,for business success. Proper stakeholder consultation employees and managers have a formal discussion onmeans engaged employees, supportive communities, performance and development through the ARM Feedbackhealthy environments, an effective supply chain, and and Development System (AFDS). Training needs areenthusiastic shareholders and customers. Each of these is tracked and delivered and progress is monitored throughcrucial to ARM’s success. our Learning and Development team, ensuring that the Group’s skills base is increased in line with business needs and employees’ personal aspirations. Figure 2 2010 ARM Austin’s 20th Anniversary Trivia Challenge raising money for the Capital Area Food Bank. Corporate Responsibility Report 2010 ARM Holdings plc 6
  9. 9. 2. Stakeholder Engagement Overall key drivers 20102.1. Employees Questions2.2. Shareholders 1,471 (78%) ARM provides freedom to be creative 97 552 496 184 94 45 1,485 (90%) ARM provides challengingEmployee global opinion survey – engagement 2010 and interesting work 245 762 333 75 50 20 1,468 (80%) Questions ARM provides sufficiently 103 633 442 161 93 36 1,321 (90%) varied work Overall I would recommendARM as a great place to work 258 716 347 84 59 16 1,483 (91%) My work is meaningful to me 238 766 299 67 48 20 1,233 (88%) I have no plans to leave ARM in the next 12 months 416 576 241 98 71 44 1,463 (74%) Stakeholders engagement ARM is committed to my personal development 95 484 510 184 127 63 1,254 (87%) I am satisfied with my job 180 687 387 122 72 34 1,467 (85%) ARM provides opportunities 143 649 457 124 76 18 0% 100% to learn and develop new skills 1,473 (85%) Percentage of respondents ARM provides open and 1,490 (80%) employees responding honest communication 150 704 396 111 77 35 Overall engagement score: 86% 1,483 (81%) ARM actively cares about its staff 148 640 411 131 104 49 1,477 (87%) ARM is a fun place to work 135 668 482 109 63 20 Strongly agree 1,477 (88%) Agree ARM provides a collaborative 136 731 433 104 53 20 work environment Somewhat agree Somewhat disagree 0% 100% Disagree Percentage of respondents Strongly disagree 1,490 (80%) employees responding Overall engagement score: 86%In order to nurture a culture of openness, ARM focuses (with smaller follow-ups annually) to monitor employee viewson open lines of communication in all directions (upward, and provide essential input on internal operations. Thisdownward, and across divisions and functions). As part year’s Engagement Survey had 1490 respondents (80% ofof this commitment ARM provides periodic question and total established employees worldwide).answer sessions at each site led by an executive committee The Executive Vice President of Human Resources sits onmember where “no question is off limits”. Additionally, the the Executive Committee and has responsibility for mattersARM Consultation Forum (ACF) meets every two months, related to employees.and comprises nine employee representatives, who are 2.2. Shareholdersexpected to represent the views and interests of theirrespective constituencies. The ACF is a key consultation Communicating to and consulting with all our shareholders,mechanism for ARM to gather the views of UK employees both institutional and private, is a key priority of theand for employee representatives to talk openly about a business. The Executive Committee makes considerablewide range of issues that affect ARM employees. Amongst efforts to establish and maintain good relationships withthe objectives are provision of a forum for employees and shareholders. The main channel of communicationmanagement to consult one another and capitalise on the continues to be through the Chief Executive Officer, thecompany’s cultural diversity and various experiences. At the Chief Financial Officer and the VP of Investor Relations,ACF, management will consult representatives on the basis although the Chairman, the Senior Independent Directorof a constructive exchange of views on matters related and the other non-executive directors are available toto the organisation’s industrial, economic, commercial, engage in dialogue with major shareholders as appropriate.financial, technological, structural and HR development in There is regular dialogue with institutional shareholdersthe context of the overall business performance. throughout the year. The board encourages communicationEmployee consultation groups advise the company with private investors, and part of ARM’s website ison various issues that impact employees, and a dedicated to providing accurate and timely information forcomprehensive engagement is conducted every two years all investors including comprehensive information aboutEngagement scores over time 87% 85% 85% 83% 86% I am satisfied with my job I have no plans to leave ARM in the next 12 months85% 84% 93% 83% 84% 89% 83% 84% 88% 81% 81% 85% 85% 85% 89% Overal I would recommend ARM as a great place to work 2006 2007 2008 2009 2010 Overal Positive Engagement I am satisfied with my job I have no plans to leave ARM in the next 12 months Overall I would recommend ARM as a great place to work Overall Positive Engagement Corporate Responsibility Report 2010 ARM Holdings plc 7
  10. 10. 3. Stakeholder Engagement2.2. Shareholders2.3 Customers and Partners Figure 3 ARM partner meeting 2010. Stakeholders engagementthe business, its partners and products, all press releases, More information about shareholder engagement can beand RNS and Securities and Exchange Commission (SEC) found in ARM’s 2010 Annual Report, available onannouncements. At present, around 30 analysts write www.arm.com.research reports on ARM which appear on the website. 2.3. Value ChainShareholders can also obtain telephone numbers from thewebsite, enabling them to listen to earnings presentations ARM has built its business around a partnership model,and audio conference calls with analysts. Webcasts or working together with our customers to enable mutualaudiocasts of key presentations are made available through success. ARM maintains continuous efforts to achievethe website. All shareholders may register to receive ARM’s class-leading levels of customer and Connectedpress releases via the internet. Community satisfaction, measured through regular surveys and feedback channels including an annual worldwide ARMMembers of the Executive Committee attend the annual Partner Meeting and ARM Technology Conferences held inanalyst and investor day and develop an understanding India, Asia, and the US.of the views of major shareholders through direct contactwhich may be initiated by shareholders, or through Engagement with customers happens at many levels in theanalysts’ and brokers’ briefings. The Committee also organisation, from the executive committee level, throughreceives feedback from ARM’s brokers who follow investor sales, marketing and engineering. Customer satisfaction isroadshows and financial PR advisers who consult analysts. monitored and reviewed by management through a rangeThe board actively encourages participation at the Annual of key metrics including product and project delivery dates,General Meeting (AGM), held this year on 14 May 2010, product quality levels, customer support satisfaction, andwhich is the principal forum for dialogue with private direct feedback gathered from customers and elsewhereshareholders. A presentation was made outlining recent in the Connected Community. The output is reviewed bydevelopments in the business. An open question and management which, in turn, raises any pertinent issues withanswer session followed. Results are available on ARM’s the executive committee.website. This year, ARM also undertook several special initiatives Corporate Responsibility Report 2010 ARM Holdings plc 8
  11. 11. 2. Stakeholder Engagement2.3 Customers and partners2.4 Surrounding communities Figure 4 The Future Business Centre site, set for completion in 2012. Stakeholders engagementdesigned to develop partner engagement. The ARM 2.4. Surrounding CommunitiesConnected Community Panel at the World Climate Summit It is ARM’s policy to be a good corporate citizen which(discussed further in Section 3.6) convened industry invests in and engages with surrounding communities. Therepresentatives from ARM partners Microsoft, HP, and company President is responsible for cultivating high-levelTexas Instruments, as well as ourselves, to discuss the role relationships with industry partners and governmentalIT can play in mitigating and adapting to climate change. agencies. ARM undertakes many initiatives within theWe’ve additionally contracted IBLF to research ways in communities in which it functions.which our technology can make strides in sustainability. In 2010, ARM invested £2.5 million in a charitable bondMore information about customer engagement can for Cambridge-based social enterprise Future Business, tobe found in ARM’s 2010 Annual Report, available on support the development of a brand new incubation centrewww.arm.com. for social and environmental businesses in the region. ThisAs a Group which does not have any manufacturing bond will generate a £566k donation the creation of theoperations, ARM has a limited number of suppliers. Future Business Centre, aiming to develop businesses withCentral procurement functions were enhanced in 2010 a social and/or environmental impact, whether operating onand the introduction of new policies and procedures, with a for-profit or not-for-private profit basis. Examples includetraining workshops, have enabled ARM to standardise the social businesses and clean-tech start-ups.procurement screening and feedback processes across ARM’s University Programme helps the next generationthe Group. This new procurement system has enabled the of ARM engineers by donating equipment and software,introduction of corporate responsibility requirements so assisting students, helping to design courses and providingthat any new supplier must demonstrate that they have a technical support and training. ARM is involved in acompatible ethical policy in place. number of STEM (science, technology, engineering and mathematics) programmes at regional schools, sharing employees’ expertise with students. ARM is a founding member of The Learning Collaboration, enabling small and Figure 5 ARM Bangalore’s Charity Fair. Corporate Responsibility Report 2010 ARM Holdings plc 9
  12. 12. 2. Stakeholder Engagement2.4 Surrounding communities Figure 6 Team ARM Austin in the Bowl for Kids’ Sake Event. Stakeholders engagementmedium sized organisations around Cambridge to share the stars in the night sky, and a Car Safety Controller devicetheir diverse experience and combine their buying power to monitor driving style. The company also supports ato purchase quality training and development services. new scheme called Go4SET which encourages companyARM is also a founder member of the Cambridge Network mentors to work with teachers and younger pupils on anwhich links people from business and academia to the energy and environment-themed technology problem inglobal high-tech community. This year, ARM partnered and around their school and home. This year, ARM mentorswith The Humanitarian Centre to encourage research worked with schools devising ways to collect energy fromand partnerships that improve the efficacy of information the environment to reduce costs. One school built a mocktechnology in international development. ARM has also solar water heater. ARM mentors are valuable inspiration tohelped found the Cambridge Responsibility Forum, a joint the pupils, demonstrating how science and technology canventure between multiple local businesses to promote be applied to solving the society’s problems. ARM plans tocorporate responsibility and sustainability issues in support and expand Go4SET further in the coming yearsCambridge. as part of a longer term commitment to employee andARM employees actively participate in multiple science, community development.technology, engineering, and mathematics (STEM) Team ARM, the Group’s global team-building and fund-educational efforts within the community. During the raising employee network, raised over £100,000 for charities8-month long Engineering Education Scheme (EES), ARM through sponsored cycle rides, marathons, boat races andengineers present problems to students and help them even moustache-growing. Amongst other events, Teamgenerate possible solutions. The students learn about ARM Bangalore sponsored a local spelling bee with INRproject lifecycles, teamwork, time management, report 15,000 that aimed to build Basic English proficiency andwriting, and presentation delivery. Example projects from improve the communication skills of financially-challenged2010 are a progressive brake light, which was a retrofitted students from government schools. They also held adevice whose brightness corresponds to the deceleration of Charity Fair, showcasing twelve local NGO’s, that raised INRthe vehicle, a Stargazer prototype handheld device showing 91,360 for the Marathahalli Government School. In May Corporate Responsibility Report 2010 ARM Holdings plc 10
  13. 13. 2. Stakeholder Engagement2.4 Surrounding communities2.5 Environment Figure 7 ARM China planting trees on the 20th Anniversary. Stakeholders engagement2010, 67 employees participated in the Bangalore Sunfeast 2.5. EnvironmentMarathon. The money raised from individual sponsorship An expanding global population, rising energy costs andand company matching was donated to Future and Light climate-change concerns are all driving renewed interestfor the Young (Fly). This allowed 30 talented children across in energy-efficiency. ARM’s technology is inherently low-7 states of India to continue their education by having their power and enables smarter, more energy efficient productsfees paid. This was in addition to our role in the Anvas to be created. As ARM-designed chips are in over 20% ofprogramme, where ARM and its employees sponsor all digital electronic products sold in 2010, this presents ana teacher in a government school to teach computer enormous opportunity for improved efficiency.education. TeamARM Bangalore also ran a number of otherevents including blood donation fairs through to the 20th For 20 years, ARM’s research and development hasAnniversary celebrations where money was raised to help focussed on getting the best processing performance froma 6 month old child be treated for glass bone disease. The the least power. ARM technology allows partners to developchild had already suffered 10 fractures. smarter digital electronic products that can measure, manage and improve the environmental performance ofTeam ARM Austin and San Jose have been part of events consumer electronics and IT equipment, reducing thesuch as the Susan G. Komen Race for the Cure, raising carbon footprint for many consumer products.money for breast cancer awareness, and the LiveStrongbike ride, benefitting prostate cancer research. ARM encourages a culture of environmental responsibility within its offices. T(n)S, the catering company contractedARM encourages employees to support their local in the Cambridge headquarters, proudly sources locally-communities by enabling them to act as school governors, grown Cambridgeshire food including baked goods, meat,mentors to young people, or volunteers to organise and produce. ARM actively promotes employees’ useevents to raise money for charity. ARM’s sustainability and of alternative transportation by utilising the Cycle2Workcommunications staff are available for consultation with local scheme under which employees may choose to reducecommunities through phone calls, emails, and post and basic salary through a sacrifice arrangement to purchasealso attend local events and hold consultation meetings with bicycles and cycling safety equipment for commutingcommunity representatives in ARM facilities. to work. The Austin, TX, USA office, in addition to using reclaimed grey water to run toilet facilities, recently replaced all paper cups in the cafe with reusable glasses and mugs. Corporate Responsibility Report 2010 ARM Holdings plc 11
  14. 14. 2. Stakeholder Engagement2.5 Environment Figure 8 Grundfos pump on which ARM Cambridge is conducting smart water research. Stakeholders engagementMany offices furthermore employ motion-sensing lights in issue at stake. Caring for Climate has been endorsed byconference rooms to prevent unnecessary lighting use and ARM’s CEO.provide recycling facilities for paper, aluminium, plastic, and ARM is constantly improving its current strategy for lowcardboard. carbon business operation, including setting goals of:ARM has participated for two years running in the Carbon • 30% emission reduction in tons of CO2 emission perDisclosure Project. The monitoring and analysis of energy employee by 2020usage and methods to reduce associated impacts • 15% energy use reduction measured in KW Hours peremployed by this effort ensures all our operations become employee by 2020engaged in improvement objectives. Both targets refer to reductions against 2009 baseline.ARM facilitated a panel at the new World Climate Summit.This collaborative, global 10-year initiative, launched by UN The goals, which will be furthered by adoption of ARMEnvironmental Program partners such as World Bank, the technology wherever possible, are tracked monthly andUNGC, and the aforementioned Carbon Disclosure Project, is reported to ARM management as well as stakeholders.running in parallel with the Conference of the Parties of the UN We are also reviewing behavioural change issues relatingFramework Convention on Climate Change (COP16). Its goal to the adoption of existing video-conferencing facilities andis to help governments, businesses, and financiers accelerate are investing in more equipment with a view to reducingsolutions to climate change. ARM convened a panel of industry the number of flights per employee each year. The centrallypeers from within our Connected Community. managed, reliable video-conferencing systems we areThis year, we have also committed to the Caring for installing allow for monitoring, maintenance, and metric-Climate platform. This offers an interface for business and collection.governments at the global level, transcending nationalinterests and responding to the global nature of the climate Global Compact Communication on Progress The above goals are in line with the Environmental Issues Area of the UNGC. The goals are tracked monthly and reported to ARM management as well as stakeholders, as required by Principle Eight. The commitment to use all ARM-powered products moreover supports Principle Nine, as these products are highly energy efficient and will enable all of ARM’s offices to operate at a lower energy consumption level. Corporate Responsibility Report 2010 ARM Holdings plc 12
  15. 15. 3. Performance Indicators3.1. Economic Indicators3.2. Environmental IndicatorsPerformanceIndicators Profit from operations £m 06 49.2 81.8 07 39.7 82.1 08 59.9 97.7 09 45.6 95.1 10 107.0 164.3 Profit under IFRS Normalised profit Performanace indicators Growing revenues and continued financial discipline drive ARM’s profitability.ARM endeavours to be a responsible member of the 3.2. Environmental Indicatorsbusiness community by taking into account the interests ARM’s direct activities do not produce harmful wasteof all its stakeholders, including employees, customers, or emissions, and the Ethical Investment Researchsuppliers, local communities, and environments in which and Information Service (EIRIS) grades ARM as anit operates and by entrusting the Chief Financial Officer to environmentally “low impact” business. However, ARMtake responsibility for these matters. recognises the need to mitigate any form of environmentalThe following indicators illustrate ARM’s performance to its impact, and our environmental performance is measuredresponsible business commitments. against targets to reduce resource usage, increase reuse3.1 Economic Indicators and recycling, and control carbon emissions. We have set corporate goals of:As our customers are the world’s largest semiconductormanufacturers, their regular royalty payments have provided • 30% emission reduction in tons of CO2 emission perARM with a highly reliable cash flow. Given our broad base employee by 2020of partners and end markets, ARM’s business model is • 15% energy use reduction measured in KW Hours perstrongly cash generative. In 2010, we generated £125 employee by 2020million. Since 2004, ARM has returned over £360 million ARM works with Lloyd’s Register Quality Assuranceto shareholders through a mixture of share buybacks and (LRQA) environmental auditors to develop and improve ourdividends. Full economic indicators and analyses can be environmental management system. LRQA’s twice yearlyfound in our 2010 Annual Report at www.arm.com. environmental and health and safety themed audits are now integrated with their other accreditation work, which has increased understanding of ARM’s environmental objectives among the local management and provided action plans for achieving these objectives. Adopting LRQA’s Business Assurance approach provides an independent assessment of the ARM Management System and the various reviewRevenue $m Sterling revenues £m 06 199.0 202.5 82.1 483.6 06 107.8 110.6 44.9 263.3 07 208.8 217.9 87.6 514.3 07 104.1 110.7 44.4 259.2 08 266.8 189.7 89.7 546.2 08 147.7 103.5 47.7 298.9 09 244.3 164.1 81.1 489.5 09 155.4 98.5 51.1 305.0 10 335.3 208.2 87.8 631.3 10 217.7 132.5 56.4 406.6 Royalty Licensing Other Royalty Licensing OtherARM’s revenue growth is sustained by our customers About 95% of ARM’s revenues are in US dollars,incorporating ARM technology in more of their product lines. but only about half of our costs are US dollar-based. Corporate Responsibility Report 2010 ARM Holdings plc 13
  16. 16. 3. Performance Indicators3.2. Environmental IndicatorsGlobal CO2 emissions* UK waste and recycling*tonnes/employees m3/employee** 2.1 1.9 4.42 1.8 4.01 3.97 1.7 2008 2009 2010 Cambridge, UK San Jose, CA 2007 2008 2009 2010 Bangalore, India General waste Austin, TX** Cardboard and paper recycled Overall Plastics and glass recycled* Largest 4 offices, 78% of the Estate Portfolio.** Data not available for 2008. * All UK offices: Cambridge, Blackburn, Performanace indicators Sheffield, Maidenhead, 41% of total headcount. ** Average number of all employees in year.procedures in place within the company. This approach a Threatened Species on the IUCN Red List . Thoughenables LRQA to verify ARM’s compliance with ISO9001 the species is classified as being of Least Concern, ARMand components of other relevant ISO standards. diligently complies with all applicable United States laws,At present, ARM is not certified to any industry including the Migratory Bird Treaty Act. The ARM buildingenvironmental measurement standard. However, ARM is also adjacent to the Barton Creek Wilderness Park,works with LRQA to make a habit of operating informally a protected 1000-acre greenspace which is part of anto ISO14001 requirements. important watershed and home to many endangered species, such as the Golden-Cheeked Warbler . ARM’sARM recognises that climate change is a significant risk impact on the Wilderness Park is minimal, as there areto the human population. With regard to any immediate no roads through it and no significant emissions from theimpact to our business (such as climate change), ARM has building.developed business continuity plans for all of its operationsworldwide to enable business to continue should a serious ARM’s CO2 emissions from air travel were not availableevent or incident occur. These plans are designed to protect in 2010, due to data inconsistencies. ARM contracted athe interests of ARM’s stakeholders and in particular ARM’s new travel supplier during the middle of the year whoseemployees, property, and other assets and to provide methods for carbon emission calculations were inconsistentfacilities and infrastructure to reinstate business operations with those of the previous supplier. Data will be available,as quickly as possible after an event. The continual review however, for 2011. ARM recognises that because ourof these plans forms part of the management review customer requirements call for regular face-to-faceprocess alongside environmental management and health, interaction, business travel accounts for generally half of oursafety and welfare. ARM’s Business Continuity Plan is CO2 emissions. We have undertaken a variety of initiatives,benchmarked against the British Standard BS25999. including use of state of the art video conferencing equipment, to reduce this. We have set an informalARM’s Austin, Texas office is located within or around company goal of keeping all travel steady even while ourseveral key areas of biodiversity. The building itself is inside headcount and sales increase.a protected habitat of the Turkey Vulture, or Cathartes aura, 1. BirdLife International 2009. Cathartes aura. In: IUCN 2010. IUCN Red List of Threatened Species. Version 2010.4. www.iucnredlist.org. 17 December 2010 2. Nature Conservancy of Texas 2010, “Conservancy and Austin to Expand Barton Creek Wilderness Park”. www.nature.org/wherewework/northamerica/states/texas/news/ news3409.html. 17 December 2010. Corporate Responsibility Report 2010 ARM Holdings plc 14
  17. 17. 3. Performance Indicators3.3. Employment Practices and Work Environment IndicatorsAll employees by contract 2010 established 2010 established 2010 establishedtypes 2010 employees by region employees by age group employees by gender UK 41% 21-31 25% Male 83% 1,889 established US 27% 31-40 42% Female 17% employees 71% India 15% 41-51 25% Gender split of engineering graduates External 7% Continental Europe 11% 51-60 7% in the UK in 2010: 90% male, 10% Fixed term 3% Far East/Asia 6% 61-70 1% female. Performanace indicators3.3. Employment Practices and Work Environment Being a company with such wide-reaching influence,Indicators ARM is committed to the equality of opportunity in its employment policies procedures and practices. ARMWith headquarters in the United Kingdom and offices in is strongly bound by our Global and Local EEO PoliciesNorth America, Europe, the Middle East, and Asia, nearly and will therefore take the necessary action to ensure1900 established employees worked for ARM in 2010. adherence. To this end, within the framework of the law,Ninety-one percent of employees are established, and we are committed wherever practicable to achieving andARM’s Processor Division is the largest by headcount. maintaining a workforce which broadly reflects the nationalIncluding all employment contract types, ARM has a total of catchment area within which we operate. As an item of2,081 employees, with over half being below the age of 40, note, we particularly believe our employment rates ofin 2010. Analysis of our corporate governing bodies can be women to be above average, as the gender split of UKfound in the Annual Report at www.arm.com. engineering graduates in 2010 was 90% men to 10% women. Per the above chart, 17% of ARM employees are female. IT Industry Average Gender Pay Gap: US average women’s salaries as % of men’s – 76% (2009)3 UK average women’s salaries as % of men’s – 80% (2007)4 ARM’s average women’s salaries as % of men’s – 93%Headcount Established employees 06 1,657 07 1,728 08 1,747 09 1,704 10 1,889 3. U.S. Bureau of Labor Statistics, “Women’s earnings and employment by industry, 2009,” www.bls.gov/opub/ted/2011/ted_20110216_data.htm. 18 February 2011. 4. Taylor, Bill. “Women in ICT today: A UK Perspective” www.uniglobalunion.org/Apps/ UNINews.nsf/7a1fe394b29b0003c12574c6004d8645/2b07e695e33a5061c125757d0033b0b 9/$FILE/Taylor_CWU.ppt. 18 February 2011. Corporate Responsibility Report 2010 ARM Holdings plc 15
  18. 18. 3. Performance Indicators3.3. Employment Practices and Work Environment IndicatorsAFDS completions Percentage of employees completed 95% 73% 82% 87% 76% EMEA UK India66% 78% 85% 86% 83% 84% 83% 53% 99% 36% 81% 69% 90% 87% 81% 73% 96% 95% 96% 92% Asia Pacific Overall 2006 2007 2008 2009 2010 EMEA Performanace indicators US India AsiaPacWhile the company does not maintain a specific policy in Overall ARM employs a number of assistance and wellnessregards to local hiring, we maintain recruitment relationships programmes for workers and their families. Employeeswith universities local to ARM offices. We have also adopted receive benefits including private medical insurance, travela Global Equal Employment Opportunities Policy covering and life insurance, pensions/401k plans, sabbaticals,the recruitment, transfer and promotion of staff as well as company sick pay, holiday pay, and flexible working.their training and development. We promote the best use Unum LifeWorks is an independent Employee Assistanceof our human capital and encourage continuous learning Programme contracted by ARM for employee counsellingand development, in order to fulfil career aspirations and support, and ARM’s health insurance providers offerand promote innovation and continuous improvement mental health coverage. Core Cambridge is employedthroughout the Company. Composition of hired senior at ARM’s headquarters for physical therapy and athleticmanagement is discussed further in our Corporate training, and on-site gym facilities are provided at manyGovernance sections of the Annual Report on ARM offices. ARM also offers family-friendly programmeswww.arm.com. such as maternity, paternity, and parental leave, a child careARM believes that every employee should have the voucher scheme in the UK, and a flexible spending accountopportunity for regular and comprehensive feedback on his in the US.or her job performance. As such, the group employs theAFDS process to identify gaps in employees’ abilities andto provide training or other suitable remedy. This ensures allstaff have clear accountabilities and objectives that relate tothe wider organisational objectives is regulated by the ARMManagement System (AMS). 06 199.0 202.5Health insurance coverage: US employees 82.1 07 208.8 217.9 87.6 Dental 128 298 83 509Medical 133 302 73 508 Vision 126 73 104 509 87.8 Employee only Employee + family Employee + spouse Corporate Responsibility Report 2010 ARM Holdings plc 16
  19. 19. 3. Performance Indicators3.3. Employment Practices and Work Environment Indicators3.4 Human Rights IndicatorsFormal training hours Training (hours/established employee) Stakeholders engagement 25.2 23.5 23.2 20.3 EMEA 5.5 UK India 0.6 11.2 15.1 18.1 32.6 15.4 18.8 16.1 49.4 24.6 15.7 46.3 27.4 20.6 36.5 16.4 Asia Pacific 5.5 3.7 9.6 6.4 Average 2006 2007 2008 2009 2010 EMEA US India AsiaPac AverageARM has adopted UK health and safety legislation as the 3.4. Human Rights Indicatorsglobal corporate standard due to its depth and breadth and As part of our commitment to the UNGC, ARM adheresmaintains membership of the British Safety Council to reflect to the Universal Declaration on Human Rights. ARMthis standard. ARM’s global internal audit programme, the recognises its ethical responsibilities to all stakeholders whichFacilities Management Review, evaluates health and safety are manifested in a range of policies and processes. ARMperformance across all sites with a goal of consistency of conducts its business with integrity, respecting all cultures andhealth and safety provision world-wide. the dignity and rights of individuals. Although the nature andDue to these efforts, rates of absence from work due to locations of ARM’s businesses make the risk for human rightssickness, injury, or occupational disease have decreased in violations minimal, the company takes seriously its obligationsrecent years. Missed work time in the UK in 2010 was 20.8 to promote respect for and observance of human rights andhours per capita and 46.9 hours per capita in India. fundamental freedoms for all. ARM engages in active dialogue with suppliers with whom we have an ongoing, long-term relationship. In suppliers’ contracts, they are encouraged to abide by ARM’s Code of Business Conduct and Ethics policy in their own organisations. The supplier approval procedure is also under review to make such ethical policies a requirement and no longer optional.Figure 10Team ARM Cambridge raising money for Breakthrough Breast Cancer inthe London to Cambridge Bike Ride. Corporate Responsibility Report 2010 ARM Holdings plc 17
  20. 20. 3. Performance Indicators3.4 Human Rights Indicators3.5 Society/Community Impact indicators Figure 11 ARM Trondheim’s 20th Anniversary Robot Racing Competition with local schoolchildren. Performanace indicatorsARM’s Code of Business Conduct and Ethics is available affiliation, gender, gender reassignment, sexual orientation,on the website at www.arm.com. This Code contains marital status, family connections, membership or non-provisions against conflicts of interest, corruption, illegal membership of a trade union, disability, or any other group.activity, inaccurate public reporting, insider trading, As such, ARM takes internal charges of discrimination verybribery, and anti-competitive behaviours. The company seriously. Any employee who has a concern of this sort canregularly monitors employees’ awareness of ARM policies make use of the Company’s grievance procedure. Thereand procedures, including its ethical policies. All ARM were two grievances raised in 2010, both relating to bullyingemployees are obliged to read the company’s Global Code and harassment and in one case perceived discrimination.of Business Conduct and Ethics Policy, mandating honesty Human Resources followed a formal investigation processand accountability in all business activities. In 2010, the in both cases, and found no evidence to support eitherCode of Conduct also became aligned with the new UK claim. There were no other cases of discrimination or unfairBribery Act 2010 which applies to offences committed in treatment during 2010. There were 16 capability/disciplinarythe UK irrespective of nationality and those committed by cases in 2010, however these were in the majority due toUK companies or by UK citizens or residents even if the act poor performance and managed formally in line with ouror omission occurs abroad. As such, ARM’s code regulates policies. Historically, numbers of such claims have been ofconflicts of interest, bribery, legal compliance, insider trading, similar magnitude.information and company asset protection, political activities, 3.5. Society/Community Impact Indicatorsand employee whistle-blowing.Additionally, the employee handbook states that ARM It is the Company’s policy not to make any politicalis committed to human rights and ethical trading in its contributions or donations to solely religious causes. Thisbusiness activities and employment practices; ARM policy applies to the use of company assets and is notrequires respect for economic, social, cultural, political intended to discourage or prevent individual employees,and civil rights, compliance with human rights law, and officers, or directors from making such contributions orprevention of discrimination based on race, creed, colour, engaging in these activities on their personal capacity.nationality, ethnic origin, age, religion or similar belief, political No one may be reimbursed directly or indirectly by the ARM is also committed to complying with the tenants of the UniversalFigure 12 Declaration of Human Rights, from which the First and Second UNGCARM Bangalore’s blood drive. Principles are derived. More information on the Declaration can be found at www.un.org/en/documents/udhr. Corporate Responsibility Report 2010 ARM Holdings plc 18
  21. 21. 3. Performance Indicators3.5 Society/Community Impact indicators3.6. Product Responsibility IndicatorsMoney raised for charity Europe £71,000 Figure 13 US £18,000 Team ARM Cambridge raising money for India £7,000 East Anglia’s Children’s Hospices in the Far East £2,000 Dragon Boat Race. Performanace indicatorsCompany for personal political or religious contributions, and in contracts, then project progress, risks, and qualitysubject to ARM’s charity giving policy. of deliverables are managed using design reviews andThe company has also been actively working to improve the assessments. Because our primary business is thetransparency of its business practices. By joining multiple licensing of intellectual property, customer health and safetypartnerships with external organisations such as IBLF, impacts from our products are minimal. However, throughthe UNGC, and the CDP (see Section 1), ARM hopes to internal communication tools, we do embed lessonsdemonstrate improvement in this area. learnt into review and assessment templates, monitor and develop employee performance through AFDS, activelyTeam ARM also actively raises money for charities local seek feedback from customers to improve products andto ARM offices. In 2010, ARM raised, through employee services, and monitor business performance using Keyinitiative and corporate gift-matching, nearly £100,000 for Performance Indicators. These are tracked at monthlythe benefit of community charities, sponsoring such causes Customer Satisfaction Meetings to help drive improvementsas hospices, homeless shelters, schools, and medical in product and service quality.research. Additionally, ARM’s Matching Gift DonationProgramme will double, up to a reasonable limit set by each Most ARM-powered goods are manufactured by theoffice, employees’ own contributions to charity. Additional ARM Connected Community of companies. However, asinformation on our charitable contributions can be found in part of our participation in the World Climate Summit andthe Director’s Report of ARM’s Annual Report. commitments to IBLF and UNGC, we work continuously with our Partners to improve sustainability across this3.6. Product Responsibility Indicators Connected Community. We collaborate with research andARM’s Quality Policy demands satisfaction of Customer development organisations such as university science andneeds and expectations by delivering products that engineering programmes worldwide. We also participate inare verified to meet the agreed requirements on time. European Union-funded research to improve the efficientUnderstanding customer needs and expectations is an and responsible development of ARM-powered productsintegral part of ARM’s product development process. and worked with the American Council for an Energy-Customer requirements are set out in product specifications Efficient Economy (ACEEE) to help found its intelligentGlobal Compact Communication on ProgressEmployees’ explicit acceptance of ARM’s Global Code of BusinessConduct and Ethics Policy is tracked through internal systems anddemonstrates ARM’s commitment to the Tenth Principle of the UNGC. Corporate Responsibility Report 2010 ARM Holdings plc 19
  22. 22. 3. Performance Indicators3.6. Product Responsibility Indicators Figure 14 ARM sponsored the Humanitarian Centre’s year of ICT for international development (photo courtesy of Ken Banks). Performanace indicatorsefficiency advisory board. all company marketing and communications. Our corporatePart of ARM’s commitment to low-power products is policies prevent sponsorship of illegal activities or those thatdemonstrated in our Processor Optimisation Packages. We violate Equal Opportunity and Discrimination laws. ARM’soffer optimised physical IP that will deliver a pre-determined Code of Business Conduct and Ethics (available on theprocessor implementation, based on the customer’s choice website at www.arm.com) requires full, understandable,from amongst different options for higher performance or and accurate information in our public disclosures aslower power. Supporting a range of Cortex processors, well as complete compliance with all applicable laws andprocess nodes, and foundries, we allow the customer regulations, including those of the United States Securitiesto make the decision as to power-consumption versus and Exchange Commission and the United Kingdom Listingprocessing performance. Authority and Financial Services Authority, in all material respects about the company’s financial condition andWe have also taken responsibility to influence how results of operations. We maintain the highest standards ininformation technology can be used to aid in poverty all matters relating to accounting, financial controls, internalreduction. ARM’s partnership with the Humanitarian Centre’s reporting and taxation. All financial books, records andICT4D Year funded networking events, presentations, accounts must accurately reflect transactions and events,and research into the innovative use of information and and conform both to required accounting principles andcommunication technology to alleviate global poverty and to the company’s system of internal controls. Recordsinequality. Events in this series include Professor Tim Unwin, shall not be distorted in any way to hide, disguise or alterUNESCO Chair in ICT4D at Royal Holloway, University of the company’s true financial position.. The company’sLondon, analysing evidence for how new technologies Disclosure Committee consisting of senior managementimpact on poverty, and Prof. Geoff Walsham, Prof. Ian assists in monitoring such disclosures.Leslie, Dr. Peter Gough, and the Hon. Minister of Health,Rev. Dr John Seakgosing, from Botswana, examining ARM also is committed to safeguarding the protectione-Health for International Development. More information on of data collected from employees, suppliers, customersthis can be found at www.humanitariancentre.org/ict4d. and other third parties. Our Global Data Protection Policy, owned by ARM’s Data Protection Officer, summarises theARM believes ethics and accuracy must be maintained in Corporate Responsibility Report 2010 ARM Holdings plc 20

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