Annual Report and Accounts 2010

Corporate responsibility report

ARM is committed to implementing and developing best practice Corporate Responsibility (CR) in our market segment and intends to become a leader for CR in the sector.

ARM’s CR strategy encompasses accountability to all stakeholders, including employees and their families, providing excellent service to our Partners and shareholders, fostering good relationships with suppliers, on-going involvement with local communities and minimising our impact on the environment as well as designing energy efficient products. During 2010, ARM joined the United Nations Global Compact (UNGC), an initiative for businesses that are committed to aligning their operations and strategies in the areas of human rights, labour, environment and anti-corruption. In the year ARM took an active role by convening an IT Sector panel at the World Climate Summit and joined the UN Caring for Climate initiative. We also entered a partnership with the International Business Leaders’ Forum (IBLF) to explore how the better use of technology can reduce energy consumption and improve living standards globally.

ARM’s continued success has been achieved through the strength and depth of our stakeholder relationships. Our corporate governance framework and processes enable us to manage the Group effectively and to demonstrate transparent, consistent and effective governance so that we remain accountable to our shareholders, employees, partners, suppliers and the local, regional, and national communities we support and with whom we interact.

As part of our effort to improve stakeholder communications, we enhanced our CR Report in 2010 guided by the Global Reporting Initiative, the most widely used sustainability reporting structure, to aid transparency and consistency. To take this further, ARM is the one of the first companies to incorporate the UNGC’s 50-point Blueprint for Sustainability Leadership into its full 2010 CR Report which is available on our website at www.arm.com.

Employees

The welfare of ARM’s employees around the world is one of our top priorities. ARM’s Corporate Vision and its Management Charter include commitments to provide a sector-leading environment for employees to develop their personal and collective potential. The interests of employees and shareholders are aligned by providing equity participation to all employees through restricted shares under the Employee Equity Plan and the opportunity to buy shares through savings plans. When ARM’s quarterly results are published, members of the executive committee also present the same results internally. ARM also provides periodic question and answer sessions at each site led by an executive committee member where “no question is off limits”.

We have established a Global Equal Employment Opportunities policy covering the recruitment, transfer and promotion of staff as well as their training and development. At least once a year, employees and managers have a formal discussion on performance and development through the ARM Feedback and Development System. Training needs are tracked and delivered and progress is monitored through our Learning and Development team, ensuring that the Group’s skills base is increased in line with business needs and employees’ personal aspirations.

ARM provides a number of assistance and wellness programmes to employees and their families including private medical insurance, travel and life insurance, pensions/401k plans, sabbaticals, sick pay, holiday pay, employee counselling, flexible working, on-site physiotherapy and athletic training. ARM also offers family- friendly programmes such as maternity, paternity and parental leave, a child care voucher scheme in the UK and a flexible spending account in the US.

Employee consultation groups advise the Group on various issues that impact employees and a comprehensive global opinion survey is conducted every two years to monitor employees’ views and provide valuable input on internal operations. The focus of the 2010 survey was employee engagement, which is summarised on page 54.

All employees
by contract type

All employees by contract type

  • Established employees91%
  • External7%
  • Fixed term2%

Established employees
by region

Established employees by region

  • UK41%
  • US27%
  • India15%
  • Continental Europe11%
  • Far East/Asia6%

Established employees
by age group

Established employees by region

  • 21-3025%
  • 31-4042%
  • 41-5025%
  • 51-608%

Established employees
by gender

Established employees by region

  • Male83%
  • Female17%

Gender split of engineering graduates in the UK in 2010: 90% men, 10% women.

Employee global opinion survey – engagement 2010

Employee global opinion survey – engagement 2010

Ecosystem

ARM maintains continuous efforts to achieve class-leading levels of customer and ecosystem partner satisfaction, measured through regular surveys and feedback channels including an annual worldwide ARM Partner Meeting and ARM Technology Conferences held in India, Asia and the US.

As part of our commitment to the World Climate Summit, IBLF and UNGC we work continuously with our Partners to improve sustainability across the ecosystem. ARM collaborates with research and development organisations such as university science and engineering programmes worldwide. We also participate in EU-funded research to improve the efficient and responsible use of ARM- powered products.

Customers

ARM has built its business around a partnership model, working together with our customers to enable mutual success. Engagement with customers happens at many levels in the organisation, from the executive committee level, through sales, marketing and engineering. Customer satisfaction is monitored and reviewed by management to identify a range of key metrics to be monitored including: product and project delivery dates; product quality levels; customer support satisfaction and direct feedback gathered from customers and elsewhere in the ecosystem. The output is reviewed by management which, in turn, raises any pertinent issues with the executive committee.

Suppliers

As a Group which does not have any manufacturing operations, ARM has a limited number of suppliers. Central procurement functions were enhanced in 2010 and the introduction of new policies and procedures, with training workshops, have enabled ARM to standardise the procurement screening and feedback processes across the Group. This new procurement system has enabled the introduction of corporate responsibility requirements so that any new supplier must demonstrate that they have a compatible ethical policy in place. ARM’s sources its electricity from renewable energy suppliers wherever possible.

Surrounding communities

ARM undertakes many initiatives within the communities in which it functions. In 2010, ARM invested £2.5 million in an interest-free charitable bond for Cambridge-based social enterprise Future Business, to support a new incubation centre. The bond is the biggest philanthropic investment ever made by ARM. The investment was made because Future Business supports all four elements of ARM’s corporate giving policy: Clean Technology, Education, Entrepreneurship and the Local Community.

ARM’s University Programme helps the next generation of ARM engineers by donating equipment and software, assisting students, helping to design courses and providing technical support and training. ARM is involved in a number of STEM (science, technology, engineering and mathematics) programmes at regional schools, sharing employees’ expertise with students. From corporate philanthropy, to paid employee volunteer time, to the Matching Gift Donation programme, the Group actively encourages community involvement and support.

ARM is a founding member of The Learning Collaboration, enabling small and medium sized organisations around Cambridge to share their diverse experience and combine their buying power to purchase quality training and development services. ARM is also a founder of the Cambridge Network which links people from business and academia to the global high-tech community. This year, ARM partnered with The Humanitarian Centre to encourage research and partnerships that improve the efficacy of information technology in international development. ARM has also helped found the Cambridge Responsibility Forum, a joint venture between multiple local businesses to promote corporate responsibility and sustainability issues in Cambridge.

Team ARM, the Group’s global team building and fundraising employee network, raised over £93,000 for charities through sponsored cycle rides, marathons, boat races and even moustache growing.

Environment

An expanding global population, rising energy costs and climate change concerns are all driving renewed interest in energy efficiency. ARM’s technology is inherently low-power and enables smarter, more energy efficient products to be created. As ARM-designed chips are in over 20% of all digital electronic products sold in 2010, this presents an enormous opportunity for improved efficiency.

For 20 years, ARM’s research and development has focussed on getting the best processing performance from the least power. ARM technology allows partners to develop smarter digital electronic products that can measure, manage and improve the environmental performance of consumer electronics and IT equipment, reducing the carbon footprint for many consumer products.

ARM actively monitors energy usage, resource consumption, waste creation, suppliers’ environmental management systems and its own carbon footprint so that targets can be set for improvements that are realistic and meaningful.

ARM is improving its strategy for low carbon business operation, and has set goals of:

  • 30% emission reduction in tons of CO2 emission per employee by 2020; and
  • 15% energy use reduction measured in KW hours per employee by 2020.

These goals are also in line with the Environmental Issues Area of the UNGC. The goals are tracked monthly and reported to ARM management as well as stakeholders. We are also reviewing behavioural change issues relating to the adoption of existing video-conferencing facilities and are investing in more equipment with a view to reducing the number of flights per employee each year.

global team building

Conclusion

ARM makes good corporate citizenship a priority and external evaluators have recognised this. ARM is in the NASDAQ OMX CRD Global Sustainability 100 Index, demonstrating how corporate responsibility has been incorporated throughout the ARM way of business. CRD Analytics evaluated more than 3,000 global companies in order to establish these individual, quantitative ratings of sustainability. This section is intended to provide a brief overview; our full CR Report for 2010 is published on our website at www.arm.com.