Unit 1
The Business Environment

The Business Environment

Aryaneil Frances G. Fernandez
801-1321-012

Lg Electronics Inc. is a South Korean multinational electronics company headquartered in Yeouido-dong, Seoul, and a member of the LG Group, employing 83,000 people working in 119 local subsidiaries worldwide. With 2013 global sales of USD 53.1 billion (KRW 58.14 trillion), the company operates its business through five divisions: Home Entertainment, Mobile Communication, Home Appliance, Air Conditioning and Energy Solution, and Vehicle Components, CEO of LG Electronics is Bon-joon Koo, who assumed the role of Vice Chairman of LG Electronics on 1 October 2010. In 2011, LG Electronics was the world’s second largest television manufacturer. Abu Dhabi Islamic Bank was established on 20 May 1997 as a Public Joint Stock Company through the Amiri Decree No.9 of 1997. The Bank commenced commercial operations on 11 November 1998, and was formally inaugurated by Abdullah Bin Zayed Al Nahyan, UAE Minister of Information and Culture on 18 April 1999. All contracts, operations and transactions are carried out in accordance with Islamic Shari’a principles. ADIB commenced its operations with a paid-up capital of One Billion Dirhams divided into hundred million shares, the value of each share being ten dirhams. The shares are quoted on the Abu Dhabi Securities Market. The founders of Abu Dhabi Islamic Banks hold 29% of its equity while the remaining 71% is held by approximately 100,000 shareholders. The founding shareholders of ADIB are: * Members of the Ruling Family * The Abu Dhabi Investment Authority ADIA Task 1
1a.

Vision
LG Electronics continues to pursue its 21st century vision of becoming a worldwide leader in digital-ensuring customer satisfaction through innovative products and superior service while aiming to rank among the world’s top three electronics, information, and telecommunications firms by 2010. On their way, they hold tight to a philosophy of “Great Company, Great People’s underscoring our belief that only great people can create a great company. LG strives for greatness in what we’ve identified as our three core capabilities: Product Leadership, Market Leadership, and People Leadership each strength a key part of realizing our growth strategies for “fast innovation and “fast growth”
Mission
To create value for customers, to respect human dignity and to become the best in its class by winning customer’s acclaim as a true leader in the global market.
Goals
* Become a worldwide leader in digital-ensuring customer satisfaction * Rank among the world’s top three electronics, information and telecommunications firms * Greatness in Product Leadership, Market Leadership, and People Leadership

Purpose
To make lives easier. Innovation for a better life.
Type of business LG Electronics Inc. is a South Korean multinational electronics company employing 83,000 people working in 119 local subsidiaries worldwide. The company operates its business through five divisions: Home Entertainment, Mobile Communications, Home Appliance, Air Conditioning and Energy Solution and Vehicle Components. LG Electronics was the world’s second-largest television manufacturer.

Vision To be the top tier Islamic financial services group.
Mission
Islamic financial solutions for the global community.
Goals
At ADIB, their goal is to make it easy to grow and preserve your wealth.
Purpose
ADIB is committed to being a responsible corporate citizen and to managing its business in a way that creates value for customers, shareholders, employees and communities in which it operates. Whether you’re a sophisticated investor or are looking for investment guidance, they will guide you through the wide range of investment products they offer to help you make the right decision for your future. The philosophy of ADIB is simple: they strongly believe in providing their clients with “Trusted Advice by a Trusted Advisor.” Their trained and certified team will work with you to understand your unique requirements and offer you tailor-made solutions to match your financial goals. All their dealings with you are completely transparent, their products and services have been designed to be easily understood. Type of business Abu Dhabi Islamic Bank is an Islamic bank based in Abu Dhabi. It is a Public Join Stock Company through the Amiri Decree No. 9 of 1997. The Bank commenced commercial operations on 11 November 1998, and was formally inaugurated by Abdullah Bin Zayed Al Nahyan. All contracts, operations and transactions are carried out in accordance with Islamic Shari’a principles.

1b.

NGOs / International Organizations LGE includes NGOs and international organizations in the planning and execution of a wide range of CSR activities.
They are to reduce green house gas, participate in tackling global social issues and support them, contribute to achieving MDGs, contribute to labor / human rights protection in developing countries, and they bridge the digital divide. They communicate through seminars, discussion meetings, community contribution activities and websites. NGOs keeps the company on ground about their products. When the company produces a product, they’re also concerned about how it could affect the people or the environment. It doesn’t just create a good product, it also creates the company’s trademark.
Customers
Based on the corporate management philosophy of “ Creating Value for Customer”, LGE has made relentless efforts to satisfy all customers throughout the world. As a result, the company was able to achieve consolidated revenue of approximately KRW 55,753.8 billion for fiscal year 2010. Revenue from North America accounted for 26% of the total revenue, Europe 18%, Korea 13%, and Central and South America 12%. The company is maintaining to provide safe product and service, practice fair marketing and provide accurate information, privacy protection and to provide customer satisfaction.
The company connects to customer through their service center, surveys, exhibition, websites, blogs, and prosumers
What’s a company without the consumers? LGE always gives huge importance to the customers. They don’t just give the people high-quality products, they also give the people the feeling of being safe in the company. The convenience, the company’s staff’s open mindedness and utmost care toward their beloved customers
Suppliers
As of December 2010, LGE had a total of 5,800 suppliers and spent a total of 35.9 billion USD in direct and indirect material procurement. The company expects fair trade, timely payment, and support suppliers’ CSR activities. The company connects to the suppliers through Supplier Portals, Satisfaction Surveys, Proposal System, Fund and Programs for Supporting Suppliers and Global Supplier’s Day The suppliers are the company’s rock. That simple. Without them, LGE wouldn’t have created its fine TVs, mobile phones and a variety of appliances and electronic devices.
Shareholders / Investors As of year-end 2010, there were a total of 141,725 shareholders with the holding company, LG Corp, accounting for 34.8%, domestic institution and individual investors accounting for 31.4%, and foreign investors accounting for 33.8%. market capitalization, including preferred stock; equals KRW 17,822 billion, where common stock market capitalization is KRW 17,068.4 billion). The company is anticipating to disclose transparent management information, increase investment values though efficient management, improve corporate values through CSR activities. The company keeps in touch with the shareholders and investors through general shareholders’ meetings, performance presentations, investor conference, websites, management report, and business reports

The shareholders help the company expand until it became known worldwide. The company gives a huge credit to it’s shareholders for helping them expand until it spread out to the whole world.
Communities
In addition to operations in Korea, LGE is doing business though an overseas network. Local purchases represent approximately 50% of the corporate’s entire purchase volume. The company aims to minimize environmental effects near factories, respect the culture and tradition of local communities, promote contributions to local communities, and to contribte to the local economy by hiring local employees The company reaches out to the community by community care activities, sports sponsorships, discussion meetings and websites. The communities remind the company to always look back to where it came from when things get too competent. The community reminds them that ranking number is nothing if they do everything unfairly. Nothing compares to safe and humble but high-quality products.
Employees
LGE employed a total of 90,578 of which 31,840 work in Korea and 58,738 in overseas offices. this implies that the number of employees increased by 9,442 year-on-year. Approximately 64.8% of the total employees are either sojourning employees or hired locally. LGE calls for the protection of human rights and respecting diversity, fair evaluation and reward, providing opportunities for career development, ensuring safety at worksite, making efforts to improve the corporate culture. LGE bridges to employees through open communication, labor-management conferences, in-house newspapers, intranet, news letter, and LG way survey. The company is literally nothing without its employees. The employees help the company maintain and reach its goals. They keep things under control and each and every department is equally important because without one of them, the company falls apart. So LGE is very thankful they have a strong workforce.

Central and Local Governments LGE complies with local laws and regulations and meets tax obligations in all 120 countries where the Company engages in business. the company also cooperates with the government and universities in each country to develop local specialty products. The company insist on complying to laws and regulations tax remittance, and to cooperate with government policies LGE conveys to central and local governments through public hearings, discussion meetings, and seminars The central and local governments keep the company orderly. Without its laws and regulations, the company won’t be able to know how to reach to its local people without offending or over stepping into their rights. The company will fail in a certain country if they have no clue how to adapt with the community.

Shareholders / Investors

In ADIB, you know your money is in good hands because it’s never stolen or tapped. The citizens of UAE own a very huge percentage just as big as Emirates International Investment Co. LLC. Senior citizens are also one of the shareholders in ADIB which is good.
Staff
ADIB takes pride in helping its employees shape the future direction of their careers, giving them the due support they deserve in the process. Managers are committed to implementing policies that promote work-life balance and that encourage a positive working environment and communication where work-life issues can be freely discussed. These policies include flexible working hours; paid maternity and paternity leave; generous paid annual leave and holiday allowance and special leave on as needed basis. The bank benchmarks its engagement by undertaking regular employee satisfaction surveys, which act as a valuable feedback mechanism for its policies and practices. ADIB also communicates new developments at the bank frequently through newsletters and intranet, while management encourages two-way communication through town hall meeting and other employee events. According to Elton Mayo’s theory, the best way to your company’s success is through your employees. If you keep them comfortable and give them as much as they need for the job; security, fair treatment and a good work environment, they will surely take you to places.
Community
Among the milestones in ADIB’s community outreach program in 2014 was the donation of a new mosque to the citizens of Fujairah. The Omar Bin Al Khatab mosque, which opened to worshippers in November, was developed in close consultation with the General Authority of Islamic Affairs and Endowments and will serve as a focal point of the community’s religious life. ADIB doesn’t forget about its responsibility to the community. It built a mosque that accommodates 1,500 male and 150 female worshippers as well as residences for the Imam. Well, you know what they say: “ Give and you will receive a thousand fold”.
Customers
ADIB’s 775,000 customers are of the utmost importance to the bank, and consistently offering the highest standards of care and service is its primary focus. ADIB strives to serve its customers in a responsible manner, ensuring its services are readily accessible and supporting clients through difficult periods. ADIB is committed to helping people who face financial difficulties, and has developed a number of products and solutions designed to help control repayment demands and restore families to financial health. In banking, its always critical about your customers. They choose their banks wisely because of many reasons. With a bank like ADIB, its customers never feel doubtful because of its excellent service and they treat each and every one of their customers with utmost care. They don’t discourage customers having financial difficulties but they help them instead.

1c.

Board of Directors
Following the launch of the holding company, LG Corp., LG Electronics operates under an advanced corporate governance structure that comprises a professional administrator and a Board of Directors.
This structure helps us deploy more transparent, value-creating management activities that help increase corporate and shareholder value.

Bon-Joon Koo assumed the role of Vice Chairman of LG Electronics on October 1, 2010. Born in 1951, Mr. Koo is the grandson of In-Hwoi Koo, the founder of the LG Group. Mr. Koo has nearly a quarter of a century of experience working for various LG companies. Prior to his appointment to Vice Chairman of LG Electronics, Mr. Koo serves as the Vice Chairman and CEO of LG International. From 1999 to 2006, Mr. Koo created and led the joint venture LG Philips LCD, which became LG Display in 2008. He set the stage for LG Display to become the leading global LCD manufacturer that is today. Earlier in his career, Mr. Koo held various executive roles overseeing semiconductors, PCs, IT and chemicals. He returned to LG Electronics where he worked from 1986 to 1995 across a range of business areas. Mr. Koo graduated from Seoul National University in 1978 with a degree in computational statistics and received his MBA from the University of Chicago Booth School of Business.

Yu-Sig Kang
Vice Chairman of LG Management Development Institute, Non-Executive Director

Yu-Sig Kang
Vice Chairman of LG Management Development Institute, Non-Executive Director Do-Hyun Jung
Representative Director CFO LG Electronics (President), Inside Director

Do-Hyun Jung
Representative Director CFO LG Electronics (President), Inside Director

Chong-Nam Chu
Professor Seoul National University Outside Director, Audit Committee

Chong-Nam Chu
Professor Seoul National University Outside Director, Audit Committee

Chang-Woo Lee
Professor Seoul National University Outside Director, Audit Committee

Chang-Woo Lee
Professor Seoul National University Outside Director, Audit Committee

Joon-Keun Choi
Outside Director of JB Financial Group, Outside Director, Audit Committee

Joon-Keun Choi
Outside Director of JB Financial Group, Outside Director, Audit Committee

Man-Pyo Hong
Lawyer
Outside Director

Man-Pyo Hong
Lawyer
Outside Director

Management System When LG Electronics removes the Circulating Investment Structure of its affiliated companies (through the launch of a holding company system), this enabled the holding company to take full charge of investments. Consequently, LG Electronics has been able to focus on its own businesses while increasing thee overall value of the Company. This corporate governance structure has laid the groundwork for increasing managerial transparency. Through a responsible management system compromising of the CEO of LG Electronics and a Board of Directors, we are taking huge steps in strengthening our competitiveness at both the domestic and international level, in order to maximize corporate and shareholder value.
Evaluation and Compensation Compensation for thee BOD members is made within regulations pertaining to BOD compensation that has been approved at the General Shareholder’s Meeting. The evaluation of management and executives are evaluated to determine whether have set and achieved challenging goals, whether their job objectives composed of quantitative and non-quantitative factors were achieved, as well as their capability through fair and objective process, and appropriate compensation corresponding to the outcome of the evaluation is determined.

Chairman

H.E. Jawaan Awaidha Suhai Al Khaili
Board Members

H.E. Khamis Buharoon
Khamis Mohammed Buharoon was appointed as Board Member of Abu Dhabi Islamic Bank (ADIB) after holding various leadership positions for more than 20 years in the banking sector and finance sector.
Khamis is also the Executive Chairman of Burooj Properties – Abu Dhabi and Vice Chariman of Abu Dhabi National Takaful Company and Chairman of Abu Dhabi Islamic Financial Services Company which all are part of the Abu Dhabi Islamic Bank Group.
In addition to his role in Abu Dhabi Islamic Bank Group, Khamis is currently holding various positions in the UAE and the region including : Board Member in Abu Dhabi National Hotels Company, Board Member of the Emirates Institute for Banking and Financial Studies and its Human Resources Committee, Board Member in Arqaam company, a Banking Expert accredited by the Courts in the United Arab Emirates and Board Member of the General Council for Islamic Banks and Financial Institutions.
He had helped establishing prominent businesses and institutions through leading positions such as Board Member of the RAK Chamber of Commerce and Industry, Board Member of Emirates – Jordan Investment Company, Chairman of Abu Dhabi National Leasing Company; he was also a Board Member of CEMEA VISA International.
Khamis Buharoon began his career in 1987 as Accountant and Auditor in the UAE Central Bank and moved on to become Assistant Director of Finance Division and the Assistant Director of the Internal Audit Division at the UAE Central Bank. He joined after that First Gulf Bank where he held the position of General Auditor and later on he was appointed as the Head of Domestic Banking in National Bank of Abu Dhabi.
Mr. Khamis Buharoon was borin in the United Arab Emirates in 1964, and he has a B.A. in Business and Accounting.

H.E. Juma Khamis Al Khaili
Juma Khamis Mugheer Al Khaili was appointed member of the Board of Abu Dhabi Islamic Bank on 19 April 2004.
Juma is a Member of the Boards of ADIC and AGTHIA Group in the UAE. He is also Board Member at the General Holding Corporation. Arab International Bank and the Joint Administration, Investment and Scholarship Committees at ADIA and Chairman of the Audit Committees in most companies he is involved with.
Juma’s executive responsibilities include the setting up of the newly created Investments Services Department at ADIA as Executive Director.
Juma holds a Bachelor of Business Administration degree from George Washington University, US, and has completed a General Manager Program from the Harvard Business School in 2006.

Ragheed Najeeb Shanti
Ragheed Najeeb Shanti was appointed member of the Board of Abu Dhabi Islamic Bank on 26 April 2007.
Ragheed Najeeb Shanti was earlier Managing Directot, Head of Investment Banking, Middle East and Africa at ABN Amro Bank, a post he held from 2004 to 2007. He joined ABN Amro Bank in 2000 and worked at the bank’s offices in London and New York overseeing various operations in Latin America, Central and Eastern Europe and Middle East and Africa.
Ragheed holds an MBA in Finance from the University of Texas at Austin where he was the Sord scholar on full scholarship in 1987. He also completed MS in Construction Management there in 1985 on full scholarship. Dr. Sami Ali AL Amri
Dr. Sami H. Ali Al Amri was appointed Member of the Board of Directors of Abu Dhabi Islamic Bank on 23rd March 2009.
Dr. Sami was responsible for re-establishing Ernst & Young’s Iraq office and making it operational. His industry includes the oil & gas sector in addition to banking and finance.
Dr. Sami holds a Doctorate from City University Business School, UK and an MBA from the International University. He is a fellow of the Institute of Business Consulting and a Certified Management Consultant from the UK.