Corporate Governance And M&A Activity in Hospitality: Boards, Shareholders And (Potential) Conflicts of Interest
September 12, 2016 10:35am
By: Thomas Mielke | Andrew Hazelton
Consequences of M&A activity in the hospitality industry are increasingly making headlines, fuelled by a greater complexity of owning- and operating structures and an ever larger number of international stakeholders… What are the best practices to protect oneself from unwanted consequences?
Earlier in the year, third party owners and franchisees raised their voices about the Starwood-Marriott USD $12.2 billion merger. They challenged the firms on the potential violation of their exclusivity agreements (prohibiting the brand-partner to own, manage, operate or franchise other hotels within a certain geographic parameter). M&A activity will not be phased by such temporary “set-backs” as evident by the continued consolidation that the industry is witnessing. Yet, there will always be parties that feel they “drew the short straw”… Merger challenge litigation is thus likely to increase – so what is the Board of Directors to do to protect their businesses and shareholder value?
The “Case Files”
In the recent past, the hospitality industry has witnessed very public shareholder disagreements concerning M&A activity involving global players in the sector – let’s look at some “case files”:
Protective Actions by the Board of Directors
The world is an increasingly smaller place to conduct business in – hospitality organizations are (becoming) global players and their development and investment partners are continuing to geographically diversify their interests. It is therefore not surprising that there is a greater number of potential conflicts of interest to arise. Yet, the at times Hollywood-esque and very public “shareholder fights” certainly do no good to any party involved in a take-over or potential merger situation. It is the board’s responsibility to ensure a “smooth transition” from a corporate governance point of view – one should make sure to have those boxes checked. A reminder on sound corporate governance best practices and appropriate board structures can be found here whilst the below bullet points highlight some of the obvious but often forgotten facts to:
This article was originally published in Hotels Magazine.
Tags: thomas mielke,
aethos consulting group,
As a founding partner of AETHOS Consulting Group, Thomas has a track record in successfully placing senior executives at leading hospitality companies across the EMEA region. He is an AESC certified consultant and is working together with travel wholesalers, real estate development firms, investment companies and sovereign wealth funds as well as leading restaurant brands in identifying key talent and has joined forces with clients in establishing compensation schemes as well as organisational structures and workflows.
Contact: Thomas Mielke
+44 (20) 7065-1392
Andrew Hazelton is Managing Director at AETHOS Consulting Group. An experienced recruitment consultant, he has over a decade of retained executive search experience in a variety of industries, including hotel, restaurant, gaming, real estate, finance, and technology. Prior to joining AETHOS Consulting Group Andrew was with HVS Executive Search and spent six years with Korn/Ferry International. Throughout his career he has been responsible for completing a number of C-suite searches globally. He has authored a number of articles on executive selection, general HR trends and compensation for the hospitality industry. Andrew is a graduate of The Pennsylvania State University, an active alumni member, and a member of the Penn State Hotel and Restaurant Society.
Contact: Andrew Hazelton
+1 (267) 462 4455
Talking Environmental Psychology and Guest Experience with Aesthetics Expert Elizabeth Weiner
NIMBYism: The Most Significant Cultural Threat for our Industry in 2018
Why ‘Heart and Soul’ Is Also a Strength in Leadership
The “TRICK” to Navigating the Turbulent Seas of Transition: Traditional Lodging Makes Waves on the High Seas, Part II
Traditional Lodging Makes Waves on the High Seas
CEO Pay in Gaming: Founders vs Corporate Executives
Excuses are For Losers: Leadership Involves Pressure and Personal Sacrifice
AETHOS and 20|20 AssessSM Call for Participants in a Recruiting Game-Changer: Identifying Employees with the “X Factor”
AETHOS and 20|20 Assess℠ Launch Global Psychometric Study to Identify Elusive "Hospitality X-Factor"
Entrepreneurs’ Corner: In Conversation With Nikolai Jaeger, An Innovative Modular Hotel Real Estate Developer
Isn’t “Success” the Ultimate Sign of a True Leader?
The Uberisation of Employment
Introducing the “FAIR” Interview – Four Traits Critical for Success in a Meritocracy
Introducing the “Psychometric SWOT” Exercise for Effective Team Development
Are Robots and Artificial Intelligence Real-Life Threats to Humans and Their Jobs?
Hasn’t the “Great Man or Woman” Leader Profile Been Debunked as a Myth?
AETHOS Consulting Group Releases Corporate Governing Practices Report: Insights on Hospitality Governance in an Ever-Changing Political Landscape
Corporate Governance in the Hospitality and Gaming Sectors in a Changing Political Landscape
Leadership; "Debunking a Myth" & "The Importance of Communication"
The Sad Side of Valentine’s Day – What the Hospitality Industry Should Know
Please login or register to post a comment.