by Chris Mumford & Thomas Mielke
December 2012

The financial crisis, and the ensuing economic downturn, has illustrated the impact the business world can have on the daily lives of ordinary people. Whether it be a bank going under or Hostess Brands going bust and depriving the world of Twinkies, the man in the street is feeling the pain. It is human nature to want to understand why something goes wrong more than to comprehend why something goes right. The media helps feed this desire by ignoring the positive good that entrepreneurism and corporate growth does for our society, preferring to focus on exposing instances of foul play, corruption, and corporate greed. In today’s high tech age where transparency is such a high valued commodity and where information can be distributed so quickly, the business world is finding itself under the level of scrutiny once reserved for the political world.

Politicians are familiar with the expectations placed on them by the voting public in terms of moral standing and ethical practices. And, if they were not already, then cases such as the British MP expenses scandal or the sexual goings-on at the top of the French political establishment , have made them aware that there is no place to hide. There is also a demand placed on politicians to be ‘relevant’, to be ‘in touch’ with the people. Leaders of publicly listed companies are today facing a similar examination that does not stop at business affairs but also probes into personal lives. A CEO of a public company can expect to find himself/herself in the papers, and subsequently be forced to resign for any number of issues: sexual orientation, exposure of an affair with an employee, ‘excessive’ bonus, illness.

Shareholder discontent has a stronger voice than in the past, especially on contentious topics such as executive pay, and companies are having to demonstrate that its leadership, its governance, is ‘in touch’. The board of directors of a listed company is intended in part to act as the check and balance to what the people running the company day-to-day are doing. The spotlight therefore falls not only on the executives of a company but also on the non-executive directors and the last 10 years of improving corporate governance practice have seen a hefty increase in the responsibility and accountability borne by board members. The traditional image of a boardroom resembling a fusty old boy’s club is thankfully fading fast but how ‘in touch’ with modern society have boards become?

The HVS European Hotel Board of Directors Study
The European Hotel Board of Directors study conducted each year by HVS Executive Search reviews the performance of boards at publicly quoted hotel companies in Europe. Applying a proprietary corporate governance model, HVS Executive Search reviews board makeup, independence, committee structure, effectiveness, conflicts of interest, and executive and non-executive pay and reward. This year we have evaluated additional criteria concerning the actual individuals holding board seats. In particular we assessed the representation of women on boards, a topical issue across all industry sectors, and also looked at the demographics of board members with an emphasis on non-executives and whether or not they hold a current executive post elsewhere.

Congratulations to Whitbread on regaining its 2009 position as the top performing hotel board of directors in Europe. The annual HVS Executive Search study also finds that Club Med had made great strides to improve its ranking from 5th to 2nd while last year’s winner, InterContinental Hotels Group slid to joint third alongside Accor. The big winners however were women. The drive to have greater representation of women on company boards, across all industry sectors, appears to be having an effect. The average number of women on the board of a publicly traded hotel company in Europe increased by 32% in 2011 over 2010.


About Thomas Mielke
Thomas Mielke is a Senior Associate at HVS Executive Search in London. Since joining the firm in 2008, Thomas has worked on assignments across the EMEA region and has successfully placed senior executives at leading hospitality companies including Starwood Hotels & Resorts, Hilton Worldwide and Invesco Real Estate. Thomas is a fully certified executive search consultant and a member of the AESC and has assisted clients with searches ranging in functional expertise from real estate and asset management to technical services and brand management. He is the co-author of HVS’s annual European Corporate Governance Study and also helped institute HVS’s annual review of CEO turnover at the 50 largest hotel companies in the world. Prior to joining HVS, Thomas spent several years working in Germany and Spain, including with Jones Lang LaSalle focusing on hotel market studies and research publications. Born in Spain and of Swiss-German origins, Thomas is fluent in German, Spanish, French and English. He graduated from Ecole hôtelière de Lausanne and holds a Bachelor of Science in International Hospitality Management with a specialisation in Resort and Leisure Development.


About Chris Mumford
Chris Mumford is Managing Director of HVS Executive Search in London and specializes in executive search and compensation consulting for clients in the hospitality industry throughout Europe, the Middle East and Africa. A regular speaker on hospitality related issues, Chris is a frequent contributor to a number of industry publications on executive selection, compensation trends, leadership and general Human Resources topics.

About HVS Executive Search
HVS Executive Search is a premier executive search and advisory firm providing consulting services to leaders of the hotel, restaurant, gaming and real estate industries. Practice areas include senior-level executive search, mid-management recruitment, compensation consulting and performance management. The company’s offices are located in New York, London, Hong Kong, Moscow, Mumbai and New Delhi.

HVS Executive Search is a division of HVS, a fully integrated consulting firm focused on the hospitality industry. Founded in 1980, HVS is the world's leading specialist in hospitality consulting. With 30 offices globally, HVS offers unparalleled worldwide market expertise.
www.hvs-executivesearch.com.