Mario
Investment Analysis and Recommendation
Lester E. Downing
H210
Professor Finance
Les Roces-Gruyére University of Applied Sciences
Submitted August 15, 2010
Investment Analysis and Recommendation
Accor: Governance
Accor is an international hotel group with corporate headquarters located in Paris, France. The company is publicly traded on the French stock exchange, the CAC 40. One of the largest hotel groups in the world (Sharkey, 2009), Accor operates hotels throughout the world in the mid-to-upper market and provides prepaid services through a joint venture with MasterCard Europe. During the fiscal year 2009, the Group made a number of significant changes in its Board of Directors by reducing the board to twelve members and by combining the positions of Chairman and Chief Executive Officer (Accor, 2010a). Also in line with these measures to simplify the company’s corporate governance, the Group reduced the Executive Committee membership to eight members. The purpose of the streamlining was done with the aim to accelerate chains of command, improve the decision making process, and improve team responsiveness across the organization. Operations were also restructured with the creation of three operating divisions: Europe, the Middle East, and Africa; the Americas; and, Asia-Pacific (Accor, 2010a). Accor complies with the December, 2008, version of the AFEP-MEDEF Corporate Governance Code for listed companies (see Appendix A for a summary of the code). Based on the criteria of AFEP-MEDEF, Accor considers six of its current twelve directors to be independent. In accordance with Accor by-laws, Paul Dubrule and Gérard Pélisson, founding co-chairmen, attend board meetings in only a consultative capacity, and may be invited to attend meetings of Board Committees. The Audit and Risk Committee consists of five members of which three are considered to be independent. The Corporate Governance Committee also consists of five board members of which
Lester E. Downing
H210
Professor Finance
Les Roces-Gruyére University of Applied Sciences
Submitted August 15, 2010
Investment Analysis and Recommendation
Accor: Governance
Accor is an international hotel group with corporate headquarters located in Paris, France. The company is publicly traded on the French stock exchange, the CAC 40. One of the largest hotel groups in the world (Sharkey, 2009), Accor operates hotels throughout the world in the mid-to-upper market and provides prepaid services through a joint venture with MasterCard Europe. During the fiscal year 2009, the Group made a number of significant changes in its Board of Directors by reducing the board to twelve members and by combining the positions of Chairman and Chief Executive Officer (Accor, 2010a). Also in line with these measures to simplify the company’s corporate governance, the Group reduced the Executive Committee membership to eight members. The purpose of the streamlining was done with the aim to accelerate chains of command, improve the decision making process, and improve team responsiveness across the organization. Operations were also restructured with the creation of three operating divisions: Europe, the Middle East, and Africa; the Americas; and, Asia-Pacific (Accor, 2010a). Accor complies with the December, 2008, version of the AFEP-MEDEF Corporate Governance Code for listed companies (see Appendix A for a summary of the code). Based on the criteria of AFEP-MEDEF, Accor considers six of its current twelve directors to be independent. In accordance with Accor by-laws, Paul Dubrule and Gérard Pélisson, founding co-chairmen, attend board meetings in only a consultative capacity, and may be invited to attend meetings of Board Committees. The Audit and Risk Committee consists of five members of which three are considered to be independent. The Corporate Governance Committee also consists of five board members of which
References: Accor (2010a, May). 2009 Annual Report and Registration Document. Retrieved from http://www.accor.com/en/finance/financial-library/annual-report-and-registration-document.html Accor (2010b, April) Accor (2010c, March 23). Accor maps out Vietnam expansion. Retrieved from http://www.accor.com/fileadmin/user_upload/Contenus_Accor/Presse/Pressreleases/2010/EN/100323_PR_Accor_Vietnam_Development_EN.pdf Accor (2009, September 2) Accor (2007a, October 23). Accor Hospitality: the new hotel business model. Retrieved from http://www.accor.com/fileadmin/user_upload/Contenus_Accor/Finance/Documentation/EN/CP_ID_231007_DEFgb.pdf Accor (2007b, April) Bloomberg BusinessWeek (2010, July 18). Accor SA. Bloomberg.com. Retrieved from http://investing.businessweek.com/research/stocks/earnings/earnings.asp?ticker=AC:FP Bonds Online (2010, July 29) Digital Look (2010, July 29). Accor. Retrieved from http://www.digitallook.com/cgi- bin/dlmedia/security.cgi?csi=24976&ac=&username= Flatto, J. (2001, November). Using real options in project evaluation. The Magazine for Life Insurance Management Resource. Retrieved from http://www.puc-rio.br/marco.ind/loma96.html Foerster, S., & Sapp, S Marriott (2009). Annual Report. Marriott International, Inc. Retrieved from http://investor.shareholder.com/mar/reports.cfm Marriott (2008) Sharkey, G (2009, May 28). IHG remains the world’s largest hotel chain. caterersearch.com. Retrieved from http://www.caterersearch.com/Articles/2009/12/18/327923/IHG-remains-the-worlds-largest-hotel-chain.htm The Wall Street Journal (2010, July 30) U. S. Department of Agriculture, Economic Research Service (2010). Real historical GDPs for baseline countries and regions. Retrieved from www.ers.usda.gov/data/.../Data/HistoricalRealGDPValues.xls Vora, S Yahoo! Finance (2010a, July 17). Accor France. Retrieved from http://uk.finance.yahoo.com/q?s=AC.PA Yahoo! Finance (2010b, August 15) Yahoo! Finance (2010c, August 15). Hyatt Hotels. Retrieved from http://uk.finance.yahoo.com Yahoo! Finance (2010d, July 17) • has been an auditor of the corporation in the last five years; • has been a director of the corporation for more than twelve years (Association Française des Entreprises Privées & Mouvement des Entreprises de France, 2008, p