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AETHOS Releases Corporate Governing Practices Report

AETHOS Releases Corporate Governing Practices Report

According to AETHOS Consulting Group, a global hospitality advisory firm, the best corporate board in the hospitality industry belonged to Ryman Entertainment. Results of the annual survey are delineated in the AETHOS 2016 Corporate Governing Practices report. A total of 54 national and international companies were carefully studied for this year’s survey.

The study examines five key areas of corporate governance, including board makeup, independence, committee structure, and pay-for-performance, in determining a governance score for each company.

“Ryman Entertainment made a big push to the top spot this year with solid marks in every category of our study,” says Keith Kefgen, CEO and managing director of AETHOS, author of the Report. “Newcomers to the list such as InterContinental Hotels Group and Sun International demonstrate that corporate governance is not just a US-focused issue, but a truly international one.”

Kefgen continues, “2016 was a watershed year in corporate governance, with major initiatives in say-on-pay, share ownership requirements, director evaluation, and transparency. The hospitality industry continues to make significant strides in each one of these areas.”

Notable findings of the AETHOS Corporate Governing report include: Of the 54 hospitality companies studied, not one scored perfectly in the area of board size. In fact, 16 companies have their CEO holding the Chairman seat—not an AETHOS-recommended best practice. Most companies have a process of evaluating board performance, with governance committees taking this more seriously. These boards had a policy of the number of boards on which their directors could sit, and minimum requirements for attendance. Regarding board communication, almost all companies had formal policies regarding how to communicate with their board. In addition, boards spoke more openly about having access to management and a more active role in strategy.

“As it relates to compensation, 16 companies received a full score of 10 points,” adds Kefgen. “This is a positive sign as companies put more emphasis on “pay at risk’ and more importantly, tie pay to meaningful metrics of performance.”

For an overview of the total scores and the top-performing boards, please click here.

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