"Could Whitbread’s bosses make a frothy cappuccino?" - that was Luke Johnson's title for his latest thought-provoking piece for the Sunday Times (read the full article here).
In his opinion piece, Johnson (Chairman Risk Capital Partners) expressed his frustration with some of the publicly listed hospitality companies, lamenting the fact that senior business leaders lack industry-specific experience. He asks himself "Who really holds the operational management to account?". Johnson says "One of my core beliefs about business success is that domain knowledge really matters. What I mean by this is that directors should possess a deep understanding of their industry, acquired through practical, hands-on experience [...] The board of Whitbread has 10 directors. Not one of the six non-executive directors has any previous experience working in the hotel, coffee shop or pub trade — which is what Whitbread’s business actually is. Nor do the chairman, the chief executive or the finance director".
Hotel Analyst's Katherine Doggrell reached out to AETHOS' Managing Director Chris Mumford, asking for his opinion on Whitbread's board composition. Mumford comments “At the risk of upsetting Johnson [...], in Whitbread’s defence they clearly recognise that the retail sector is one which has similar characteristics to their coffee-and-hotels business and yet which is different enough that ideas and experiences from that space can translate into their world. Hence a Chairman with extensive retail experience at Boots and Asda, a CFO from Dixons, board members who also sit on retail boards such as Tesco and Debenhams, as well as a property specialist. Furthermore far from showing ‘contempt for the tens of thousands of staff’, Whitbread should be applauded for its progressiveness in being one of the very, very few companies I know of where the group HR director has a seat on the board.”
Read more here.