...Hermes Fund Management It would be ludicrous to say that institutional investors have no say in the chain of corporate governance, even at the level of strategy. Institutional investors like mutual funds act in the interest of many smaller investors who are seeking low-risk investment. They have the right to influence strategy and to threaten to take their business elsewhere if they are not satisfied, and they usually hold a substantial interest in companies like Hermes. However, institutional investors are beholden to all of their investors in turn, and those people have a range of expectations both in terms of ethics and their investment goals. It is true that the people that the institutional investors represent in turn authorized them to make decisions with their money, but the general rule should be that institutional investors should avoid trying to change a company’s policies or strategies too much, lest they kill the goose that laid the golden egg. That having been said, institutional investors are an important short-circuit on companies, because institutional investors often have longer-term aspirations and thus will stop short-term profit grabs. However, Hermes’ stance justifies interference in Total’s operations in a few ways. First, note that Total’s decision, no matter what it ultimately decides, would not be illegal. Since it would violate no laws by attempting to exert influence over Total, Hermes simply has to decide if it would be best for its own internal...
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...Hermes Fund Management Dr. Okan Geray 1. Is the role of institutional investors to influence the strategy of companies in which they invest? Yes, they are influence on the strategy for the company * Institutional investors are in a unique position to exercise influence over companies and to hold them accountable for good governance. Given the typically significant stake they hold, they have the ability to demand meetings with the senior management of companies, challenge them on issues of concern, discuss strategies for achieving the companies’ goals and objectives and be the leading voice of shareholders in demanding corrective action when wrongdoing occurs. * Thus institutional investors have a critical and proactive role to play in the governance of companies. They have better access to information and possess the resources to build the necessary monitoring Capabilities. Given their unique position of influence, there is a need to priorities their leadership role in governance. * Institutional investors are professional investors who act on behalf of beneficiaries, such as individual Savers or pension fund members, the categories of institutional investors are wide and can include Collective investment vehicles, which pool the savings of many, and licensed fund managers to whom these funds are allocated. * Hermes is a UK independent fund manager investing approximately £36 billion on behalf of over 100 clients, including pension funds, insurance...
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...investor and a public company forms the experimental setting of the report. The government exists as the regulating authority for the different players in the market, however, the players at times deviate from the blueprint set out by the regulating authority because of the changing circumstances. (Drucker 2011, p. 107). The report analyses the different postures that an institutional investor assumes, depending on the situation at hand. The report also examines the reasons behind activist investing and establishes that an institutional investor is quite ambitious in her quest. The reason behind this is the high expectations of the contributors who have entrusted the institution with their funds. The report goes further to apply its own finding in analyzing the relationship between Hermes and Total and arrives at the conclusion that the former should go ahead in pressuring the latter to offer a level of accountability that reflects their expectations. In a nutshell, the report proposes that an institutional investor should be actively involved in the strategy process of the company that they invest in (Drucker 2011, p. 107). Table of Contents Executive Summary 1 Summary of recommendations 3 Introduction and brief history 4 Strategic audit 5 Consultants report: Equipment 7 Management and planning 7 Consultant's Report: Services 9 Managing Finance 9 Issues and alternatives for the future 10 Information 11 Reference list 12 Summary of recommendations ...
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...Luxury Wars-LVMH vs. Hermes” case study 1. Hermès International was a family-owned business for many years. Why did it then list its shares on a public market? What risks and rewards come from a public listing? It listed its shares on a public market in order to support the long term development of the company as a larger number of potential buyers will be able to invest and help the company grow. It also makes shares easier to trade by the shareholders. There are several risks which come from public listing such as; the need for added disclosure for investors. Public companies are regulated by the Securities Exchange Act of 1934 in regard to periodic financial reporting, which may be difficult for newer public companies. They must also meet other rules and regulations that are monitored by the Securities and Exchange Commission (SEC). Public companies also are faced with the added pressure of the market which may cause them to focus more on short-term results rather than long-term growth. The actions of the company's management also become increasingly scrutinized as investors constantly look for rising profits. This may lead management to perform somewhat questionable practices in order to boost earnings. There are also many advantages for a company going public. The financial benefit in the form of raising capital is the most distinct advantage, this capital can be used by the company to fund research and development alongside capital expenditure. Subsequently...
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...Introduction LVMH Moët Hennessy–Louis Vuitton SA, better known as LVMH (or the "Company"), is a French multinational group, which owns more than 60 prestigious brands around the globe. The group has its headquarters in Paris, and it is chaired by Bernard Arnault. The LVMH group was founded in 1987 as a result of the merger between Moët Hennessy and Louis Vuitton, which served to create the world leader in luxury goods. LVMH inherited a long history, and brings together noble professions, with deeply rooted traditions and a unique combination of internationally renowned brands. The activity of LVMH is mainly focused in luxury industry and its spectrum of products is divided into five generic fields (and their most recognised respective brands): * Wines & Spirits: Veuve Clicquot, Krug, Château d’Yquem, Château Cheval Blanc, Belvedere, Glenmorangie, Newton Vineyards and Numanthia Termes; * Fashion & Leather Goods: Louis Vuitton, Fendi, Donna Karan New York, Céline, Loewe, Givenchy, Kenzo, Thomas Pink, Berluti, Pucci; * Perfumes & Cosmetics: Parfums Christian Dior, Guerlain, Parfums Givenchy, Make Up For Ever, Benefit Cosmetics, Fresh and Acqua di Parma; * Watches & Jewellery: Bulgari, TAG Heuer, Zenith, Hublot, Chaumet and Fred; * Selective Retailing: DFS Galleria, Sephora, Le Bon Marché, Ile de Beauté and Ole Henriksen; Due to its brand development strategy, and the expansion of its international retail network (more than 3,000 stores...
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...S w LOUIS VUITTON1 Manu Mahbubani wrote this case under the supervision of Professor Mary Crossan solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2013, Richard Ivey School of Business Foundation Version: 2013-04-04 SYNOPSIS Moët Hennessy Louis Vuitton (LVMH) enjoyed double digit growth and healthy profitability in 2010 and 2011. A large part of this growth had been driven by its flagship group Louis Vuitton (LV). In 2011, LVMH announced that long-time LV CEO Yves Carcelle would be replaced at the end of 2012 by Jordi Constans, an executive from the French food product multinational Danone SA. However, after serving less than a month, Constans was replaced in December 2012 by Michael Burke, an LVMH insider who had been with the...
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...A Case Study of Gary Halper Menswear Limited Decision Dilemma Name Institution Gary Halper Menswear Limited Case Study The Company The company is a medium- sized manufacturer of high-quality men’s jackets and suits in Canada. It is also known as GHM, established in 1995 by Garry Halper, who is the Chairman and President, using proceeds he got as an inheritance. In particular, it is located in Montreal, Canada in a 15 years leased premises and manufactures men’s suits and jackets for both the local and international markets. Garry has twenty-five full-time employees that include management, buyers, designers, salespeople, and shippers. The senior management comprises of Jenny Chang and Raj Benninga, who are the marketing and operation managers respectively. Moreover, in the top office is Mathew Moriarty, the treasurer of the company. Garry Halper directly supervises all stages of jacket and suit designing, with a keen interest in quality material and super quality products. GHM primary market target for its $350 to $600 retail range suits are white-collar male, who view it as a reasonable price compared to market competitors. It sells a large portion of its clothes to 48 Canadian retailers. The remaining is exported to 11 USA retail stores and an Italian customer. The company’s principal finance partner has been Metropolitan Bank, Euler Hermes America Identity, is its insurance entity. More important the company outsources Canadian buttons, zippers, thread, and fabric...
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...Department of Real Estate and Construction Management Real Estate Management Thesis no. 91 Master of Science, 30 credits How to apply microfinance activities in the developed world - a case study in New York City Author: Sofia Bredberg Sara Ek Stockholm 2011 Supervisor: Han-Suck Song Master of Science thesis Title How to apply microfinance activities in the developed world – a case study in New York City Sofia Bredbeg & Sara Ek Real Estate and Construction Management Han-Suck Song Microfinance, poverty alleviation, financial sustainability, developed world, microfinance programs, empowerment, Grameen America, Acción USA, Project Enterprise Authors Department Master Thesis number Supervisor Keywords Abstract This study strives to examine how microfinance activities can be successfully applied in the developed world. This is done through a field study in New York City. Throughout interviews and observations with three of the largest actors in New York: Acción USA, Grameen America and Project Enterprise, as well as interviews with their clients, the lending processes and key characteristics of the organizations have been mapped. Furthermore, the Federal Reserve Bank of New York has been interviewed on the general opinion of microfinance in the US. Previous theory elaborates on some of the major challenges with implementing microfinance activities in the developed world, such as lack of funding and cultural differences hindering the lending processes to...
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...Export Credit Insurance: A literature review Name: Jordi van Dijk, ANR number: 361473 Course: Finance for Premasters 1 INTRODUCTION 1.1 INTRODUCTION 1.2 RESEARCH QUESTIONS 1.3 INDUSTRIAL REVOLUTION AND INTERNATIONAL TRADE 1.4 RELATION CREDIT INSURERS AND OPEN ACCOUNT TRANSACTIONS 3 3 3 3 4 2 BUSINESS ON OPEN ACCOUNT: WHAT ARE THE REASONS? 2.1 TRADE CREDIT INSTEAD OF BANK LOANS 2.2 TRADE CREDIT AS A SECURITY 2.3 TRADE CREDIT AS A SUBSTITUTE OF BANK LOANS 4 4 4 5 3 THE RISE OF EXPORT CREDIT INSURANCE 3.1 UNITED KINGDOM INITIATOR OF EXPORT CREDIT INSURANCE 3.2 HISTORY OF EXPORT CREDIT INSURANCE IN THE U.S. 3.3 THE RISE OF PRIVATE CREDIT INSURERS 5 5 6 7 4 CREDIT INSURANCE AND OTHER CREDIT RISK MITIGATION TECHNIQUES 4.1 AVAILABLE COVERAGE’S IN THE CREDIT INSURANCE MARKET OF THE NETHERLANDS 4.1.1 Commercial risk 4.1.2 Political risk 4.1.3 Fabrications risk 4.2 INTRODUCTION OTHER TECHNIQUES TO MITIGATE CREDIT RISKS 4.2.1 Letters of ...
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...Manual of Corporate Governance SEC Securities and Exchange Commission of Pakistan This manual is for reference only and does not constitute any legal requirement on companies, their officers, directors or auditors. This manual may be used for guidance and compliance must be ensured with the provisions of applicable laws and regulations. CONTENTS I. II. INTRODUCTION WHAT IS CORPORATE GOVERNANCE? (i) The Background (ii) Definition of Corporate Governance (iii) The Benefits of Corporate Governance (iv) The Pakistani Corporation (v) The Origins of Corporate Governance in Pakistan THE NEED FOR CORPORATE GOVERNANCE THE STAKEHOLDERS (i) General (ii) Shareholders (iii) Directors (iv) Employees (v) Creditors PROMOTING REFORM AND SHAREHOLDER ACTIVISM ROLE AND RESPONSIBILITIES OF DIRECTORS AND MANAGERS (i) Directors and Managers Distinguished (ii) Appointment and Proceedings of Directors (iii) Fiduciary Duties (iv) Powers and Responsibilities of Directors (v) Liability of Directors (vi) Executive and the Non-executive Directors (vii) The CEO 1 3 3 4 7 8 10 12 17 17 19 20 20 21 22 26 26 26 32 38 42 42 45 III. IV. V. VI. (viii) (ix) (x) (xi) The Company Secretary The CFO Internal Control System Reporting Requirements 47 49 49 50 VII. SCRUTINIZING FINANCIAL STATEMENTS - WHAT EVERY DIRECTOR SHOULD KNOW (i) General (ii) Liability of Directors (iii) Preparation of Financial Statements (iv) Tools for Directors' Review (v) How to Prevent Misleading and Fraudulent...
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...will set the stage for presenting the Ten–Ten planning process in the next chapter. The next chapter will integrate the various planning approaches and present a simplified, yet robust approach to planning called the Ten–Ten planning process. The key benefit of the Ten–Ten planning process is that it can be used for developing business plans in a very short time span. 8.1 Planning Concepts There are two generic planning strategies that a business can pursue.Michael Porter originally identified three generic strategies. He noted that a business can also focus on a market that is not very competitive. Most people consider this to be a special case of the other two strategies. See Porter (1980). It can strive to be efficient, it can differentiate, or both. In other words, a firm can focus on delivering Midas versions of products, Hermes versions of products, or both. A firm that employs a strategy of efficiency strives to be the low-cost producer and compete on the basis of charging less than the other...
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...TABLE OF CONTENT CHAPTER - 1 INTRODUCTION………………………………………………………………………. BACKGROUND OF STUDY………………………………………………………… OBJECT OF STUDY……………………………………………………………………. LIMITATION OF STUDY…………………………………………………………….. LITREATURE SURVEY………………………………………………………………… RESEARCH METHODOLOGY…………………………………………………..... CHAPTER - 2 INTRODUCTION OF THE ORGANIZATION……………………………………. OBJECT OF THE ORGANIZATION………………………………………………….. STRUCTURE AND DEPARTMENT OF THE ORGANIZATION…………….. ORGANIZATION FUNCTION…………………………………………………………. PRESENTATION AND ANALYSIS OF DATA……………………………………… MAJOR FINDING OF THE STUDY……………………………………………………. CHAPTER – 3 SUMMARY AND CONCLUSION RECOMMENDATION 1.1 Background of the Study The students of Bachelor on Business Administration with Banking and Insurance of Pokhara University have been assigned to perform 6 weeks internship on a particular institution and to make an internship report accordingly. This task has been assigned by Management Faculty of the Pokhara University as a partial fulfillment of the requirement for the degree of BBA-BI program. Faculty of Management; Pokhara University has its ultimate objective of educating students for professional pursuits in business, industry, government, and non-government sectors. It is further dedicated for increasing the knowledge of business, service and public administration. The trend of internship has been continued since the establishment of P.U. in the year 1997. It aims to give students the opportunity to realize...
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...Estimates and Causes of Capital Flight from Central and East European Countries Josef C. Brada W. P. Carey School of Business, Arizona State University Tempe, AZ 85287-3806 USA josef.brada@asu.edu Ali M. Kutan Southern Illinois University at Edwardsville Edwardsville, IL 62026-1102 USA akutan@siue.edu Goran Vukšić Institute of Public Finance, Zagreb, Croatia goran@ijf.hr ABSTRACT We estimate capital flight from twelve transition economies of Central and Eastern Europe (CEE) for the period 1995-2005 using the residual method. Capital flight from some of these transition economies, when adjusted for country size, is comparable to the more highly publicized capital outflows from Russia despite East Europe’s seemingly better transition and reform performance and greater political stability. We find that capital flight from CEE is mainly an economic phenomenon, driven by differences in interest rates and investors’ expectations about future macroeconomic conditions in their countries. Our empirical results are thus consistent with the mainstream explanations of capital flight and they mirror results obtained for other countries and time periods, suggesting that transition-related phenomena are not important factors in capital flight from CEE. JEL Classification Numbers: E26, F31, F32, P33, P37 Key words: capital flight, external sector liberalization, money laundering, transition economies I. Introduction ...
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...V. Marketing Plan In this chapter is marketing plan of the Company XY. It is a description of its competitors, the demand for the service, and the strengths and weaknesses from a market standpoint of both the business and its competitors. In more detail, the field of activity, potential customers, the location, the operating markets and the business level is clarified. After chapter five, the operational plan will be explained. 1. Market description To start, the Company XY is doing business in the fashion branch. In more detail, the business acts in the online-renting sector for fashion accessories like handbags/ clutches, belts and sunglasses. Hungary is a landlocked country in central Europe with an estimated population of almost 10 million people. There are 6.2 million internet users in Hungary which represents 62% of the total population and 29% of the internet population have broadband connections with speeds equal to or better than broadband speeds in the UK. Internet Population: 6,176,400 GDP Per Capita: $18,815 Internet Market Potential (GDP*Users/million): $116,209 million Internet Advertising Market Size: $153 million (Global Customer Acquision) The Hungarian womenswear market is expected to generate total revenue of $592.3 million in 2012, representing a compound annual growth rate (CAGR) of 2.4% between 2008 and 2012. - (MarketLine Industry Profile|Womenswear in Hungary | February 2013) Clothing is an essential item, with consumer choice being...
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...上海对外经贸大学 2014 — 2015 学年第 1 学期 《财务管理案例分析》课程期末考试A卷 选课序号： 612.043.201 任课教师： 唐旭君 姓 名： 学 号： 考试形式： □闭卷 ■开卷 双语教学： □是 ■否 修读方式： ■必修 □选修 □辅修 试卷页数 共 18 页 考试时间： 年级专业： 需计算器： 机考座位： 90 分钟 ■是 □否 号机 Case material: PRADA: TO IPO OR NOT TO IPO: THAT IS THE QUESTION, AGAIN It was January 25, 2011 and Guido Santini of the investment bank Grupo Capo Milano had just been asked to prepare a recommendation on how Prada should raise the money for its planned expansion in Asia and to pay the significant portion of its long-term debt that was maturing within one year. Although he had known this request would be coming at some point, he had expected a bit more time. His recommendation had to be presented to the Prada Board of Directors at their annual general meeting scheduled in two days, on January 27. THE MISSION The board requested that Santini prepare a report recommending and ranking alternatives for raising over 1 billion euros within the next six to 12 months. With more than €1 billion of debt maturing within 12 months (almost half in the next six months), Prada needed to have a credible plan in place to meet these obligations. In addition to the capital to refinance its existing debt, Prada had identified Asia as an area for future growth, and this growth also required capital. Asia was currently experiencing significantly higher growth than other parts of the world, and Prada wanted to be able to take part in and benefit from this. Consequently, Santini’s job was to recommend to the board how...
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