Lvmh: corporate structure and business plan
Lvmh: corporate structure and business plan
Governance Structure
The Board of Directors is the strategy body of LVMH Moet Hennessy – Louis Vuitton SA. The competence, integrity andresponsibilityof its members, clear and fair decisions reached collectively, and effective and secure controls are the ethical principles that govern the Board. The key priorities pursued by LVMH’s Board of Directors are enterprise value creation and the defense of the Company’s interests. LVMH’s Board of Directors acts as guarantor of the rights of each of its shareholders and ensures that shareholders full all of their duties.
The Company adheres to the Code of Corporate Governance for Listed Companies published by AFEP and MEDEF. The Board of Directors shall have a maximum of 18 members, a third of whom at least are appointed from among prominent independent persons with no interests in the Company The number of Directors or permanent representatives of legal entities from outside companies, shall be limited to four. Apart from the selection of the Company’s management structure and the appointment of the Chairman of the Board of Directors, Chief Executive Officer and Group Managing.
review the essential characteristics of the internal control and risk management systems adopted and implemented by the Company;
ensure that major risks to which the
Committee
monitor the process for preparing financial information, particularly the individual company and consolidated nancial statements, and verify the quality of this information;
monitor the statutory audit of the individual company and consolidated financial statements by the Statutory Auditors , whose conclusions and recommendations it examines;
Compensation Committee
The Committee shall meet at least twice a year, without the Chairman of the Board of Directors, the Chief Executive Officer and the Group Managing Director(s), before the Board of Directors’ meetings in which the agenda includes a review of the annual and half-yearly parent company and consolidated financial statements. If necessary, the Committee may be required to hold special meetings, when an event occurs that may have a significant effect on the parent company or consolidated financial statements. Decisions of the Committee shall be made by simple majority vote and shall be deemed to have been reached as a board.
The proceedings of each Committee meeting shall be recorded in minutes of the meeting. The Committee shall report on its work to the Board of Directors. It shall submit to the Board its findings, recommendations and suggestions. The Committee may request any and all accounting, legal or financial documents it deems necessary to carry out its responsibilities. The Committee may call upon the Company’s staff members responsible for preparing the financial statements, carrying out internal control procedures, conducting internal audits, applying risk management or cash management procedures, investigating tax or legal matters, as well as the Statutory Auditors, to appear before it on any number of occasions to address issues in detail, without requiring the presence of the Chairman of the Board, the Chief Executive Officer, or Group Managing Director(s) of LVMH. These meetings may also take place in the absence of those responsible for the accounting and financial functions. After having duly notified the Chairman of the Board of Directors, the Committee may seek assistance from external experts if circumstances require. The Committee members and its Chairman may receive a special Director’s fee, the amount of which shall be determined by the Board of Directors and charged to the total financial package allocated by the Shareholders’ Meeting. 1. Subject to the exceptions provided by law, the Board of Directors is composed of three to eighteen members, who may be individuals or legal entities appointed by the Ordinary Shareholders’ Meeting. A legal entity must, at the time of its appointment, designate an individual, who will be its permanent representative on the Board of Directors. The term of office of a permanent representative is the same as the legal entity that he represents. . Each member of the Board of Directors must during its term of office own at least five hundred (500) shares of the Company. If, at the time of its appointment, a member of the Board of Directors does not own the required number of shares or if, during its term of office, it ceases to be the owner thereof, it shall dispose of a period of six months to purchase such number of shares, in default of which it shall be automatically deemed to have resigned. 3. Nobody being more than seventy years old shall be appointed Director if, as a result of his appointment, the umber of Directors who are more than seventy years old would exceed one-third of the members of the Board. Directors are appointed for a term of three years. The duties of a Director shall terminate at the close of the Ordinary Shareholders’ Meeting convened to approve the accounts of the preceding fiscal year and held in the year during which the term of office of said Director comes to an end. A salaried employee of the Company may be appointed as a Director provided that his employment contract antedates his appointment and corresponds to a position actually held.
Each Statutory Auditor is Appointed by the Ordinary
RICOMINCIA DA QUI STAKEHOLDERS COMPETITORS: LVMH competes in the luxury market with an array of small private and publicly held companies that make designer clothing, wine, watches, and other luxury goods. Unlike LVMH, most of these companies usually have only one brand in their portfolios. The most direct competitors to LVMH are Pinault-Printemps-Redoute (PPR), a French luxury holdings company that includes such brands as Yves Saint Laurent and Gucci, and Compagnie Financiere Richemont, a Swiss luxury company that includes such brands as Cartier and Montblanc. ? PPR is a French retailer and luxury goods company. It is very similar to LVMH in both size and earnings.
One distinct advantage LVMH holds over PPR is international diversification. Though a majority of PPR’s brands are luxury, it also owns Puma, a sportswear line for men and women that is more affordable and as a broader consumer base, thereby increasing its market. The luxury brands that directly compete with LVMH fall under Gucci Group and are: Alexander McQueen, Bottega Veneta, Balenciaga, Yves Saint Laurent, Stella McCartney, Gucci, Boucheron and Sergio Rossi. ? Compagnie Financiere Richemont is much smaller than LVMH in terms of revenue, but earned a similar operating margin on its revenue.
The implementation of actions to reduce the products impacts throughout their life cycle implies to work closely with the suppliers and subcontractors. Programs to make lighter packaging are critical and are coordinated at Group level. We start studying a product’s packaging from the product’s design stage. The design/development, purchasing and marketing teams work with suppliers in multi-disciplinary groups and use a value analysis method to reconcile impeccable quality and aesthetics for the consumer with marketing requirements, optimized manufacturing processes, and our desire to use raw materials sparingly.
Preserving biological diversity is a vital issue for the evolution of life on earth. LVMH group has built its businesses on a sustainable relationship with the natural environment, and consequently uses elements that are neutral or without impact on our ecosystems, either by growing plants or raising animals, or by using surplus elements. In this way, it complies in an exemplary manner with the regulations protecting rare species. The research work of LVMH’s R&D laboratories in the village of Koro in Burkina Faso continues to bear fruit.
These include key luxury industry brokers whose current clients, including subcontractors, may be interested; the Colbert Committee, an association of over 70 luxury companies; Colipa, the European cosmetics association; and the Confederation des Arts de la Table (CAT, the French tableware association). On the heels of this new transport insurance solution other new products will be developed, with the goal of offering a dedicated range for all luxury goods companies.
CUSTOMERS: LVMH made a fortune thanks to customerloyalty, and to keep these customers it’s opening shops both in the U. S. ut also in developing countries such as India and China In all, Louis Vuitton now has 96 stores open in the United States, which Slavinsky says is almost evenly divided between freestanding stores and leased in-store boutiques. The company’s strength owes a lot to customer loyalty — especially to Louis Vuitton, which analysts estimate accounts for about 60 percent of LVMH’s earnings. Demand for its products — from $100 coin purses to the new $5, 500 Theda multi-buckled, gilt-trimmed handbags in colors such as turquoise and pink — is so strong that Vuitton’s margin topped 45 percent last year; its U. S. sales alone grew 38 percent. To meet the demand, Vuitton is expanding.
Local Communities
Because it considers that promoting respect for the environment is essential, LVMH is developing an active partnership with groups of businesses, local communities and the associations which contribute to this objective.
Institutional Goals
The mission of the LVMH group is to represent the most refined qualities of Western ” Art de Vivre” around the world. LVMH must continue to be synonymous with both elegance and creativity. Our products, and the cultural values they embody, blend tradition and innovation, and kindle dream and fantasy.
It took years and even decades to build their image. They are an asset that is both priceless and irreplaceable. Therefore, Group companies exercise stringent control over every minute detail of their brands’ image. In each of the elements of their communications with the public (announcements, speeches, messages, etc. ), it is the brand that speaks. Each message must do right by the brand. In this area as well, there is absolutely no room for compromise. Act as entrepreneurs The Group’s organizational structure is decentralized, which fosters efficiency, productivity, and creativity.
This type of organization is highly motivating and dynamic. It encourages individual initiative and offers real responsibilities – sometimes early on in one’s career. It requires highly entrepreneurial executive teams in each company. This entrepreneurial spirit requires a healthy dose of common sense from managers, as well ashard work, pragmatism, efficiency, and the ability to motivate people in the pursuit of ambitious goals. One needs to share and enjoy this entrepreneurial spirit to – one day – manage a subsidiary or company of the LVMH group.
