Compass Group Totally Explained

Everything about Compass Group totally explained

The British company Compass Group is the largest food service business in the world. It provides catering services to many types of institutions, for example schools, hospitals, prisons, airports, companies and resident healthcare homes. It is listed on the London Stock Exchange and is a member of the FTSE 100 Index. It is headquartered in Chertsey, Surrey to the south west of London.

History

The business has its origins in a company founded in 1941 as Factory Canteens Limited. It was acquired by Grand Metropolitan in 1960. A management buy-out followed in 1987 when the Compass Group was formed. It was first listed on the London Stock Exchange in 1988.

Highlights

Net revenue for the year ended 30 September 2006 was £10,815 million.
Employs over 400,000 people in more than 70 countries.
Ranks number 12 on the list of the world's largest employers
Ranks at 260 on the Global 500 of Fortune, ahead of McDonald's and Sodexho Alliance (one of its main competitors).
Analysts believe that as much as 15% of current business comes from government sources around the world.
Directly involved in a 2005/2006 scandal for corrupting United Nations officials for winning contracts.
Adopted hardball labour tactics, in 2006 canceling a service contract at an Ottawa, Ontario, Canada nursing home rather than pay employees the arbitrator-awarded wage after a three year dispute.
The Americas Division is headquartered in Charlotte, NC and the company employs about 3000 people in the Charlotte metro region. This division includes all of North and South America.

Brands

The Compass Group owns the following brands and businesses: Bon Appétit Management Company, Caffè Ritazza sold with SSP and Moto, Chartwells, Creative Host Services, Crothall, Eurest, Canteen Vending, Eurest Support Services (ESS), Everson Hewett, FLIK, Harry Ramsden's, Keith Prowse, Leith’s, Levy Restaurants, Medirest, Milburns, Mitropa, Morrison, Moto Hospitality, Patina Group, Pumpkin, Restaurant Associates, Scolarest, Selecta, Tastte!, Upper Crust, Wolfgang Puck. It operates many franchises of outlets such as Burger King. In India they've ventured with RadhaKrishna Hospitality Services (RKHS )and are the only organised player have a 100 Million $$ market share in India. In India they employ around 15000 staff.
Many are no longer part of Compass since the sale of SSP and Moto.

Management

Chairman, Sir Roy Gardner

Group Chief Executive, Richard Cousins

Current external members of the board of directors include: Sven Kado,Tim Parker,Sir Ian Robinson, and Steve Lucas.

The United Nations Corruption Scandal + Iraq overcharging scandal

The Compass Group is involved in a corruption scandal with its subsidiary Eurest Support Services winning contracts to provide food to United Nations peacekeepers in Liberia. The value of Compass’s food contracts with the United Nations is valued at $237 million, with renewals and add-ons that could reach $351 million. Alexander Yakovlev (UN procurement) the UN Procurement Officer and Vladimir Kuznetsov Head of the UN Committee for Administrative and Budgetary Issues were arrested and indicted after taking nearly $1 million in bribes from Compass.
   Competitors Es-Ko and Supreme Foodservice AG have initiated lawsuits claiming violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act, the Sherman Antitrust Act and New York State's Donnelly Act regulating free trade. Federal investigations are underway and the case has been referred to the Serious Fraud Office (UK).
   After its own three-month internal investigation, Compass declared it had discovered "serious irregularities" in its UN business, but that these were limited to "only a few individuals" who were dismissed: Peter R. Harris, Andy Seiwert and Doug Kerr. Compass refused to make public its investigation and didn't name any other individuals involved beyond those already fired, so the true level of corruption within Compass is unclear. However, Compass’s CEO Michael Bailey has stepped down in June 2006 and has been replaced by an outsider to the catering industry, Richard Cousins.
   Furthermore, Compass through its subsidiary Eurest Support Services is involved in the scandal of overcharging its services to the US Government in Iraq as are many other government contractors, including Compass' competitor, France-based Sodexho.

Corporate Governance Problems

Sir Francis Mackay Compass's Chairman also chairs the Nomination Committee.

A Code of Ethics (or Ethical code) has been published by Compass only in August 2006.

Compass has no Environment Management System.

Compass published no guidelines for stock ownership by the CEO, Senior Management and non Executive Directors.

Compass facilities are not known to be certified by internationally known standards. Some of its larger sites have achieved ISO 14001 accreditation, but the level of certification across the Group isn't disclosed.Further Information

Get more info on 'Compass Group'.

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