As president and c.e.o. of Hospitality Solutions LLC, one of Steve Belmonte’s goals is to bring to board rooms the leadership skills developed in his years as president of one of the world’s largest franchise companies. In that context, he has educated himself—and the board upon which he currently sits—in the complexities of a new law that governs the financial activities of public and, to a certain extent, private companies.
Belmonte served for 11 years as president and c.e.o. of Ramada Franchise Systems and led its emergence as one of the word’s largest and most recognizable hotel brands. Now he’s moved on to his own enterprise, Hospitality Solutions LLC, a New Jersey-based company that provides franchise consulting, litigation support, arbitration, expert-witness and motivational-speaking services to all service industries.
But of all the new pursuits in which he’s currently engaged, Belmonte says the most challenging—and most satisfying—is his role as a member of the board of directors of Arlington Hospitality Inc., a hotel-management company based in Arlington Heights, Ill.
Belmonte was elected to the Arlington Hospitality board last year, along with fellow board member Ken Fell. His experience running for the post, Belmonte says, was both educational and eye-opening for him.
“Both Ken and I saw a need to bring to the table some fresh thoughts and ideas on improving the value of our shares for our shareholders,” Belmonte said. “We ran on what you might call a dissident slate, and as it turned out, we won election to the board overwhelmingly.”
Belmonte - always one to dive head-first into a project—has become a student of the intricacies of board-room operations. As an example, once he made the decision to run for the Arlington Hospitality Board, he studied and learned everything he could about regulations that govern the financial activities of publicly and privately held companies. Belmonte’s diligence paid off: About the time he was elected to the Arlington Hospitality board, a new law governing boards of directors was about to go into effect.
“This new law, the Sarbanes-Oxley Act of 2002, came on the scene shortly after I was elected to the Board,” said Belmonte, now chairman of the Compensation Committee and a member of the Audit Committee for Arlington’s board. “I did a lot of research on Sarbanes-Oxley and believe me, this law carries a lot of clout and its complex rules and regulations will be enforced to the fullest.”
One worldwide accounting firm refers to Sarbanes-Oxley as “the single most important piece of legislation affecting corporate governance, financial disclosure and the practice of public accounting since the U.S. securities laws of the 1930s.” Like most federal regulations, the Act’s requirements for corporate governance, financial-statement disclosures, management assessment of internal controls, and the changed responsibilities of auditors are voluminous and intricate in detail.
Surprisingly, Belmonte said, the new act is still relatively unknown—or at least is being underestimated or overlooked—in board rooms across the country
“According to the May/June issue of Corporate Board Member magazine, only 52 percent of all companies’ boards of directors have formed a governance committee, only 56 percent have adopted governance guidelines, and only 53 percent have named a chief governance officer or named others as governance watchdogs—all of which are set forth in Sarbanes-Oxley,” Belmonte said. “The board of any company in any industry needs to do what we’ve done at Arlington Hospitality—we’ve immersed ourselves in Sarbanes-Oxley and done everything by the book, as it requires. Companies that don’t follow these regulations will be held accountable—strongly and stringently—by the Federal Government, and will face some very heavy penalties if they’re not in full compliance.”
It’s Belmonte’s goal to bring his brand of knowledge, diligence and experience to the table in other board rooms. “I’ve learned a lot being a member of the Arlington board, and it’s my objective to be of service in a similar way to other boards of directors,” Belmonte said.
Hospitality Solutions LLC, based in Randolph, N.J., provides franchise consulting, franchise agreement formulation and termination assistance, negotiative assistance, asset management, litigation support, arbitration, expert witness and motivational speaker services to all service industries. In addition to heading up his new company, Belmonte serves as vice chairman of the American Hotel & Lodging Assn.`s Educational Foundation. For more information, call (973) 598-0839 or e-mail [email protected]