Wednesday, January 09, 2013

The RIGHT Management

After you evaluated a company's business model, growth prospects and the industry challenges it faces, the next thing you need to do is evaluate the people managing the business itself!

If the people who manage a company are incompetent or dishonest, they will eventually run a company into the ground. But if they have amazing talent, skills and integrity, then you know that company is in great hands and is going to be a huge success.

With that in mind, invest in a company with management that...
  • Has an excellent track record achieving business goals and targets
  • Has the proper credentials and relevant skill sets to manage the company successfully
  • Has future growth plans that continue building long-term value for shareholders
  • Is honest and transparent with its shareholders and be willing to admit to any mistakes made
  • Is compensated based on performance and results. A management that continues to pay itself high salaries while under-performing is not aligned with shareholder interests
The Annual General Meeting (AGM) is a great way to meet with management. Interacting face-to-face, asking hard questions, considering their answers and how they answer is a great way to assess a company's management team.

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