In earlier article, we have looked at the quality of earning as this forms an important criteria for investing in a company.

So what next? Of course, we need to mention the quality of Management. Do you know that it’s not only the company’s performance that is of concern by investor! Incidentally, in the 2007 Survey of the Most admired company, quality of management is one of the utmost criteria chosen.

Why is it that we need to have grave concern on the quality of management?

From the investment standpoint the reasons are simply:

• it is unwise to invest in a company that is still not having any professional run management team;

• avoid investing in family own concern and in particular where is a constant infighting or where families have splitted or in the midst of splitting.

• invest in a company that’s no longer has a dynamic management team.

Let’s look at some of the following criterias of high quality management:

• proven competency- what has been reflected in their past records in the last three to five years - growth lacklustre or impressive when compared to the previous years and when compared to other companies in the same industry?

• whether there is high regard or esteem in which the management is held by its peers in the business community and industry. Are they been highly respected?

• depth of knowledge should be considered whether in terms of their knowledge of the industry and of latest innovation/products trend/management techniques

• more importantly, how have the management fare at time of adversity say during recessions or certain financial crisis -so did they manage well, are they able to streamline the operations? did the company perform better than its competitors or did management lose control?. The most capable management will be able to prove their competency at difficult periods particularly in times of stress, strain and tension.

• management integrity in terms of corporate governance and transparency

• are management the followers type or the innovator type - can they lead the company by planning its strategy for the future and pacing far ahead of their competitors.

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