Is C-suite Management as a catch-all variable in our investing journey?
Is C-suite Management as a catch-all variable in our investing journey?
With the continuation of my previous blog article, I read an interesting article on the Wharton website. Late Mr. Leslie Koo did a turnaround of Taiwan Cement Corporation (TCC), a business that is controlled by the family
Being interested to enhance the lifespan of TCC and family legacy in TCC, he fixed the problems which were not dealt by last two chairman and incurred by last chairman.
First, he overhauled the management of TCC, the one who are not interested in admitting his/her own mistakes and prefer to finger-point. That is the important lesson why we, the investors, should invest in the company whose management admit his/her own mistakes. He placed strong emphasis on accountability. Warren Buffett admitted his own mistakes yearly on the BRK annual letter although some of his mistakes are not written in details.
Similarly, at Semco, Ricardo Semler removed top management who were interested in protecting business they are running in.
In that view, how do we, the investors, recognise that the new CEO or chairman doing that acts?
Secondly, he personally talked with institutional shareholders and heard the reasons of why they are not investing more in TCC. Thereafter, he immediately address these concerns mentioned by these institutional shareholders.
This act may address the question. Is it enough? It may be not enough if the business is in stiff competition with the risk of going down faster.
Thirdly, he had identified a source of revenue growth in China. To capture that, he replaced the initial placements of employees who are interested to prove that it is impossible with young ones.
Ex-CEO of Capitaland successfully grew its business by building shopping centres in China. Clearly, a combination of 1) internal top management restructure, 2) commitment to address shareholders' valid concerns, and 3) a new revenue growth should make an investment worthy.
From 2003 to 2008, its share price went five fold. Eventually, by 2017, its share price is hovering between 30 - 40, four fold from the chairman appointment of Leslie Koo.
It is worth to learn how to do quantitative and qualitative analysis on this catch-all variable.
You can learn more about Leslie Koo from another article.
With the continuation of my previous blog article, I read an interesting article on the Wharton website. Late Mr. Leslie Koo did a turnaround of Taiwan Cement Corporation (TCC), a business that is controlled by the family
Being interested to enhance the lifespan of TCC and family legacy in TCC, he fixed the problems which were not dealt by last two chairman and incurred by last chairman.
First, he overhauled the management of TCC, the one who are not interested in admitting his/her own mistakes and prefer to finger-point. That is the important lesson why we, the investors, should invest in the company whose management admit his/her own mistakes. He placed strong emphasis on accountability. Warren Buffett admitted his own mistakes yearly on the BRK annual letter although some of his mistakes are not written in details.
Similarly, at Semco, Ricardo Semler removed top management who were interested in protecting business they are running in.
In that view, how do we, the investors, recognise that the new CEO or chairman doing that acts?
Secondly, he personally talked with institutional shareholders and heard the reasons of why they are not investing more in TCC. Thereafter, he immediately address these concerns mentioned by these institutional shareholders.
This act may address the question. Is it enough? It may be not enough if the business is in stiff competition with the risk of going down faster.
Thirdly, he had identified a source of revenue growth in China. To capture that, he replaced the initial placements of employees who are interested to prove that it is impossible with young ones.
Ex-CEO of Capitaland successfully grew its business by building shopping centres in China. Clearly, a combination of 1) internal top management restructure, 2) commitment to address shareholders' valid concerns, and 3) a new revenue growth should make an investment worthy.
From 2003 to 2008, its share price went five fold. Eventually, by 2017, its share price is hovering between 30 - 40, four fold from the chairman appointment of Leslie Koo.
It is worth to learn how to do quantitative and qualitative analysis on this catch-all variable.
You can learn more about Leslie Koo from another article.
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