When long-term investors evaluate a company, they are also evaluating the people running it. The qualities they look for are often less about charisma and more about judgment and track record.
Capital allocation
How management spends cash — on investment, acquisitions, dividends or buybacks — has a large effect on long-term returns.
Candour
Leaders who explain setbacks clearly and early tend to earn more trust than those who only report good news.
Consistency
Doing what they said they would do, quarter after quarter, is the simplest signal of a management team investors can rely on.
Key takeaways
- Capital allocation
- Candour
- Consistency
