Bay of Plenty Times
  • Bay of Plenty Times home
  • Latest news
  • Business
  • Opinion
  • Lifestyle
  • Property
  • Sport
  • Video
  • Death notices
  • Classifieds

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • On The Up
  • Business
  • Opinion
  • Lifestyle
  • Property
    • All Property
    • Residential property listings
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
  • Sport

Locations

  • Coromandel & Hauraki
  • Katikati
  • Tauranga
  • Mount Maunganui
  • Pāpāmoa
  • Te Puke
  • Whakatāne
  • Rotorua

Media

  • Video
  • Photo galleries
  • Today's Paper - E-Editions
  • Photo sales
  • Classifieds

Weather

  • Thames
  • Tauranga
  • Whakatāne
  • Rotorua

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Premium
Home / Bay of Plenty Times

Mark Lister: The importance of management

Bay of Plenty Times
28 Mar, 2021 06:00 PM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

Mark Lister asks how important are the people in charge? Photo / Getty Images

Mark Lister asks how important are the people in charge? Photo / Getty Images

OPINION:

Of all the attributes and qualities to look for when deciding whether to invest in a company, how important are the people in charge?

There are many things to consider when seeking out the best share investments - a strong balance sheet with modest debt levels, a competitive advantage, a dominant market position, high-quality assets, growth potential and strong operating cash flow.

However, all these things can become meaningless if you can't point to strong, competent, trustworthy leadership.

I remember the day Steve Jobs announced his resignation in 2011. The Apple share price immediately fell, highlighting the concern investors had over how the company would fare in his absence.

Advertisement
Advertise with NZME.

In the 10 years since, Apple has continued to succeed. Jobs had built a strong team around him and despite the fact he was the public face of the company, his legacy of innovation continued. His successor, Tim Cook, had a long, successful career at Apple working closely with Jobs.

Similar speculation surrounds how Warren Buffett's company, Berkshire Hathaway, will manage when he's no longer fit enough to run it. The legendary investor is still chairman at 90 and his long-standing right-hand man, Charlie Munger, is 97.

When that day inevitably comes, I'm willing to bet the Berkshire share price will fall in response. However, the real test will come in the years to follow, as we find out just how good Buffett's succession planning has been.

Advertisement
Advertise with NZME.

In New Zealand, there are many instances of less than perfect governance.

One notable recent case is that of a2 Milk, with the brief stint of former boss Jayne Hrdlicka riddled with examples of how not to manage a difficult situation.

Discover more

Mark Lister: Is the 60-40 investment portfolio dead?

22 Mar 01:00 AM

Mark Lister: The US economy - stronger than most and set for another boost

14 Mar 06:00 PM

Opinion: The sharemarket's February flop

07 Mar 08:00 PM

Mark Lister: Are houses really as expensive as we think?

27 Feb 01:00 AM
Mark Lister is Head of Private Wealth Research at Craigs Investment Partners. Photo / Supplied
Mark Lister is Head of Private Wealth Research at Craigs Investment Partners. Photo / Supplied

Fletcher Building and Fonterra have also had their fair share of poor leadership in recent years, which has contributed to a mixed financial performance and unsatisfactory outcomes for shareholders. Thankfully, both companies are under more astute management today, and performance has improved.

At the other end of the spectrum, we have a plethora of well-managed businesses that have delivered consistent returns for shareholders and managed leadership transitions with ease.

Fisher & Paykel Healthcare, Meridian Energy, Freightways, Auckland Airport and Ryman Healthcare are a few that spring to mind.

While it's clear that leadership is important, a harder question to answer is how we should measure these qualities.

A company's quantitative and financial factors are comparatively easy to see and judge. Debt levels, profit margins and historic growth rates can all be calculated, and some ratios or forecasts churned out. The value and skills of management are much less tangible and harder to assess.

In many ways, actions speak louder than words. We look for company leaders who are focused on delivering shareholder returns, know their businesses intimately, have a track record of success, and communicate openly with shareholders.

Advertisement
Advertise with NZME.

Many successful companies have executive teams that have been stable for a long time. While a fresh approach can revitalise a business, continuity is also important, so we look for companies where a reasonable proportion of the senior team has been there for a reasonable length of time.

We look for management that has a history of doing what it says it will, and backing up forecasts with results. Businesses are influenced by a range of factors and many of these are unpredictable, although questions must be asked of those that regularly miss forecasts.

Another good sign is when those in leadership positions have their own money in the business. There is no substitute for having skin in the game, and this further ensures that management shares successes and failures with shareholders.

When you invest in a company, you are also investing in the people running it.

Mark Lister is Head of Private Wealth Research at Craigs Investment Partners. This column is general in nature and should not be regarded as financial advice.

Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

Latest from Bay of Plenty Times

Bay of Plenty Times

Baywide rugby: Whaka look to break 19-year drought

Bay of Plenty Times

Netball: Magic narrowly lose to Pulse after scores still tied in final minutes

Bay of Plenty Times

Revealed: ‘Major milestone’ for education system announced by Government 


Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

Advertisement
Advertise with NZME.

Latest from Bay of Plenty Times

Baywide rugby: Whaka look to break 19-year drought
Bay of Plenty Times

Baywide rugby: Whaka look to break 19-year drought

Whakarewarewa beat Greerton Marist 25-17 to reach the Baywide final.

14 Jul 05:17 AM
Netball: Magic narrowly lose to Pulse after scores still tied in final minutes
Bay of Plenty Times

Netball: Magic narrowly lose to Pulse after scores still tied in final minutes

14 Jul 04:28 AM
Revealed: ‘Major milestone’ for education system announced by Government 
Bay of Plenty Times

Revealed: ‘Major milestone’ for education system announced by Government 

14 Jul 04:00 AM


Solar bat monitors uncover secrets of Auckland’s night sky
Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

06 Jul 09:47 PM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • Bay of Plenty Times e-edition
  • Manage your print subscription
  • Manage your digital subscription
  • Subscribe to Herald Premium
  • Subscribe to the Bay of Plenty Times
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • Bay of Plenty Times
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP