Quality of company CEO crucial to success

quality/ceo/investment/

23 January 2017
| By Hope William-Smith |
image
image
expand image

The quality of a company's chief executive is a key factor in its overall success rate and should be carefully considered as part of an investor's decision-making processes, according to Quay Global Investors.

Track record, response to challenges, leadership skills, and risk analysis practices were measurements which investors could use to determine the potential of a chief executive.

Quay Global Investors principal and joint managing director, Chris Bedingfield, said: "A good CEO is key to a good business, so it's important to understand what makes a good one".

"The sector outlook, market environment or demographics can make a company seem a very attractive investment proposition, but the CEO can make all the difference to its ultimate success or failure."

Bedingfield suggested investors look at the performance of particular companies they would consider for investment, by assessing any changes since the appointment of its chief executive.

"Poor business and share price performance is always a warning sign, but if things have improved since the CEO took over, this clearly shows good leadership and ability," he said.

"If out-performance has continued in both strong and weak markets, this is a very positive signal.

"Making a judgement on a CEO's track record… provides an insight into future performance, and should be an important consideration for all investors."

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 2 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 3 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

1 week 5 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

2 weeks 3 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND