What are some traits you would like to see in the management of the companies you invest in?

Honesty

• No excessive RPT

• No shady dealings

• No crazy compensation

I like a few guys such as Jeff Bezos, Warren Buffett, Mark Zuckerberg.

Innovation.

Hunger to grow.

Opportunistic.

Understanding of finances.

Care for culture and employees.

Proactive rather than reactive actions to managing external threats

Maintain a consistent & sustainable dividend policy, dont unnessary hoard cash

Able to articulate a company's vision and future outlook in layman terms and give concete steps on how to acheive that

Skin in the game

Hello Daryl! Jeff Bezos is a CEO whose letters I read closely.

As for judging the ability of a company's leader, I had answered a very similar question in Seedly a few days ago. For your convenience, I've reproduced the answer below.

I want management teams with integrity, capability, and an innovative mindset. I described this in detail in a recent article of mine in my blog. Here are the full exceprts:

"A management team without capability is bad for self-explanatory reasons. Without an innovative mindset, a company can easily be overtaken by competitors. Meanwhile, a management team without integrity can fatten themselves at the expense of shareholders. There are a few things we can look at to understand how a company’s management team fares on these fronts.

On integrity:

• How has management’s pay changed over time relative to the company’s business performance? It’s not a good sign if management’s pay has increased or remained the same in periods when the company’s business isn’t doing well.

• How is management compensated? Ideally, we want management to be compensated based on metrics that make sense to us as a company’s shareholders. PayPal, another company I own shares of, excels in this regard, in my view. In 2018, the lion’s share of the compensation of PayPal’s key leaders came from the following: (a) Stock awards that vest over a three-year period; (b) restricted stock awards that depend on growth in the company’s revenue and free cash flow over a three-year period; and (c) which applies specifically for the CEO, stock awards that depend on the performance of PayPal’s share price over a five-year period.

• Are there high levels of related-party transactions (RTPs)? RTPs are business transactions made between a company and organisations that are linked to said company’s management. A good example will be the famous hotpot restaurant operator, Haidilao. In 2018, Haidilao’s top five suppliers accounted for 38.4% of the company’s total purchases of RMB 10 billion, and four of the top five suppliers were linked to management. The presence of high levels of RTPs in a company could mean that management is using said company to enrich entities that are linked to them – that’s not ideal for the company’s other shareholders. In the case of Haidilao, it appears that management has been treating shareholders fairly; the company’s net profit margin has been at a healthy level (for a restaurant operator) of at least 9% going back to 2016.

On capability:

• Does the company have a good culture? Some clues on a company’s culture can be found on Glassdoor, a website that allows a company’s employees to rate it anonymously. Unfortunately, Glassdoor’s coverage mostly extends to only US companies for now.

• Has the company managed to successfully grow its important business metrics over time? Going back to Intuitive Surgical, the number of surgical procedures worldwide performed with the company’s robots has increased significantly from 68,000 in 2007 to 1.04 million in 2018. Meanwhile, the installed base of Intuitive Surgical’s robotic surgery systems worldwide has jumped from 795 in 2007 to 5,406 today.

On innovation:

• It requires some judgement in assessing a management team’s ability to innovate. There are three companies that I think are great examples of having innovative management.

• First is US e-commerce and cloud computing giant Amazon, which I own shares of. Amazon started selling just books online when it was founded in 1994 but expanded its online retail business into an incredible variety of product-categories over time. In 2006, the company launched its cloud computing business, AWS (Amazon Web Services), which has since grown into the largest cloud computing service provider in the world.

• Second is the international video streaming provider Netflix, which I also own shares of. Netflix’s co-founder and CEO Reed Hastings said in 2007: “We named the company Netflix for a reason; we didn’t name it DVDs-by-mail. The opportunity for Netflix online arrives when we can deliver content to the TV without any intermediary device.” This shows that Netflix’s leaders were already thinking about building a video streaming business right from the very beginning, back when video streaming wasn’t even a widely used term.

• Third is MercadoLibre, another company that I have a stake in. MercadoLibre started life in the late 1990s operating online marketplaces in Latin America that connects buyers and sellers. In the early 2000s, MercadoLibre started an online payments service, MercadoPago, that now also includes online-to-offline (O2O) payments services. In addition, the service helps facilities online payments for merchants and consumers that are outside of the company’s online retail platform. In the third quarter of 2019, off-platform payment volume on MercadoPago exceeded on-platform payment volume in Brazil (the company’s largest market), for the first time ever. Then in 2013, MercadoLibre launched its shipping solution, MercadoEnvios. MercadoLibre’s service-innovations all help to drive further growth in the company’s marketplace business, and in some cases, even create new growth areas outside of the company’s main platform."