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Key Management Positions - What Competencies to Look for in Your Stock's Management

Key Management Positions - What Competencies to Look for in Your Stock's Management

When you start with the management assessment process while you are analysing a stock for a possible investment, one of the key requirements is that the company should have an outstanding management team. As an investor - especially in the energy and mining sectors - you should be looking for an experienced management team that has been successful in the past.

I have qualified the following positions as key management positions:

Key Management  Title  Job description1 
Board of Directors  Chairman of the Board  The chairman, also known as the chairperson or simply the chair, is the highest officer of the board. The person holding the office is typically elected or appointed by the members of the group. The chairman presides over meetings of the assembled group and conducts its business in an orderly fashion. When the group is not in session, the chair's duties often include acting as its head, its representative to the outside world and its spokesperson. 
Vice-Chairman  A vice-chairman (or deputy chairman), subordinate to the chairman, is sometimes chosen to assist the chairman and to serve as chairman in the absence of the chairman, or when a motion involving the chairman is being discussed. 
Management Team  President 

The corporate President is the leader of a company and is legally recognized as the highest "titled" corporate officer, ranking above the various Vice Presidents. However that post on its own is generally considered subordinate to the CEO

Chief Executive Officer (CEO)  A CEO is generally the most senior corporate officer (executive) in charge of managing an organization. An individual appointed as a CEO typically reports to the board of directors. The CEO advises the board of directors, motivates employees, drives change within the organization, and presides over the organization's day-to-day operations. 
Chief Financial Officer (CFO)  The CFO or chief financial and operating officer (CFOO) is a corporate officer primarily responsible for managing the financial risks of the corporation. The CFO reports directly to the CEO and to the board of directors and assists the Chief Operating Officer (COO) on all strategic and tactical matters as they relate to budget management, cost benefit analysis, forecasting needs and the securing of new funding. 
Chief Operating Officer (COO)2 

The COO (or Chief Operations Officer or Director of Operations) is responsible for the daily operation of the company, and routinely reports to the CEO. The COO may also carry the title of President which makes that person the second in command at the firm, especially if the highest ranking executive is the Chairman and CEO. 

To help you form an opinion about the quality of your stock's management, I have created the following article: Management Evaluation - 11 Questions to Ask Yourself When Assessing Your Stock's Management.

 

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Note: The smaller the size of the company, the sooner you will see that more than one job title has been given to one single person.

 

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1 Source: Wikipedia.org

2 Non producing resource companies normally do not have a COO employed. Instead, they employ a Vice President Exploration, who is responsible for the company’s strategic exploration plans.

About Jeroen Snoeks

Jeroen Snoeks - UndervaluedEquity.com

Jeroen Snoeks is the founder of UndervaluedEquity.com, a website for investors passionate about investing in undervalued stocks. Through UndervaluedEquity.com, he shares his experience and knowledge and will soon reveal his personal stock portfolio.


 
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