Key Management Positions – What Competencies to Look for in Your Stock’s Management

When analyzing a stock for a possible investment, one key requirement is to assess the quality of the company’s management team.

Board of Directors

The Chairman of the Board is the highest officer of the board, responsible for presiding over meetings and conducting the group’s business in an orderly fashion. The Vice-Chairman, who is subordinate to the Chairman, is appointed to assist the Chairman and serve as Chairman in their absence.

Management Team

The corporate President is the leader of a company and legally recognized as the highest-ranking corporate officer, although this post is generally considered subordinate to the Chief Executive Officer (CEO). The CEO is typically the most senior corporate officer responsible for managing the organization, advising the board of directors, motivating employees, driving change, and overseeing day-to-day operations. The Chief Financial Officer (CFO) is responsible for managing the corporation’s financial risks and reports directly to the CEO and board of directors. The Chief Operating Officer (COO) is responsible for the daily operation of the company and may also hold the title of President, making them the second in command, especially if the highest-ranking executive is the Chairman and CEO.

To help assess the quality of a stock’s management, consider asking yourself the following questions when conducting a management evaluation.

Note: Smaller companies may have individuals holding multiple job titles.