US-based WCM Investment Management has flagged the importance of assessing a company's corporate culture when building an investment portfolio.
In a statement by WCM, the California-based global equity fund manager’s co-chief executive and portfolio manager Paul Black said the company’s investment approach included assessing and identifying firms that had “a demonstrable competitive advantage” over their counterparts.
“This includes corporate culture – great companies tend to have great cultures,” Mr Black said.
He acknowledged that because culture could not be easily quantified, it was often overlooked in the investment process.
“We put a lot of emphasis on understanding the corporate culture of our holdings,” he said.
WCM has a dedicated analyst and methodology that were able to examine the corporate culture of companies.
A company with the best products, brand, reputation, policies, processes and history but a poor culture was unlikely to succeed when compared with a business with a healthier culture, Mr Black said.
“Despite those good products, you might find that many customers have complained about slow delivery, or poor service, or rude employees. These are all indicators of the health of a company's culture.
“In contrast, companies with great service and employees that go the extra mile rarely have complaints made against them.
“And if they are not making complaints, then customers will return to the better businesses, leading of course to better business results.”
AMP could face further risks according to analysts at Morgan Stanley, with the negative flow trends across the wealth giant expected to cont...
The wealth and trustee arm of MyState, TPT Wealth, has seen a slight increase of 1 per cent during the first quarter of financial year 2021,...