Why worry about governance when a company shows strong economic and stock market performance?
In a video capsule, the president and co-founder of Medici, Carl Simard, answers this question, alongside portfolio manager and partner Philippe Veilleux.
As our expert duo explains, exemplary governance is the foundation of lasting success. It is in fact one of the four fundamental aspects of our investment strategy.
Carl and Philippe cite examples of poor governance that led to the decline of otherwise fast-growing companies. They notably discuss the fate of the BlackBerry phone creator, Research in Motion (RIM). The Ontario-based manufacturer suffered a spectacular decline after underestimating competition from the iPhone and due to external distractions that its leaders succumbed to.
The managers also highlight the importance of executive compensation, a crucial aspect of governance. They note that it must be evaluated in light of governance, thus identifying the risks that may be associated with it.
Watch the video—in French—to discover the consequences of a poorly designed compensation model and other essential elements related to governance.
