Assessing management quality is clearly one of the most important aspects of an investment decision. To a large extent, equity investors put their hard-earned capital into the hands of management and count on it being employed skilfully and honestly. When that doesn’t happen, losses typically follow.

“We tend to be more about the jockey than the horse. It’s important to understand how people are going to behave under stress. You don’t have to predict the future if you know the company has the assets and management to do well in difficult times. That’s when the seeds for exceptional performance are planted.” Bruce Berkowitz, Fairholme Capital

“I’m at a stage in my career where I’d say human behaviour is the most important determinant of a business’s long-term success. I don’t care how smart an analyst you are; you can’t really know what’s going on inside a business. We want to invest not only in highly capable managers but also in those with clear records of integrity and acting in shareholders’ best interests. I’ve found that when a manager puts his hands in shareholders’ pockets once, he’s much more likely to do so again.” Charles Akre, Akre Capital