‘Investors need to push for appropriate incentives’

As a fund manager, he saw the world in terms of productivity and investment and wanted businesses to thrive, Allan Gray’s chief investment officer, Andrew Lapping told a group of financial advisors at the Investment Forum 2018.

To determine what was really going on in a business, investors required facts, Lapping said.

“The strange thing is management often actually try and obscure the truth from you as an investor. They are not necessarily frank.”

Moreover, if management is trying to obscure the truth, the chances that a non-executive director would be able to see what was going on are extremely slim, he added.

“How many non-executive directors actually have the skills and the knowledge to stand up to an executive team – and usually people who become the CEO of a company are pretty powerful characters – to stand up and say: ‘Well, actually I don’t think this is right. We shouldn’t be doing this or what about this?’ I would hazard a guess – it is difficult,” Lapping said.

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