The Australian - The Deal - - News/People/Events -

What makes a good chief ex­ec­u­tive? Next month’s is­sue of the deal will fea­ture the mag­a­zine’s an­nual CEO of the Year award. Last year’s in­au­gu­ral win­ner was Tel­stra’s David Thodey, and the run­ners-up were ANZ’s Mike Smith, Vir­gin Aus­tralia’s John Borghetti, Qan­tas’s Alan Joyce and Graincorp’s Ali­son Watkins.

We will again be look­ing for a chief ex­ec­u­tive with a strong fo­cus on de­liv­er­ing long-term, sta­ble re­turns to share­hold­ers. The process will in­volve ex­am­in­ing the per­for­mance of ASX-listed com­pa­nies us­ing the Con­scious In­vestor model de­vel­oped by the Team­in­vest share­holder dis­cus­sion group. This has the ad­van­tages of be­ing in­de­pen­dent of any bro­ker or in­vest­ment bank and be­ing based on the prin­ci­ples of US bil­lion­aire War­ren Buf­fett. (See Wealth, page 41.)

Buf­fett shies away from com­pa­nies with high debt lev­els and be­lieves that in­vestors must fac­tor in a safety mar­gin when as­sess­ing risk. He also be­lieves that not los­ing money – or spend­ing time avoid­ing in­vest­ments in com­pa­nies that could lose money – is as im­por­tant as look­ing for win­ners.

Buf­fett’s phi­los­o­phy, his share­holder let­ters (berk­shirehath­ and his an­nual meet­ing, held each May in Omaha, Ne­braska, are at­tract­ing grow­ing in­ter­est from Aus­tralian in­vestors, in­clud­ing the mem­bers of Team­in­vest. Other long-time lo­cal Buf­fett fans in­clude for­mer UBS chief Chris Mackay, who founded

the Mag­el­lan Fi­nan­cial Group. Buf­fett’s in­vest­ment philoso­phies are born of his no-non­sense up­bring­ing in the US Mid­west and his time at New York’s Columbia Univer­sity, where he be­came a fol­lower of Ben­jamin Gra­ham, author of the fa­mous book

The In­tel­li­gent In­vestor.

Team­in­vest uses its own Buf­fett-style fil­ters when eval­u­at­ing com­pa­nies, in­clud­ing an as­sess­ment of ex­ec­u­tive re­mu­ner­a­tion poli­cies and the ethics of se­nior man­age­ment. “Many com­pa­nies are run for the ben­e­fit of the board and the man­age­ment and not for the ben­e­fit of share­hold­ers,” Syd­ney busi­ness­man and Team­in­vest co-founder Howard Cole­man says.

the deal will add a few fil­ters of its own to sort the can­di­dates for CEO of the Year. Find out who wins in the next is­sue, out on Fri­day, Septem­ber 20.

The or­a­cle of Omaha, War­ren Buf­fett, be­lieves that not los­ing money is just as im­por­tant as mak­ing it.

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