7 Signs of a Shareholder Friendly Management - What to Look for and Why

Who you go into business with is sometimes just as important as the quality of the business itself. As an investor, the integrity and priorities of management can have a very real, direct influence on the value of your holdings. Over a long enough period of time, the difference can be staggering to your net worth.

In one extreme, you have businesses such as Fastenol and Masco which, during different decades, created huge returns for owners. The CEO of the former company has been awarded the "Cheapest CEO in America" award because, among other things, he requires employees to glue old pieces of paper together to form notepads in order to save money. Now that is shareholder friendly! Is it any wonder that the stock has grown at over 35% for roughly a decade under his guidance? On the other hand, you have folks such as those at Enron that used the company for status and class, ignoring the underlying fundamentals.

Although no guarantee, there are at least seven different signs that can indicate you are dealing with a management sympathetic to your cause.