Small-Cap Institute Presents...

It’s one thing to have a great career in investment banking, a standout career in law, or be a long-tenured institutional investor; Joseph Manko, Jr.* has done all three. In his senior role at The Horton Fund, Joe now has a front row seat daily to the unique boardroom challenges faced by small-cap companies. SCI is confident that you’ll learn from his candid, poignant observations.

It’s one thing to have a great career in investment banking, a standout career in law, or be a long-tenured institutional investor; Joseph Manko, Jr.* has done all three. In his senior role at The Horton Fund, Joe now has a front row seat daily to the unique boardroom challenges faced by small-cap companies. SCI is confident that you’ll learn from his candid, poignant observations.

Caroline discusses several large-cap governance best practices that she believes are critical to small-cap boardroom success: (1) ethics/compliance; (2) capital allocation oversight;  (3) diversity; and (4) CEO succession planning.

Long before turning 40, Caroline Tsay* had multiple large-cap senior operating roles in technology, and has also served on the boards of iconic American companies such as The Coca-Cola Company and Morningstar.  Now, nearly four years into running a software company she co-founded, there are few executives in the country who share her unique perspective about the large-cap – small-cap divide.  SCI couldn’t be happier to share some of Caroline’s thoughts.

One thing we hear constantly when speaking with accomplished CEOs is how key of a role their boards of directors played in their company's ultimate success, both in periods of growth and challenge. 

John Rogers hits on this exact point from the investor perspective.

SCI was fortunate to spend time speaking with John W. Rogers, Jr., Chairman, Co-CEO, and Chief Investment Officer of Ariel Investments.  Ariel manages in excess of $11 billion and started in 1983 with a core focus on small- and mid-cap companies.

Just as governing smaller companies is much different than governing enterprises, hiring employees is also different, according to Caroline.  Listen in particular to her thoughts about the importance of a prospective employee’s passion for the company’s mission, as well as their need for the type of job “certainty” that’s more common in larger companies.

Long before turning 40, Caroline Tsay* had multiple large-cap senior operating roles in technology, and has also served on the boards of iconic American companies such as The Coca-Cola Company and Morningstar.  Now, nearly four years into running a software company she co-founded, there are few executives in the country who share her unique perspective about the large-cap – small-cap divide.  SCI couldn’t be happier to share some of Caroline’s thoughts.

You could easily be convinced by reading The Wall Street Journal and listening to CNBC that shareholder activism is a large-cap phenomenon, but in reality the opposite is true.  Most shareholder activism is in small-cap companies, and the lion’s share of campaigns are waged due to improperly comprised boards.  When asked what most requires systemic mending in the small-cap ecosystem, Joe doesn’t hesitate; his primary focus is on boards that are principally comprised of the CEO’s friends, and his example will have every experienced small-cap investor nodding their heads in unison.

It’s one thing to have a great career in investment banking, a standout career in law, or be a long-tenured institutional investor; Joseph Manko, Jr.* has done all three. In his senior role at The Horton Fund, Joe now has a front row seat daily to the unique boardroom challenges faced by small-cap companies. SCI is confident that you’ll learn from his candid, poignant observations.

Every small-cap investor is concerned about revenue growth and profitability.  But executive compensation needs to be driven by incentives that are company specific versus one-size-fits-all.  Listen to Joe talk about one of his portfolio companies and how large a portion of executive compensation is focused upon key performance metrics other than EBITDA and revenue.  As Joe adroitly points out, getting executive compensation right is about in-depth company/industry knowledge as much as it is about what’s actually going to motivate a given management team.

It’s one thing to have a great career in investment banking, a standout career in law, or be a long-tenured institutional investor; Joseph Manko, Jr. has done all three. In his senior role at The Horton Fund, Joe now has a front row seat daily to the unique boardroom challenges faced by small-cap companies. SCI is confident that you’ll learn from his candid, poignant observations.

Attend any corporate governance continuing education program in the U.S. and you’ll likely be told that governance is essentially the same whether you’re governing a Fortune 50 company or a startup.  Unfortunately, few of those boardroom “experts” have ever actually been involved in small, high-growth companies, so they’re unaware that governance most definitely is not one-size-fits-all.  Caroline’s thoughts on the relevance of large-cap boardroom formality and how it relates to small company boardrooms are poignant.

Long before turning 40, Caroline Tsay* had multiple large-cap senior operating roles in technology, and has also served on the boards of iconic American companies such as The Coca-Cola Company and Morningstar.  Now, nearly four years into running a software company she co-founded, there are few executives in the country who share her unique perspective about the large-cap – small-cap divide.  SCI couldn’t be happier to share some of Caroline’s thoughts.

Part of being a successful small-cap investor is being a forensic observer.  Since so many small-caps aren’t covered by high quality equity research analysts, investors are left to uncover all the value – and risks – on their own.  If you think the term “forensic observer” is a bit overstated, you might think differently when you hear Mr. Rogers discuss who they hire to train their portfolio managers to expertly interview management teams.

We are constantly asked by small-cap officers, directors, and service providers whether corporate governance is something investors care about as much as they read in major business media.  Rather than paraphrase, you can just listen to Mr. Rogers for yourself; pay particular attention to the part where he discusses the nexus between subpar boards and… selling your stock.

SCI was fortunate to spend time speaking with John W. Rogers, Jr., Chairman, Co-CEO, and Chief Investment Officer of Ariel Investments.  Ariel manages in excess of $11 billion and started in 1983 with a core focus on small- and mid-cap companies.

It’s one thing to have a great career in investment banking, a standout career in law, or be a long-tenured institutional investor; Joseph Manko, Jr. has done all three. In his senior role at The Horton Fund, Joe now has a front row seat daily to the unique boardroom challenges faced by small-cap companies. SCI is confident that you’ll learn from his candid, poignant observations.

In this episode, Joseph discusses the key takeaways when meeting with management, and how the fund evaluates their investments from the ground up.

Long before turning 40, Caroline Tsay had multiple large-cap senior operating roles in technology, and has also served on the boards of iconic American companies such as The Coca-Cola Company and Morningstar.  Now, nearly four years into running a software company she co-founded, there are few executives in the country who share her unique perspective about the large-cap – small-cap divide.  SCI couldn’t be happier to share some of Caroline’s thoughts.

Smaller, high-growth companies often make the mistake of eschewing processes and tools that are foundational to how teams can work most effectively together.  Product management, project management, collaboration, and communication tools are just as critical in smaller companies.  So, too, is having clear company goals and objectives.  Listen carefully to what Caroline says about the need to manage and communicate with investors.

Small-Cap Institute's Amanda Gerut interviews Karen Zaderej. Ms. Zaderej is chairman, CEO, and president of Axogen Corporation (NASDAQ:AXGN).

Axogen (AXGN) is the leading company focused specifically on the science, development and commercialization of technologies for peripheral nerve regeneration and repair.

Karen served as Chief Executive Officer and as a member of the Board of Directors of Axogen Corporation since May 2010 and as Chief Operating Officer from October 2007 to May 2010 and as Vice President of Marketing and Sales from May 2006 to October 2007.

Small-Cap Institute's Amanda Gerut interviews WD-40 CEO, Garry Ridge.  Mr. Ridge is president and chief executive officer of the WD-40 Company (NASDAQ:WDFC). 

WD-40 Company is the maker of the ever-popular WD-40, as well as 3-IN-ONE Oil, Solvol and Lava heavy duty hand cleaners and X-14, Carpet Fresh, Spot Shot, 1001 and 2000 Flushes household cleaning products.

Garry has been with WD-40 since 1987 in various management positions, including executive vice president and chief operating officer and vice president of international. He has worked directly with WD-40 in 50 countries.

Garry Ridge has grown WD-40 Company (ticker: WDFC) 10 fold during his tenure as CEO. Garry states that the most important three words in the English language are "I don't know," and goes on to explain why he feels that way in this brief clip.