When we made the decision to become an EMD back in 2012, we
saw the industry had potential as it began to become more regulated.
Some people wish for the old days, but I believe that accountable
regulation is good for investors and what is good for investors is
good for our industry. One thing we demanded from the regulators
was the obligation to provide audited financials for OM product.
What is the use of having MBAs, CFAs, CPAs if you can’t use their
financial training to make proper assessments regarding an
investment opportunity?
As of the end of 2016, OMs are now mandated to provide audited
financials. Some felt that this would be enough to provide us with
better information to make investment choices. Although audited
financials are useful, please remember what all auditors like to put
in the fine print “we’re not responsible for the information in the
audit as we rely on management to disclose information and that
past performance doesn’t guarantee future performance”. I’m
paraphrasing but our thoughts on audited financials is they give us
a photo in a time of history but if things go bad, they merely tell
you sooner than later that you are screwed. Audited financials are
no protection from bad investments as we have seen in major
meltdowns like Enron and Nortel.
tion. We will be demanding issuers to begin to implement fundamentals like transparency, accountability, conflict of interest and proper
oversight to ensure management is executing the business plan that
has been disclosed in the OM. We expect independent Board or
Trustees to hold management accountable and disclose to
shareholders or unitholders when management is in conflict or not
putting the interest of investors first.
We have seen too many times where the management are the
directors and there is little control or say for investors. When things
go bad, unaccountable managers try to cover their mistake rather
than try to fix it. Proper oversight provides accountability for
investors by asking tough questions, the ability to replace
management and sound the warning bells to investors if things are
not being addressed. Conflict is good in the boardroom, but a proper
board should also provide management with advice, knowledge and
a somber second thought before making major decisions. For the
issuer, this is not about interfering with day to day operations.
Strong board members bring experience and should have the
philosophy of “Nose in, hands out”.
Fortunately, there are experienced board members across the
country that are literally a click a way to help. From our dealership
perspective, we will encourage our issuers to search out these future
directors from the Institute of Corporate Directors (ICD). The ICD
provides courses and designations for people that want to learn to
be better directors and companies that want better oversight. There
are over 12,000 people that have taken the course and they all have
unique backgrounds and skills that could benefit our market.
Our future is bright. Private equity and alternative investments are
much needed in any well diversified financial portfolio. As we
evolve as an industry, we will grow, we will stumble but we will
learn to be better. Corporate governance will be a key factor in
helping us protect investors from mishaps.
I say to you as a dealing representative in the EMD sector that
product today is better than yesterday, and tomorrow’s opportunities
will be better than today.
There is the old saying in real estate, the three
things you look for are location, location,
location. Investing in any business, the three
things you look for are management, track
record and trends.
Craig Burrows, ICD.D
President & CEO, TriView Capital Ltd.
cburrows@triviewcapital.com
There is the old saying in real estate, the three things you look for
are location, location, location. Investing in any business, the three
things you look for are management, track record and trends. As
we grow as an industry, we’re able to review track records of issuers
and EMDs for that matter. We can take advantage of growth trends
like cannabis, cryptocurrency and AI technologies to measure
against tried and true investments that have proven strong
management. If you can find an investment opportunity that has
proven management, track records and trends; the likelihood of
success grows exponentially.
The area that we want our industry to focus on for 2018 and beyond
is corporate governance. Proper corporate governance begins with
“tone at the top” of any organization that flows through the organiza-
