Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 151

Why bother with company visits?

As an institutional investor, each year we arrange in excess of 1,000 face-to-face meetings with the management of companies and site tours of their operations. The visits provide deep insights into a business and its operations and are critical to our investment decision-making process.

But with companies required to disclose to all investors material information about their business, why bother with company visits?

The continuous disclosure regime

Pursuant to ASX Listing Rule 3.1, market participants are required to immediately disclose to the market all material information about their business, with the exception of confidential information. The Australian Securities and Investment Commission (ASIC) is charged with market surveillance and enforcing the continuous disclosure obligations. Commissioner John Price explained the regulator views continuous disclosure by companies as:

 “a bedrock of market integrity … essential to two of ASIC’s priorities: fair and efficient markets and confident and informed investors.”

Over the past decade, compliance with the market’s continuous disclosure rules has been significantly tightened. In August 2010, ASIC took over responsibility for supervising trading activity in Australia’s domestic financial markets from the Australian Securities Exchange (ASX). Since this time there has been a marked increase in insider trading prosecutions. In 2013, ASIC implemented the Market Analysis and Intelligence (MAI) surveillance system enhancing the regulator’s ability to monitor market activity. ASIC can now conduct real time surveillance of market trading activity and has the ability to analyse large data sets to identify irregularities on a timely basis.

So then, with a rigorous continuous disclosure regime requiring companies to disclose to all investors material information, what do we achieve by visiting so many companies?

1. Efficiently gain insights

Compared to a day spent researching and analysing public information on a company at a desk, a one-hour meeting with a company’s CEO discussing their business allows us to quickly ascertain how they generate profit. It helps us to determine a value for the business. With limited sell side analyst research available on the majority of the 2,000 plus ASX-listed companies (that is, those falling outside of the S&P/ASX 300 Index), company meetings are particularly critical.

2. Assessing management

Our assessment of a company’s management team is critical to our overall valuation of a business and one of the most important factors informing our investment decisions. We gather some of our most valuable insights about a CEO and senior executives in our face-to-face meetings. Much like in job interviews, we generally form a view of a person within the first one to two minutes. We gain a powerful impression by observing the body language and the overall demeanour. For example, whether they maintain eye contact and what their posture is. In addition to non-verbal communication, a person’s tone of voice and how they interact with their colleagues is import. Meetings help our understanding of management’s motivations and ensure their interests are aligned with their shareholders.

3. Understanding culture

One of the key filters we apply when making an investment decision is looking for positive corporate culture. Research demonstrates a strong correlation between a company’s culture and its financial performance. A good corporate culture is more important than ever to attract younger talent with Millennials (the generation following Generation Y) seeking more flexible work arrangements. For example, an increasing proportion of teaching graduates are now preferring part-time to full-time positions for flexibility.

As a general rule, annual reports and other reported information provide very limited insights into a company’s corporate culture compared with a meeting. A meeting or site tour allows us to truly gauge the state of a company’s culture. For example, we can observe how a manager engages with their staff at all levels of the business.

Silver Chef Limited (ASX: SIV) is a company we hold in the highest regard for their corporate culture (disclaimer: we also invest in this company). Providing hospitality equipment funding, Silver Chef is committed to giving back to society (through support for Opportunity International) and to contributing to employees’ wellbeing by promoting values of work-life balance, health and happiness.

4. Deeper understanding of financials

Financials are the life blood of a business and in making our investment analysis, reconciling cash flow is our focus. Frequently, our investment team has questions for the Chief Financial Officer about a company’s reported financials. If we are not satisfied with management’s responses, for example, questions about the numbers cannot be answered or we do not think they stack-up, we make a conclusive decision not to invest.

5. Determining consistency of ‘story’

At least every six months we meet with management after results are reported and each time we ask some of the same questions to ascertain if their ‘story’ remains the same. A lack of consistency in a company’s message over time raises concerns about their strategic direction and is a key factor impacting our investment decisions. In our view, the disciplined and consistent execution of a company’s strategy over time is a measure of management’s ability, as well as their trustworthiness.

6. Industry insights

Meetings with management are an important source of intelligence on the market in which the company operates, including their competitors. We gain insights from company visits that enhance our understanding of the industries in which we invest and their key drivers.

In summary, management meetings and company site tours are incredibly valuable for a range of reasons. In our view, company visits will always form the core of a ‘bottom-up’, stock picker’s investment approach.


Chris Stott is Chief Investment Officer at Wilson Asset Management (WAM). WAM will soon provide investors with access to research-driven and index-unaware funds management focused on Australia’s large-cap listed companies through its new listed investment company, WAM Leaders Limited (ASX: WLE). To find out more, see here.


What we look for on company site visits

You the speculator


Most viewed in recent weeks

Stop treating the family home as a retirement sacred cow

The way home ownership relates to retirement income is rated a 'D', as in Distortion, Decumulation and Denial. For many, their home is their largest asset but it's least likely to be used for retirement income.

Welcome to Firstlinks Edition 433 with weekend update

There’s this story about a group of US Air Force generals in World War II who try to figure out ways to protect fighter bombers (and their crew) by examining the location of bullet holes on returning planes. Mapping the location of these holes, the generals quickly come to the conclusion that the areas with the most holes should be prioritised for additional armour.

  • 11 November 2021

Welcome to Firstlinks Edition 431 with weekend update

House prices have risen at the fastest pace for 33 years, but what actually happened in 1988, and why is 2021 different? Here's a clue: the stockmarket crashed 50% between September and November 1987. Looking ahead, where did house prices head in the following years, 1989 to 1991?

  • 28 October 2021

Why has Australia slipped down the global super ranks?

Australia appears to be slipping from the pantheon of global superstar pension systems, with a recent report placing us sixth. A review of an earlier report, which had Australia in bronze position, points to some reasons why, and what might need to happen to regain our former glory.

How to help people with retirement spending decisions

Super funds will soon be required to offer retirement income strategies for members in decumulation. With uncertain returns, uncertain timelines, and different goals, it's possibly “the hardest, nastiest problem in finance".

Tips when taking large withdrawals from super

You want to take a lump sum from your super, but what's the best way? Should it come from you or your spouse, or the pension or accumulation account. There is a welcome flexibility to select the best outcome.

Latest Updates

Investment strategies

Charlie Munger and stock picks at the Sohn Conference

The Sohn Australia Conference brings together leading fund managers to chose their highest conviction stock in a 10-minute pitch. Here are their 2021 selections with Charlie Munger's wisdom as the star feature.


John Woods on diversification using asset allocation

All fund managers now claim to take ESG factors into account, but a multi-asset ethical fund will look quite different from a mainstream fund. Faced with low fixed income returns, alternatives have a bigger role.

SMSF strategies

Don't believe the SMSF statistics on investment allocation

The ATO's data on SMSF asset allocation is as much as 27 months out-of-date and categories such as cash and global investments are reported incorrectly. We should question the motives of some who quote the numbers.

Investment strategies

Highlights of reader tips for young investors

In this second part on the reader responses with advice to younger people, we have selected a dozen highlights, but there are so many quality contributions that a full list of comments is also attached.

Investment strategies

Four climate themes offer investors the next big thing

Climate-related companies will experience exponential growth driven by consumer demand and government action. Investors who identify the right companies will benefit from four themes which will last decades.

Investment strategies

Inflation remains transitory due to strong long-term trends

There is momentum to stop calling inflation 'transitory' but this overlooks deep-seated trends. A longer-term view will see companies like ARB, Reece, Macquarie Telecom and CSL more valuable in a decade.


Infrastructure and the road to recovery

Infrastructure assets experienced varying fortunes during the pandemic, from less travel at airports to strong activity in communications. On the road to recovery, what role does infrastructure play in a portfolio?


The three prices that everyone should worry about

Among the myriad of numbers that bombard us every day, three prices matter greatly to the world economy. Recent changes in these prices help to understand the potential for a global recovery and interest rates.



© 2021 Morningstar, Inc. All rights reserved.

The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.

Website Development by Master Publisher.