Planet MicroCap Podcast | June 29, 2016
For this episode of the PlanetMicroCap Podcast, I spoke with Adam J. Epstein, Founder of Third CreekAdvisors, LLC. Mr. Epstein is a former institutional investor, well-known speaker on corporate governance, and the author of the best-selling resource created specifically for small-cap corporate directors, titled, “The Perfect Corporate Board: A Handbook for Mastering the Unique Challenges of Small-Cap Companies.”
As defined by Investopedia, Corporate Governance, “is the system of rules, practices and processes by which a company is directed and controlled. Corporate Governance essentially involves balancing the interests of the many stakeholders in a company – these include shareholders, management, customers, suppliers, financiers, government and the community. Since corporate governance also provides the framework for attaining a company’s objectives it encompasses practically every sphere of management from action plans and internal controls to performance measurement and corporate disclosure.” You can probably imagine the implications of having good or bad corporate governance in a MicroCap company.
The goal for this episode is to learn about and define corporate governance, understand why this is important when doing your due diligence and what we can do as investors to better know what we’re getting on the corporate governance front in MicroCap companies.
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In this episode, Adam and I discuss the following topics:
– Mr. Epstein’s background
– Issues Third Creek Advisors helps pre-IPO and MicroCap companies with
– What Corporate Governance means and why is it important to keep in mind when looking at MicroCap companies
– As a MicroCap investor, what are some qualities that we should look for in a MicroCap board of directors as a whole and individually
– Typical reasons to change a board member
– What do you do when the board becomes completely uncooperative?
– Going back to one of your previous answers, you referenced shareholder activists. Is that a realistic concern for most micro-caps?
– Where most microcap boardrooms underperform
– Common governance shortcomings
– What can we do as investors to better know what we’re getting on the corporate governance front with micro-caps
– Do you have any stories, without using the names of the companies, that taught him the importance putting together a solid board
– Advice for new MicroCap investors when doing their due diligence on the board of directors of these companies