Ingredients of a Good Corporation

Employee Ownership

Employee Stock Ownership Plans (ESOP) can spread the value of the company amongst those people who have the greatest opportunity to evolve the business and increase that value. Whether the ESOP holds just 5% of the stock of a corporation or more than 50% it acts as a huge motivator to the employees, reducing employee absenteeism, increasing staff retention and greatly increasing job satisfaction for the employees. Employees in companies with good Employee Stock Ownership Plans feel respected and involved in the business and begin to "think like owners".

Quality Balance Sheet

A ruthless focus on core competencies is both capital efficient and helps the corporation to maintain it's competitive edge. A significant competitive advantage is more easily gained by focussing on core competencies. This competitive advantage usually translates to retainable margins and with continued focus on low operational costs will lead to a greater market share.

A revenue driven culture without focus on cost is poor in capital efficiency and vulnerable to competitive pressure from more capital efficient operations.

Enhanced customer focus - Outsource anything that is not a core competency, except the customer relationship, the brand and the knowledge which is core to the value.

Times Change and spinning off non-core businesses will avoid the pitfalls of intensive capital expenditure in non-core business lines.

The result - A corporation maximizing free cash flow through quality balance sheet efficiency.

Recurring and predictable earnings

An upward trending base of recurring and predictable earnings, in all major business segments, provides confidence to investors, customers and employees that the business on which they rely will be here in the future.

Diverse Products and Distribution

A breadth of product offering, diversifies a corporation's sources of earnings, thereby reducing the risks created by changing market environments and allowing participation in the fastest growing segments.

Diverse product distribution increases the market reach of a corporation while reducing the competitive risks inherent in any one product distribution method. The diversity of product distribution remains essential although the distribution methods will typically evolve over time as technology and opportunity create new possibilities.