MUMBAI: Emkay Investment Managers Ltd (EIML) has released a book on E-Qual, its proprietary framework institutionalized/formulated by the firm to evaluate the corporate governance aspect of management quality. The book was unveiled by Mr. Gurcharan Das, renowned author, an advocate of governance and former CEO of Procter & Gamble India.
The book explains the conceptual analogies of the E-Qual framework in detail. E-Qual is a time-tested model applied to the wealth-creation strategies of EIML. While valuing a company, the risk-adjusted returns are best captured with the E-Qual model, which helps calculate qualitative risk objectively that is not captured in P&L or balance-sheet like management integrity & capability, distribution of shareholder wealth like their dividend policy, investor communication & liquidity. Cumulatively, 70% weightage is assigned to the 2 core qualitative risk parameters of Management Integrity and Management Capability.
The trend of ESG compliant investment is picking up pace lately in India, but at EIML – the prime focus for many years has been to review the management quality, the prevalent corporate governance practice at the companies. The focus on management quality has ensured a track record of zero blowouts over the past 10 years with all investments. Management integrity and capability are two non-financial but qualitative metrics that can provide a sense of future returns. High standards of corporate governance are critical for long-term and sustainable growth. It not only benefits the company but all stakeholders involved. At EIML, the belief is that wealth creation is not possible without quality management and high standards of governance. Transparency and sound business ethics are hallmarks of strong corporate governance and ensure business risk mitigation.
Unveiling the book, Mr. Gurcharan Das, Management Consultant and Author said, “I have been a client of Emkay Investment Managers for over ten years and have seen them implement sound processes and practices for stock selection, that help preserve investors’ wealth. E-Qual is a strong governance framework that has ensured that low-quality stocks do not enter a client’s portfolio. I am sure the book will help investors understand the importance of governance in-stock selection.
Speaking on the book launch, Mr. Krishna Kumar Karwa – Managing Director, Emkay Global Financial Services said, “This is a first of its kind book that emphasizes the importance of quality management and corporate governance in a given company. Quality management with a proven track record ensures long-term wealth creation for all stakeholders. The E-Qual framework has helped us achieve the goal of capital preservation and wealth creation for our clients and through this book, we wish to spread the message of the importance of governance, far and wide”
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