The role of company meetings in long-term investing - part one

Part One: Why We Value Company Meetings 

You will often hear fund managers talk about how many company meetings they take in a year, offering it as a point of difference in their research process. More is often seen as better and whilst we have no reason to question the value of a large volume of meetings, not a lot is said about why they are important or what insights they help managers to extract in informing investment decisions.

Over a three part series, we will endeavour to shed light on the role company meetings play in our process, what a good one looks like, what some pitfalls are, and how we use them to help make investment decisions. We will also provide real life examples from meetings we have conducted.

The Aoris approach

Our investment approach is centred around making relatively few, but sound decisions. The quality of these decisions hinges directly upon how well we understand the businesses we invest in.

Company meetings play a key role in sharpening that understanding. They may offer a layer of insight that rarely appears in financial reports or investor presentations. Like peering under the bonnet of a car to assess the engine, directly engaging with companies helps us assess risk more effectively and uncovers the nuances of what makes a business truly special.

Why do we conduct company meetings?

We aim to speak with companies at least twice a year, in addition to in-person meetings. In 2024, we held 103 calls and 73 in-person meetings. The number itself doesn’t matter, but it does reflect a regular cadence we hope to maintain.

We don’t rely on sell-side research. We develop independent views, and company meetings are a key input in that process.

They serve two main functions:

1. They offer insight into management’s thinking and company culture.
2. They help us calibrate risk.

How company meetings give us insight into management mindset and culture

To appraise the trajectory of a business, we need to understand how management think. Management are the hands at the wheel of a company, their choices setting its course. Company meetings help us understand those decisions and the rationale behind them.

Equally telling is what isn’t said. People talk about what matters most to them. This reveals management’s priorities and how aligned they are with our investment philosophy. Strong management teams tend to have a clear, consistent message. Their strategic direction is unmistakable.

Company meetings also help us understand culture, which often distinguishes exceptional companies from the rest. What a business does matters, but how it does it often matters more. This rarely appears in financial statements.

For instance, last year we met with Amphenol (NYSE: APH), one of our portfolio holdings. Despite a US$80 billion market cap, its spartan offices in suburban Connecticut immediately signalled a culture of humility and cost discipline. Our meeting focused not on short-term numbers, but on Amphenol’s decentralised culture and operating structure. Over time, most firms drift towards centralisation. Amphenol actively resists this, defending the independence of its 140 business leaders. That entrepreneurial spirit is Amphenol’s edge. It underpins the firm’s leading margins and ability to take market share. Our meeting with the company gave us a deeper appreciation of its unique culture, and confidence in the business’s long-term success.

How company meetings help us calibrate risk

We try to avoid businesses with wide-ranging or unpredictable outcomes. Company meetings help us test and refine our view of a company’s risk profile.

With each interaction, we ask whether the business is likely to be stronger a decade from now. We examine its model, competitive advantages, and potential vulnerabilities. We’re also probing the ways in which its growth in earnings and intrinsic value could be undermined.

In a recent meeting with L’Oréal (EPA: OR), we explored how weaker beauty spending in China might affect its long-term earnings. Demand in the region has softened, but the company continues to innovate and gain share. More importantly, its growth isn’t concentrated in one market. L’Oréal has strengthened its presence in Europe and the US and is capturing growth in India and Brazil. The meeting reinforced our view that it is a well-balanced business, unlike Estée Lauder, which is more dependent on China.

Meetings also help us assess how consistent a company is over time. Sudden changes in messaging can indicate drifting priorities or weaker strategic direction. When actions align with past statements, our confidence tends to increase.

We also monitor subtle shifts. Minor changes can accumulate and lead to significant outcomes. On their own, they might not appear material. But over time, they can alter the risk profile of a business. Regular engagement helps us stay alert to these developments.

Closing thoughts

Company meetings are a valuable part of how we deepen our understanding of a business. They give us insight into how management think, how culture shapes decision-making, and where risk may be building. But like any input, they must be interpreted carefully. 

In Part Two of this series, we discuss the potential pitfalls of company meetings. Specifically, how their effectiveness can be undermined by our own psychological biases.