Manager favors decentralized companies in picking global small caps

One of the key advantages of decentralized companies is that they can make quicker decisions and are not hampered by cumbersome bureaucracy, says Mawer’s John Wilson

Michael Ryval 31 January, 2019 | 6:00PM

Understanding how a small company meets the challenge of growth is a fine art. John Wilson, an equity analyst and member of the team that oversees the 5-star, gold-rated  $2.5 billion Mawer Global Small Cap A, argues that it’s particularly useful to focus on those companies that have decentralized operating structures in order to manage their growth.

“One of the things that we talk a lot about here is being in ‘the right part of the forest.’ That basically means lining up several attributes that put the odds in your favor,” says Wilson, who is based in Toronto, although Mawer Investment Management Ltd. is based in Calgary. “The base line is around management and having a good business model. Included in that [framework] is that a decentralized structure can be helpful. It is not a silver bullet. But it can be a component that helps with [completing] the formula.”

Referring to “Drive: The surprising truth about what motivates us,” a 2010 management bestseller by Daniel Pink, Wilson notes that employees are motivated by three job characteristics: autonomy, mastery and higher purpose. “A decentralized structure can allow employees to experience these things. They can impact your culture, which is one of the things we look at when we evaluate companies.”

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Michael Ryval

Michael Ryval