The work force and quality of management are not assets on the balance sheet, so their value needs to be determined by the analyst. Jarislowsky feels that this is the most valuable asset the company has.
Analysts should understand the CEO's job, the strategic direction and be able to measure and follow progress of the plan with the quarterly reports. In addition to the CEO, every lead director's job should be understood by the analyst. Jarislowsky feels that a good analyst needs to look beyond the numbers and assess management because it is the only valid indicator that allows you to predict the future of the company! If the company has a sound culture and great people then people will know what to do when things change and will be working hard for the long term success of the company. A great management team is key to unlocking the potential of a company's workforce.
Jarislowsky is skeptical of mergers and acquisitions because he knows how hard it is to successfully integrate different cultures. A company's culture is vital to having people believe in what they are doing and knowing how to act properly in their jobs.
He closes by emphasizing how important access to knowledgeable people are in the different industries and companies that are being analyzed. Leaving too many "stones unturned" as he puts it, can lead to permanent losses with your investments. So don't leave out management assessment in your valuations.