Audinate founder appointed as CEO

Aidan Williams, Audinate's co-founder and chief technology officer, has been one of the many things we've liked about the company since we upgraded it last year, and we're delighted to hear that he's now been appointed chief executive.

He will replace Lee Ellison, who will leave the company on 30 September after 11 years. The company has been working on the transition for a year, which might explain Williams's presence at shareholder briefings and gives confidence that it will proceed smoothly.

John Addis's recent series on The changing face of investing talked a lot about the importance of culture and this appointment hits all the right notes.

For one thing, it's an internal appointment. An insider already knows everyone - how they work and how to manage them - and their appointment can inspire the next generation of potential leaders. An internal appointment should also provide continuity, which is what we want for a company with such a successful track record. There is no need for a new broom here.

It's also great to see the chief techie getting the top job. Other companies might need more of a salesy-type as chief executive, but not Audinate. Its customers are manufacturers of audio equipment and the sales process is as much about helping them put products together as anything else. In the 2018 financial year, marketing expenses came to just 12% of revenue, while research and development amounted to 29%.

Perhaps the main downside is that Williams will no longer be directly overseeing technology - but at least he'll be well placed to appoint a successor and monitor progress.

Of course, a chief executive also needs to understand business strategy. But, while Audinate has complex technology, it is not a complex business, and everything we've heard from Williams over the past year suggests he understands it well and takes a long-term view. (See our video with him from April last year, for example). With 1.8m shares, currently worth around $14m, his interests should also be closely aligned with shareholders. HOLD

Disclosure: The author owns shares in Audinate.

Note: Our Model Growth Portfolio owns shares in Audinate.

Note: The Intelligent Investor Equity Growth Fund owns shares in Audinate.