We here at The Motley Fool believe that an important component of a great investment is good management. But what constitutes good management? I sat down with analysts Rich Greifner (TMFTenacious) and Matt Argersinger (TMFMattyA) to find out.

This is part one of two.

The Brothers Gardner believe strongly that good management is a key component of a great company. What does "good management" entail?

Argersinger: A good manager delivers superior returns to her shareholders through thick and thin over long periods of time. To do that, I think a good manager has to know her industry like the back of her hand, know what her competitors are up to, and where to best invest her company's capital to generate high rates of return.

Greifner: A good manager takes care of his company's customers, employees, and shareholders. It's very difficult to please all three groups simultaneously, but good managers find a way to get it done.

How important is management alongside the other things an investor might look at in a potential stock purchase? Steve Jobs of Apple (Nasdaq: AAPL), for example, is clearly directing the company into incredible innovation and profitability, but he doesn't fit many of the usual categories of good management.

Argersinger: Management ranks right up there with market opportunity and competitive position in my stock selection process. Because of that, I always take a long, hard look at my CEO's capital allocation prowess, her management incentives, and her ownership stake in the company -- in that order.

Steve Jobs may not be the most shareholder-friendly CEO, but he sure has made his shareholders a bundle of money during his tenure at Apple by masterly allocating Apple's capital into high-return investments. That helps me overlook some of his more overt deficiencies.

I'm a big fan of Bobby Kotick, CEO of Activision Blizzard (Nasdaq: ATVI), as well. He's awarded himself tens of millions in stock options over the years, but he also took a $50,000 investment and turned a struggling game developer into the biggest video game company on the planet that is now valued at more than $14 billion.

Greifner: It's no secret that I think Jobs is a lousy corporate leader. Don't get me wrong -- the man is a visionary genius and he has been the driving force behind much of Apple's success. But he has repeatedly placed his own interests ahead of Apple's shareholders. That's behavior I simply can't condone.

For me, management is a key component of stock selection, right up there with competitive advantages and valuation. You can achieve stock market success by focusing on only one or two of these attributes, but when all three come together you get the potential for long-term lollapalooza effects.

When we talk about management, we're usually talking only about the one or two or three people at the top. How vulnerable are companies with good management to changes in that management?

Argersinger: I'm pretty sure I read somewhere that the average CEO's tenure these days is something like 4 years. You can bet it's the same for the CFO, COO, and other top executives. Management teams constantly playing musical chairs infuses short-term mindedness and can have a detrimental effect on a company's long-term competitive position and culture.

The best way to solve for this as an investor is to concentrate your portfolio in companies that have founder owners at the helm, managers with significant personal and/or financial stakes in the business. Reed Hastings of Netflix (Nasdaq: NFLX) or Phil Knight over at Nike (NYSE: NKE) are great examples of CEOs who started their companies from scratch, delivered great returns to their shareholders, still own significant personal stakes, and would never walk away for a bigger salary someplace else.

Greifner: Less than you'd think. Good managers live and breathe their business and wouldn't consider jumping ship for another position at any price. For example, Costco Wholesale (Nasdaq: COST) CEO Jim Sinegal has repeatedly resisted raising his salary (even though the company's compensation committee has suggested that he is underpaid). In a similar vein, Under Armour (NYSE: UA) CEO Scott Plank voluntarily reduced his compensation from $1.5 million to $30,000 in 2008, since the company failed to achieve its revenue and operating margin targets.

In addition, I believe both of these CEOs have instilled a culture at their companies that will live on long after they are gone.

Tomorrow I'll ask Rich and Matt to talk about management across different industries and to let us in on the secrets of their most favorite and least favorite managers. Got a favorite? Share in the comments box below.

Julie Clarenbach owns shares of Apple. Matt Argersinger has written puts on Activision Blizzard. Rich Greifner owns shares of Activision Blizzard. Costco Wholesale is a Motley Fool Inside Value recommendation. Under Armour is a Motley Fool Rule Breakers selection. Apple, Activision Blizzard, Costco Wholesale, and Netflix are Motley Fool Stock Advisor picks. Under Armour is a Motley Fool Hidden Gems choice. Motley Fool Options has recommended a synthetic long position on Activision Blizzard. The Fool owns shares of Activision Blizzard, Costco Wholesale, and Under Armour. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.