LONDON -- Management can make all the difference to a company's success and thus its share price.
The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.
In this series, I'm assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today I am looking at Randgold Resources (ISE: RRS.L) (NAS: GOLD) , the only gold miner in the FTSE 100.
Here are the key directors:
D. Mark Bristow
Philippe Lietard joined the board in 1998 and became chairman in 2004, stepping in to replace the previous chairman who was then facing fraud charges. Formerly a corporate and project financier with UBS, Lietard spent much of his career with the World Bank and IFC, mainly in the minerals business in Africa. That gives him excellent credentials and contacts to smooth Randgold's relations in Africa where all its mines are located, notably in Mali which was recently subject to a military coup.
A geologist by training and a former South African Army officer, Mark Bristow has been CEO of Randgold since its incorporation in 1995. His name is synonymous with the company, which was listed in 1997 with a market value of 100 million pounds and has since grown into a 7 billion pound company. He completed a 6,500 mile motorcycle ride in support of African charities earlier this year, and has been closely associated with the development of the mining industry in Africa.
A chartered accountant, Graham Shuttleworth joined the board as finance director in 2007. Prior to that, he was head of metals and mining in the Americas for HSBC. He was part of Randgold's management team when it listed in 1997 and has also been involved with the company as an advisor.
Randgold's five non-execs predominantly have backgrounds in mining and banking, with impressive-looking CVs. They appear to be based on at least three different continents, in part a consequence of Randgold's offshore Channel Island domicile, but which must hamper informal communication between the (exclusively male) board members somewhat.
Randgold executives are required to hold company shares worth at least twice their base salary, but they substantially exceed this with Mark Bristow's holding valued at 56 million pounds. It's good to see a chairman with a substantial (2.7 million pound) holding, something of a rarity in the FTSE 100.
I analyze management teams from five different angles to help work out a verdict. Here's my assessment:
1. Reputation. Management CVs and track record.
2. Performance. Success at the company.
3. Board Composition. Skills, experience, balance
4. Remuneration. Fairness of pay, link to performance.
5. Directors' Holdings, compared to their pay.
Overall, Randgold Resources scores 20 out of 25, an excellent result. The management team, including the chairman, are experienced and impressive.
I've collated all my FTSE 100 boardroom verdicts on this summary page. I hope it helps with your analysis.
Buffett's favorite FTSE share
Let me finish by adding that legendary investor Warren Buffett has always looked for impressive management teams when pinpointing which shares to buy. So I think it's important to tell you that the billionaire stock-picker has recently acquired a substantial stake in a prominent FTSE 100 company.
A special free report from The Motley Fool -- "The One U.K. Share Warren Buffett Loves" -- explains Buffett's purchase and investing logic in full.
And Buffett, don't forget, rarely invests outside his native United States, which to my mind makes this British blue chip -- and its management -- all the more attractive. So why not download the report today? It's totally free and comes with no further obligation.
Are you a sophisticated investor hoping to profit from this uncertain economy? We urge you to read "10 Steps To Making A Million In The Market" today -- your wealth could be transformed. Click here now to request your free, no-obligation copy. The Motley Fool is helping Britain invest. Better.
Further Motley Fool investment opportunities:
The article Who Runs Randgold Resources? originally appeared on Fool.com.
Tony Reading owns shares in HSBC but no other shares mentioned in this article. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.