My Verdict on 5 FTSE Boardrooms

LONDON -- 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 recent weeks, I've assessed the boardrooms of five companies within the FTSE 100: Diageo , ITV , William Morrison , SABMiller and Tate & Lyle . Today I am going to summarize what I found.

Five FTSE boardrooms
I analyze management teams from five different angles, giving each a score out of five to make a maximum score of 25. Here's my overall assessment:

There's some speculation that Walsh may be preparing to call it a day. But chief operating officer Ivan Menezes looks to be being groomed to take over, and investors will be hoping that the board's careful succession-planning is as successful this time around.Diageo has gone straight to the top of the leader board. It has one of the longest-serving FTSE 100 CEOs in the form of Paul Walsh, who has been at the helm since 2000 and in senior management positions for many years before that. Diageo's shares have tripled in value during that time, while the FTSE has gone backwards. A combination of astute deal-making -- both selling and buying -- and good operational management has served the company well.

Turnaround
Unlike the smooth-running Diageo, ITV's board is still in the midst of a turnaround program. But results are starting to show through for the highly regarded team appointed in 2010: Chairman Archie Norman, the former ASDA CEO, and chief executive Adam Crozier formerly of the Football Association and Royal Mail. Would that Adam Crozier had as much skin the game as Paul Walsh: he has less than a fifth of last year's salary invested in his company's shares, while Mr Walsh has more than his massive 11 million pound 2011 pay packet in his.

Tate & Lyle's name may still be synonymous with sugar, but one of the first things CEO Javed Ahmed did on taking up the post in 2009 was to sell the company's sugar refining business and Lyle's Golden Syrup brand name. It was part of a refocusing of the group which has seen the share price make steady progression under Ahmed's stewardship. Chairman Sir Peter Gershon is one of the few people who chairs two FTSE 100 companies: he also chairs National Grid.

Transformation
Shareholders have little to complain about SABMiller's performance. But management is undergoing transformation, with the former CEO of 13 years having now stepped up to be executive chairman, while the chief operating officer is embedded as CEO-designate. With 13 non-execs including seven representing two large shareholders, governance looks clumsy.

The team running William Morrison are the first generation after Sir Ken Morrison's reign. Dalton Philips was a surprise appointment as CEO in 2010, being little known in the U.K. He had been chief operating officer of Canada's largest retailer and ran Wal-Mart's German chain. With the finance director due to step down and a small board with little retail experience, the board looks a little weak.

I've collated all my FTSE 100 boardroom verdicts on this summary page and you can read more detail about each company's board by following the links. I hope my research can assist your investment decisions.

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.

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The article My Verdict on 5 FTSE Boardrooms originally appeared on Fool.com.

Tony Reading owns shares in Diageo and National Grid but no other shares mentioned in this article. Motley Fool newsletter services have recommended buying shares of Diageo and National Grid. The Motley Fool has a disclosure policy.
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