The Men Who Run BT Group

LONDON -- Management can make all the difference to a company's success -- and 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 (UKX). I hope to separate the management teams that are worth following from those that are not. Today I am looking at BT Group (LSE: BT-A.L) (NYSE: BT), the fixed line telecoms group.

Here are the key directors:                        

Sir Michael Rake was awarded his knighthood for services to accountancy. He worked for KPMG from 1974 to 2007, serving as chairman of KPMG International from 2000 to 2007. He became chairman of BT in 2007, and is also chairman of the airline easyJet and deputy chairman of Barclays.

Both those posts have put him in the news recently. At easyJet he has fought a long-running battle with disgruntled shareholder Stelios Haji-Ioannou. And before ruling himself out, he sharply divided opinion among Barclays' top shareholders as to his suitability to replace the outgoing chairman Marcus Agius.

Youngest FD
Ian Livingstone joined the board in 2002 as finance director, becoming chief executive of BT Retail in 2005 and CEO in June 2008. Previously he was the youngest FTSE 100 finance director while at the then-flourishing retailer Dixons, where he earlier undertook various operational and finance roles. His tenure as CEO has coincided with something of a renaissance in BT's fortunes, and its strong push into broadband.

The shares have done somewhat better than the FTSE in that time, though have lagged mobile operator Vodafone. The performance has handsomely rewarded Livingstone, who received remuneration of 7.7 million pounds last year through a three-year turnaround plan (though he did then give up his salary increase).

Tony Chanmugam is a chartered management accountant who became FD in 2008, having served in finance and operational roles within BT before that. Gavin Patterson also joined the board in 2008, having joined BT Retail in 2004. His previous career was spent in marketing roles with Procter & Gamble and Telewest.

BT's six non-execs, led by senior independent director and former government minister Patricia Hewitt, have a mix of backgrounds, but collectively look slightly lightweight.

I analyze management teams from five different angles to help work out a verdict. Here's my assessment:

Overall, BT scores 15 out of 25, a middling-to-low result. The company's executives look competent and have performed well, but the chairman has a lot on his plate, and the non-execs look a little light on business experience.

I've collated all my FTSE 100 boardroom verdicts on this summary page.

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:

• 8 Income Plays Held By Britain's Super Investor
• The One U.K. Share Warren Buffett Loves
• The Market's Top Sectors