Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



The Men Who Run Old Mutual

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 (UKX). I hope to separate the management teams that are worth following from those that are not. Today, I am looking at Old Mutual (LSE: OML.L  ) , the Anglo-South African financial group.

Here are the key directors:



Patrick O'Sullivan (non-exec) Chairman
Julian Roberts Chief Executive
Philip Broadley Finance Director

Patrick O'Sullivan joined the board as chairman in 2010. A chartered accountant, he was formerly finance director and a divisional CEO at Zurich Insurance and has worked at Bank of America, Goldman Sachs, GE Capital, Barclays, and Eagle Star Insurance.

Julian Roberts joined Old Mutual as finance director in 2000, becoming CEO of Skandia following its purchase by Old Mutual in 2006, and becoming group CEO in 2008. He had previously been finance director at insurers Sun Life and Aon U.K. and has spent most of his career in the insurance sector after a brief stint at PricewaterhouseCoopers.

He has done much to restructure Old Mutual since it was badly hit by the financial crisis of 2007-08. Though knocked back by HSBC's walking away from a deal to purchase its stake in South African bank Nedbank, he has implemented a series of disposals including the group's Nordic business for $2 billion, cut costs, and paid down debt. He has also expanded the group's emerging African insurance businesses.

Philip Broadley became finance director in November 2008, having previously been finance director of Prudential. A former partner in Arthur Andersen, he has held a number of prestigious accountancy posts, including chairmanship of the 100 Group of FTSE 100 finance directors and membership of the IASB's insurance working group.

Both Julian Roberts and Philip Broadley took home sizeable pay packets last year, reflecting Old Mutual's stock market performance. It would be more encouraging had they retained their awards under long-term incentive schemes in shares. Instead, Julian Roberts sold more than 5 million pounds' worth of shares earlier this year, while Philip Broadley sold 1 million pounds' worth last year. However, they still have respectable holdings.

The company's nine non-executives include a smattering of accountants, bankers, actuaries, and insurers, including a number of South African-based individuals.

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.
Strong and varied industry experience.
2. Performance. Success at the company.
3. Board Composition. Skills, experience, balance.
Well balanced.
4. Remuneration. Fairness of pay; link to performance.
High-ish, but performance-related.
5. Directors' Holdings, compared with their pay.

Overall, Old Mutual scores 17 out of 25, a result just slightly above average. The company's executives are doing a decent turnaround job, but share sales suggest they are not betting their fortunes on further upside.

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 Mr. Buffett's purchase and investing logic in full.

And Mr. 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:

Tony Reading owns shares in HSBC, but no other shares mentioned in this article. The Motley Fool owns shares of Bank of America. Motley Fool newsletter services have recommended buying shares of Goldman Sachs. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2080797, ~/Articles/ArticleHandler.aspx, 10/27/2016 6:47:05 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes