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 ENRC (LSE: ENRC), the Kazakhstan-based mining group being investigated by the Serious Fraud Office.

Here are the key directors:



Gerhard Ammann


Felix Vulis

Chief Executive

Zaure Zaurbekova

Finance Director

Let's start on a positive. Ms Zaurbekova is one of just six female finance directors and three female CEOs in the FTSE 100, so ENRC stands out as a paradigm of Lord Davies' proposals to improve corporate governance with more female executives.

More Soviet than City
That's one of the few assets on ENRC's corporate governance balance sheet, which has many liabilities. Problems were highlighted at the firm, which is controlled by three oligarchs, FTSE 250 miner Kazakmys and the government of Kazakhstan, when two City veterans, Sir Richard Sykes and Ken Olisa, were forced out in June 2011. Mr Olisa described the company as "more Soviet than City".

Gerhard Ammann became executive chairman last month after investment banker Mehmet Dalman, brought in to clean the company up, threw in the towel. Mr Ammann is former chairman and CEO of Deloitte Switzerland and is president of a Swiss private bank. That gives him credentials in auditing and discretion, but five years on ENRC's board hardly makes for a fresh pair of eyes.

Former USSR
A Russian-born American businessman who was educated in the former USSR, Felix Vulis joined ENRC in 2001 and became CEO in August 2009, two years after ENRC's flotation. He resigned in February 2011, saying he wished to spend more time in Kazakhstan, but remained as interim CEO during the period that Messrs Sykes and Olisa were ousted, and was reappointed in September 2011.

During his tenure, ENRC's shares have lost 65% of their value.

Ministry of Industry
Zaure Zaurbekova was chief financial officer of ENRC's Kazakh operation from 2001 until 2007 when she became deputy CFO of ENRC itself, stepping up to be CFO in 2009. Her earlier career was spent in the Kazakh Ministry of Industry and Kazchrome, a chromium smelter. Some of the "whistleblower" allegations at ENRC have involved companies allegedly linked to members of her family.

A third executive, Jim Cochrane, resigned in April after ten years, one of a slew of recent management departures.

ENRC's seven non execs include one representative of the Kazakh government. Two announced they would not seek reelection at next month's AGM. Just one of the others, BATSchairman Richard Burrows, is on the board of any other FTSE company.

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

1. Reputation. Management CVs and track record.


Score 1/5

2. Performance. Success at the company.


Score 2/5

3. Board Composition. Skills, experience, balance

Sinking ship.

Score 1/5

4. Remuneration. Fairness of pay, link to performance.

CEO received 140% performance bonus for 2012!

Score 2/5

5. Directors' Holdings, compared to their pay.

CEO & CFO have substantial holdings.

Score 3/5

Overall, ENRC scores 9 out of 25, a very poor result. It does little for the reputation of the London Stock Exchange.

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

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