The Men Who Run Aviva

LONDON -- Management can make all the difference to a company's success and thus its share price.

To me at least, 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. On the other hand, 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 (INDEX: ^FTSE). I hope to separate the management teams that are worth following from those that are not. Today I am looking at Aviva (LSE: AV.L), the only composite insurer in the FTSE100.

Shareholder Spring
Aviva's board hasn't been covered in glory recently. Former CEO Andrew Moss was ousted in the U.K.'s "Shareholder Spring," which saw a spate of overpaid and underperforming executives embarrassed into resigning by shareholder revolts. A new CEO is not expected to be appointed until next year.

But his exit coincided with the appointment of a new chairman, who promptly assumed executive responsibilities. And last week he set a new direction for the company, with a new strategy, changed management, cost-cutting, and disposals. So far from being rudderless while there is no CEO, Aviva's fate could be sealed in the interregnum. So it's timely to look at who's in charge now.

Here are the executive directors:

John McFarlane was named as the future non-executive chairman in 2011 when Aviva was hit by a rash of management departures.

A Scots-born former banker, he is credited with turning around the fortunes of Australia and New Zealand Bank while CEO for 10 years between 1997 and 2007, during which time its share price tripled. He slashed costs and refocused the bank's strategy, lowering its risk profile by moving out of emerging markets, while at the same time restoring its public reputation.

He is also a former executive director of the respected Standard Chartered, and earlier in his career spent 18 years with Citibank.

Disarray
The disarray caused by Andrew Moss' departure led to Mr. McFarlane taking on an executive role in May. That's a big change for a man who retired from executive responsibilities five years ago, but in the two months he has been in the post he has moved quickly to make his mark.

Mr. McFarlane's track record with ANZ augurs well for Aviva's latest attempt to reinvent itself. Significantly, he has appointed 46-year-old rising star David McMillan to the post of director of transformation, reporting directly to him with the brief to implement the new strategy. That's perhaps a way for the 65-year-old chairman to harness a younger man's energy.

Pat Regan joined the board as CFO in February 2010. He was previously CFO of Willis, the insurance broker, and group financial controller at insurers RSA and AXA. He is seen as the leading internal candidate to replace Andrew Moss, and looks like a safe pair of hands in the arcane world of insurance accounting.

Trevor Matthews, the former CEO of life insurer Friends Life, joined the board in December 2011. His 2.5 million pound signing on package was a factor in Aviva's shareholders rejecting its remuneration report for last year.

There are eight non-executive directors. Perhaps most of note is that the chairman of the remuneration committee was appointed in 2009 and remains in situ.

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

Overall, Aviva scores 11 out of 25 for me, putting the firm's management team low down in the FTSE 100. But it's a patchy result, which reflects the short tenure of the management team. In time they may rise up in the rankings. Aviva is a high-risk turnaround story, and on paper Mr. McFarlane is the right man for the job.

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