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 firms are those run by executives collecting fat rewards as the underlying business goes to pot.
In recent weeks, I've been assessing the boardrooms of companies within the FTSE 100 (UKX). Today I'm naming and shaming the bottom five companies from the first 15 that I have looked at so far.
I look at management teams from five different angles, giving each a mark out of five. The scores are added to produce an overall score out of a maximum 25.
Is it a surprise that financial firms dominate the bottom of the league? Two of the three currently lack a permanent CEO, and all have troubles.
Royal Bank of Scotland
Apart from Hester, the 11 other directors have an average investment in the bank of just 53,000 pounds. Finance Director Bruce van Saun, who didn't give up his bonus, has just 102,000 shares, and Chairman Sir Philip Hampton has 61,000. That's not a vote of confidence in the bank's prospects. Tensions with the government don't help.
However, the board is still stuffed with former investment bankers, and the ramifications of the LIBOR scandal remain to be played out.
With no CEO, Aviva
It's surprising to see Shell
I've collated all my FTSE 100 boardroom verdicts on this summary page, and will update the rankings after I've analyzed another 15 companies.
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 UK Share Warren Buffett Loves" -- explains Buffett's purchase and investing logic in full.
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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