BOSTON – According to a study by James Drury Partners, the board members of BlackRock, Merck & Co. and Caterpillar led the rankings in the best management staff among U.S. corporations.
At the other end of the list, the companies that were perceived to be spearheaded by less capable board members include several family businesses or firms controlled by their founders such as Tyson Foods, Dole Food, and DR Horton.
The study of James Drury Partners involved calling the boards of the 500 largest companies in the United States according to annual revenues as well the number and experience of its directors.
The report claimed that directors who are also CEOs of other companies may be the best candidates for high ranking positions. They also argued that experience and independence make them more capable of challenging the direction of a company and were less likely to be intimidated by a colleague.
The report found that the business decisions of the best-governed companies, measured by the number and experience of directors to their boards, exceeded that of their less able peers.
In a group of 25 companies whose boards were stronger than expected due to their number, it has been noted that shares rose 29% over the past five years. These group includes MasterCard and Rockwell Automation.
The figures of that specific control group exceeded the 16% increase in a group of 25 companies whose boards were fewer in number. This group includes Walmart Stores and Microsoft.
Microsoft, which joined forces with the current chief executive of Seagate Technology PLC and former chief executive of Symantec Corp, declined to comment. Walmart on the other hand, choose to ignore the request for comment.
Overall, the 2012 edition of the study found that standards for board members have become more lenient compared to previous years. This trend has been related to Drury where fewer top-level executives from outside on the boards.