The boards of BlackRock , Merck & Co and Caterpillar topped a ranking of the most capable boards of directors in corporate America, while a publicly traded affiliate of activist investor Carl Icahn came in last.

Companies rated as the least capable boards included several traditionally family- or founder-controlled companies, including Tyson Foods, Dole Food and D.R. Horton.

A study by James Drury Partners, which conducts director searches, ranked boards of the 500 largest U.S. companies by revenue, based on the number and experience of their directors.

It gave the most weighting to outside directors who are CEOs at other companies, arguing they were most likely to have the experience and independence to challenge management, and less likely to be cowed by a fellow CEO.

The report found the shares of better-governed companies, as measured by the number and experience of the directors on their boards, outperformed the stocks of their less capable peers.

In a group of 25 companies whose boards were stronger than the consultancy expected given the company's size -- including MasterCard and Rockwell Automation -- their shares rose 29% over the past five year.

That outpaced the 16% rise in a group of 25 companies whose boards were weaker than the consultancy expected given their size, including Wal-Mart Stores and Microsoft.

Microsoft, which in the past six months has added the current CEO of Seagate Technology and the former CEO of Symantec to its board, declined to comment. Wal-Mart did not respond to a request for comment.

Overall, the 2012 edition of the study found boards had become slightly weaker based on their standards over the past year -- a trend Drury related to fewer top-level outside executives on the board.

'Drastic' change needed

Icahn, known for challenging managements and shaking up boards of underperforming companies, said the survey was flawed in including Icahn Enterprises-- where he serves as chairman and owns the vast majority of shares.

"We're a general partnership. A GP structure is vastly different from a corporation because you don't even have votes. Even if that wasn't the case, I own 96% of the company," Icahn said in a phone interview. "The owners should select board members and be represented on the board and hold management accountable."

But the billionaire investor said he agreed that many corporate boards fail to police management or represent shareholders.

"I do believe that the whole structure of corporate governance in this country needs drastic changing, but not in the way this survey implies," Icahn said. "You don't need larger boards. You need better boards."

Last month alone, Icahn successfully placed a director on the board of troubled natural gas producer Chesapeake Energy and online health information provider WebMD Health and nominated four new directors for the board of drugmaker Forest Laboratories.

James Drury, chairman of the Chicago-based search firm, admitted he saw the irony in placing Icahn Enterprises, which has four directors in addition to Icahn, at the bottom of his list. But he said all publicly listed companies should be held to the same standard.

"If you are a public company, you have to play by the same rules," Drury said.

Some of the other companies the study said had less-capable boards took issue with its methodology, particularly the heavy weight placed on CEOs of other companies.

"Since I became chairman in 1998, the percentage of independent directors has consistently increased," said John Tyson, chairman of Tyson Foods. "We are confident in each director's business acumen and ability."

D.R. Horton said four of its six directors are independent and that it split the chairman and CEO roles in 1998.

"We believe our board does not lack governance capacity," the homebuilder said in an email to Reuters.

CEOs scale back outside boards

Many CEOs have scaled back the number of outside boards on which they serve to focus on their own companies. Just 47% of the CEOs of the 500 largest U.S. companies serve on outside boards currently, down from 70% in 1990.

While the study acknowledged the desire for CEOs not to be spread too thin, it also suggested that serving on an outside company board could broaden their experience.

Among the top-rated companies, BlackRock's board includes James Rohr, CEO of PNC Financial Services Group and Merck's includes Wendell Weeks, CEO of Corning.

The need to have other strong CEO voices on a board is not lost on top companies. AOL shareholders in mid-June voted down a slate of three dissident nominees, but the company still aims to add two more voices to its eight-member board.

"We would really like to have a sitting CEO," AOL CEO Tim Armstrong said at the time. AOL's board includes the CEOs of several nonprofits and retired executives from Amazon.com and Automatic Data Processing.

The boards ranked second and third from bottom in terms of corporate governance capability were at Seaboard, which has pork production and processing and shipping units, and TravelCenters of America, which operates highway rest stops.

TravelCenters declined to comment. Representatives of Seaboard, Host and Dole did not respond to requests for comment.