commentary The remaking of the post-Trujillo era of Telstra continues apace, with Catherine Livingstone starting to put her own stamp on what was a fractious and fractured boardroom.
(Credit: Microsoft)
Her first infusions of new blood into the boardroom reflect Telstra's strategic imperatives and needs, with one inspired appointment and another that at first glance appears safe, lateral and in keeping with Telstra's immediate priorities.
The opportunity for Livingstone to re-make the Telstra board came as a result, not only of the boardroom putsch that saw former chairman Donald McGauchie and his chief executive Sol Trujillo forced out but also because of the unplanned retirement of Peter Wilcox, who was caught up in the James Hardie judgement, and the unexpected retirement of another long-serving director, Charles Macek.
The appointment of Steve Vamos, whose CV includes Microsoft, Apple, IBM and ninemsn, is a coup. Vamos only returned to Australia late last year after being Microsoft's online business head of worldwide sales and international operations.
Vamos, who was getting rave reviews from outside Telstra today, will bring a deep understanding of the online environment and consumer technologies to the boardroom table.
Russell Higgins, formerly a senior public servant in the Department of Prime Minister and Cabinet and a secretary of the Department of Industry, has non-executive experience at APA Group and Sunrice.
However, it is his Canberra experience and contacts and his understanding of the electricity and gas sectors — both heavily regulated sectors — that will be valuable to Telstra as it confronts the challenges posed by the proposed National Broadband Network and the concurrent and threatening review of the regulation of its sector.
Thus, Livingstone's appointments don't just fill vacancies in the boardroom but address the group's particular needs at this particular moment.
The departure of Macek, a director since 2001, appears to have been related to the boardroom ructions, although it does seem that it was quite voluntary. Macek, with others, may have had his own ambitions thwarted by Livingstone's elevation but also he was in for a potentially torrid experience had he remained on the board.
Macek, with McGauchie and another long-serving director, John Stocker, was targeted in the Future Fund's campaign for a renewal of the Telstra board and management which played such a significant role in the regime change.
While the fund has since sold down its shareholding, it remains the biggest and most influential shareholder and Macek, who faced re-election at this year's annual meeting, may have been concerned that the fund might continue to campaign against him.
As chairman of the remuneration committee, he would also be aware that he would be the focus of any discontent with the size of the payouts to Trujillo and other exiting executives. In 2007, Telstra shareholders voted 66:34 against adoption of the remuneration report he presented to the meeting.
While the vote was non-binding, institutions and their proxy advisers have been warning that they might reflect their ire over companies' remuneration arrangements in votes against directors up for re-election if companies don't adequately respond to shareholder concerns.
Livingstone's overhaul of the Telstra board will buttress the group's re-positioning of itself as a less combative organisation. Livingstone and new CEO David Thodey are presenting a lower-key, more considered and more conciliatory face to government and the wider community.
However, Thodey and the new board still face what are, in corporate terms, life and death challenges and therefore both Telstra's new image and the new chemistry Livingstone has injected into the Telstra boardroom have yet to be truly tested.
This article by Business Spectator's Stephen Bartholomeusz is reproduced on ZDNet.com.au courtesy of a reciprocal publishing agreement.
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Mcgauchie was a total idiot and it is no loss that he is gone. He was probably one of the most unpleasant people in Australian business. Vamos is an inspired choice, but how he will fit in with Telstra's dreadful culture, God only knows. I suppose he is only a board member so won't have to be exposed to all the political rubbish that is part and parcel of Telstra's everyday existence.