Michael Sainsbury | September 15, 2008
An interesting challenge is looming at the top of Telstra.
Telstra chairman Donald McGauchie (L) has two more years left under the corporation's constitution
Telstra spokesman Andrew Butcher was firm about McGauchie's intentions. "Donald McGauchie will stand for re-election as a non-executive director at the Telstra AGM in October. He will remain as chairman into the foreseeable future," Butcher said.
McGauchie's soul mate, Sol Trujillo's tenure is also likely to come to an end within that timeframe.
Sol, who can skip away with only 30 days' notice, has been careful to dance around any actual answer -- a bit like he does at question time for the group's financial results.
But Trujillo's so-called "transformation" -- in reality just business as usual with more money and noise -- was set for five years and we are three years in. So that means for two more years he chooses to spend his time mostly in other places than Australia.
Butcher promised that no search firm such as Egon Zehnder, for instance, has been appointed but certain promising CEO types in the US are being sounded out by someone. Still, it's a long process and it has to start sometime.
Yet good corporate governance says that it's best to bring in a new chairman to appoint a new chief executive, so they can get on with job together.
It's worth noting that when McGauchie stepped in as Telstra chair after 18 months of vicious board infighting that saw Bob Mansfield out of the hot seat, he couldn't get rid of chief executive Ziggy Switkowski quickly enough.
He should let the new chairman do the same, yet Telstra doesn't have a deputy chair or any obvious successor.
McGauchie is a farmer from country Victoria. Shareholders should put him out to pasture so the next chairman can get on with the job of replacing McGauchie's American friend.
sainsburym@theaustralian.com.au
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3 Comment(s)
I fully understand why Telstra opponents would see it in their interest to castigate Sol and Don but am somewhat puzzles at the motive for Michael Sainsbury's tirade. If Michael has an interest, financial or personal, he should declare it.
Transformation was an American view to get things moving, that is, their bonus and wage packages. Middle management either rolled over to the bully boys for the US or got shot. The brains and knowledge of telco management exists in Australia and needs to be based in the real world not a view from across the Pacific.
When will Australian boards understand that we do have great capability to develop and manage business in Australia, what failed in the US last year doesn't need to be imported so we can follow the same old path and add the disadvantage of significant cultural differences. It would be a good idea to get rid of the famer and his American puppet master.
The problem is that the Telstra hierarchy apparently don't know what they don't know, namely the acceptable way to do business in Australia. As we have seen with the departure of the good ol' boy Phil Burgess, it seems that when one import moves back to the USA, they are replaced with a similar clone. The mostly Australian board should know better, so why do we have this continuing situation?
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