Monday, September 25, 2006

Government Appointment to Telstra Board

The Federal Government has nominated Mr Geoff Cousins to be voted a Telstra Board Member. There is the stench of politics about this:
  1. For 10 years, Mr Howard has maintained that Telstra operates independently of government interference.
  2. Since the appointment of Sol Trujillo, Telstra has been aggressively fighting the ACCC to get its own way, something Mr Trujillo worked hard on when working for a US Telco, and has previously annoyed The Federal Government.
  3. The Federal Government announced several weeks ago, that it was selling the remaining 50.1% of Telstra, which it owns (T3). Some of this will go into the "Futures Fund" to offset unfunded (budgetary) liability for Federal Puublic Servants' superannuation.
  4. The nominee, Mr Geoff Cousins, is a former adviser to the Prime Minister, Mr Howard, and former CEO of Optus Vision, a competitor of Telstra's.
  5. Since the Federal Government still owns 50.1%, it will get its way.

Questions for voters to ask:
  1. WHY has the government waited till after the announcement of the T3 to appoint its board member, especially given its "hands off" history?
  2. WHAT (political) capital does it expect to make? Does it expect to gain access to Board discussions which no other shareholder has? (see also, Q3, below)
  3. Given Mr Cousins' close ties to Mr Howard, is there not potential for Mr Cousins to have a confilct of interest?
  4. WHAT is Mr Cousins' brief from the Federal Government? It would not nominate a person so close to the Prime Minister without having an agenda.
  5. WHY has the government not given Telstra more notice, so it can more thoroughly investigate Mr Cousins' credentials?
Telstra, for its part, won't support the nomination because it doesn't like Mr Cousins' relationship with Mr Howard and claims it won't have time to apply "due diligence" to its investigation of him. This is plainly because Mr Cousins is the Federal Government's choice, and will be imposed on the Telstra Board because the Government owns 50.1% of the company.

This appointment has all the markings of a political stoush between the Federal Government and the current Board of Telstra, and Mr Trujillo, in particular.

The Analyst