It’s been less than a day since the sudden resignation of Telstra
chairman Bob Mansfield and Crikey subscribers have already had the
following Telstra items delivered to their inboxes at 1.20pm. See
what you’re missing out on below:
The $1.5 billion Mansfield celebration
Former Telstra chairman Bob Mansfield has egg on his face today as the
market put a $1.5 billion price on his head. That’s what today’s 12c
rise in Telstra shares to $4.68 has added to Telstra’s market
capitalisation with only the resignation of BHP CEO John Prescott in
1998 registering a bigger dollar movement in Australian corporate
Check out Crikey’s Market Movers list.
Telstra shares peaked at a high of $4.71 this morning although much of
this is probably in anticipation of CEO Ziggy Switkowski following
Mansfield out the door. Ziggy is in a similar position to NAB’s Frank
Cicutto, having only signed a new contract last year.
And what did Telstra shares do over Mansfield’s four-year stint as
chairman? Well, they halved from $9 to about $4.56. That’s some record.
Poor old Bob now has the unsurpassed record of being a “former CEO or
chairman” on no less than 6 occasions. All by the tender age of 52.
Mansfield was punted as CEO from both Fairfax and Optus after boardroom
battles and before that he was CEO of McDonald’s Australia, Sunbeam
Victa, Wormald and Lilypak although most of these he left voluntarily.
We’re not aware of anyone else who has led this many companies with the
possible exception of James Strong who is currently chairman of
Woolworths, IAG and Rip Curl and before that was CEO of Qantas,
Australian Airlines, Corrs Chambers Westgarth and DG Group.
The Mansfield relationship with the Packers – he tried to bring them
into Optus in 1993 and then wanted Telstra to buy PBL in 2000 – is now
The sin appears to be daring to help mortal Packer enemies John
Fairfax. Packer sees Telstra as the only logical buyer of Channel Nine
and he wants a chairman who will pursue this strategy. Step forward Sam
The Murdochs were also most upset to hear that Telstra wanted to merge
Sensis with Fairfax and loyal Murdoch lapdog Terry McCrann was on song
this morning calling for Ziggy, another advocate of the Fairfax move,
to be fired immediately.
The Mansfield sacking will become a political football but ask yourself
about the agendas of different media outlets as you consume their
commentary. Fairfax commentators like Stephen Bartholomeusz are still
focusing on the sins of the leaker but you won’t see any campaign for
Chisholm to go coming out of the PBL or News Ltd camps.
Crikey has already done ABC Sydney and ABC Tassie on Mansfield and the
media are lashing around for more talking heads. Lindsay Tanner has
been popping up everywhere offering no sympathy to Mansfield for being
a Howard “spear carrier” and we’ve also Paul Budde and Peter Morgan in
The Howard Government has only managed a bland joint statement from
Finance Minister Nick Minchin and outgoing Communications minister
Darryl Williams saying that Bob steered Telstra well through the dotcom
crash. Yeah right, a sensible chairnan would never have done the PCCW
deal AFTER the dotcom crash. Read the statement here.
Isn’t it amazing that we simultaneously have neither a Telstra chairman or a committed Communications Minister?
Who would want to be Telstra chairman?
Telstra chairman Bob Mansfield lost his power struggle with Sam
Chisholm and it is pretty clear that someone backed by Rupert Murdoch
and Kerry Packer is not going to be thrown off the Telstra board in an
However, in deciding to back Chisholm over Mansfield, the government
will have a tough job finding a qualified successor. Why would you take
it on if the government won’t act against conflicted directors who
allegedly leak against you?
Which professional chairman in their right mind would want all the
political rubbish that comes with chairing Telstra? Besides, you’ll
probably get fired by an incoming Labor Government in a few months
later anyway. Maybe the only candidate will be Richard Alston himself.
Afterall, Howard wanted to appoint Peter Reith to the ABC board.
Crikey can’t recall another major company which has announced an
executive search for a new non-executive chairman. This is no orderly
hand over. John Ralph clearly doesn’t want it as at the age of 72 he
has already retired from Pioneer, Pacific Dunlop and BHP-Billiton,
leaving the Commonwealth Bank chairmanship as his only other major gig.
If Ralph did step up he would become the eighth chairman in breach of
the ASX Corporate Governance guidelines which recommend against someone
chairing two top 100 companies. In Ralph’s case he would be chairing
two top 5 companies and no-one has ever done that before.
And forget about this executive search company which the board has
hired, the Howard Government has demonstrated before that it gets
directly involved in board and senior management appointments at
Telstra. They vote the government’s 51 per cent stake on every director
at every AGM so there is not even any pretence that minority
shareholders have a say.
John Howard and Richard Alston hand-picked Bob Mansfield and Ziggy
Switkowski when the Telstra board wanted to go with John Ralph as
chairman and legendary cost cutter Peter Shore as CEO.
They then tried to make it look like Mansfield was elected by the board as you see from this ASX announcement in late 1999:
Mansfield was then allowed to recast the board in September 2000 when
Steve Vizard, Cecilia Moar and Amcor chairman Chris Roberts all
resigned and Sam Chisholm, John Fletcher and Catherine Livingstone were
invited on with the blessing of Mansfield and the government.
We suspect the idea of Chisholm joining the board probably originally
came from the Packers and with Mansfield a long-time Packer ally, who
was he to object?
NAB and Telstra – a study in contrasts
By Don Boardwalk
If Bob Mansfield can do it, why can’t Graeme Kraehe have the guts to
take responsibility for the dysfunctional NAB board and walk the plank?
At least Mansfield has taken the honourable route, and you can bet a
mobile to a pay phone that he won’t be followed out the door by the
director who leaked details of the abortive attempt to buy Fairfax and
merge it with Telstra’s Sensis business.
The Sydney Morning Herald today reported that that director was
“believed to be Sam Chisholm”, the most direct linking so far of
Chisholm to the story that appeared in the Packer-owned Bulletin
magazine in February, a week or so after the Fairfax deal was defeated
in the Telstra boardroom.
Chisholm has a collection of conflicts of interest that continue to
amaze: being involved with John Singelton in his media interests, now
which are increasingly in opposition to parts of Telstra, such as
Foxtel, where he’s chairman.
Mansfield has said to the rest of the Telstra board, “I’ve shown
responsibility, how about you lot”. The silence will be deafening.
This quote from Mansfield’s statement says it all about what the
Telstra boardroom has been like, and in reality what has gone on in the
NAB boardroom. He wrote that it had become evident that “the bond of
trust necessary for the board to operate effectively has been ruptured”.
“As chairman I cannot be accountable for the actions of individual
directors but I do accept that the board cannot operate as it does now
and that the chairman in those circumstances bears responsibility.”
Graeme Kraehe, are you listening? The “R” word – and we are not talking
rubbish or (board) renewal as you did in that ridiculous statement
issued on April 6.
Alan Kohler, in the SMH and Age, revealed this morning that the seven
non-executive directors at the NAB are negotiating with Cathy Walter,
through leading law firm Mallesons, to try and settle the row and avoid
an extraordinary general meeting.
From what Kohler wrote it seems the seven want to know from Walter just
what will make her fold up her tent, withdraw her resolutions and walk
away. Will it be a large dollop of money, in the usual boardroom
solution to problems or will the heads of Kraehe, Ken Moss and Peter
Duncan be the price Ms Walter will settle for?
Good idea, why spend the millions on an EGM? But there’s a case to be
made that the NAB needs a meeting of shareholders now so that Walter,
Kraehe, Ken Moss and the others can put their cases to the real owners
of the bank and have an open, full blooded discussion about
responsibility for ruining the reputation of the country’s biggest bank.
From Homeside, to the King Bros bus debacle, to the MLC investors
diddle, to the forex options fumble, not to mention the inspired
trading in AMP shares by an employee that netted $10 million in
profits, without any hint of inside information, it’s been a litany of
disasters srubbed over by a compliant board and management, up till
February when Charles Allen and Frank Cicutto departed.
An explanation is owed to shareholders that some clubbish,
Melbourne-style backroom deals won’t provide. Kraehe has accepted his
time is up, but not for a few more years, as he outlined in that
laughable statement put out before Easter entitled “Chairman outlines
board renewal program”.
In his column this morning Kohler also had this amazing statement
“unfortunately, leaking from the NAB boardroom has dried up”! Yes,
truly unfortunate. Read the full column here: Time for chairman to take the walk
But it is amazing that a set of leaks from two of the country’s premier
boardrooms have had so vastly different outcomes. Does that say
something about the character of the individuals involved?