We’re getting down to the business end of proceedings with Telstra as the board settles on a new CEO and the momentous decision to spin off Sensis in a value-creating $10 billion demerger. Robert Gottliebsen had an interesting column in The Weekend Australian in which he seemed to advocate retaining Ziggy Zwitkowski as CEO, while the Fairfax broadsheets had a strong story on Monday suggesting the Sensis demerger is close to being approved.

It has already taken more than 100 days to replace Ziggy, and the result has been an even more dysfunctional company as the various divisional managers fight among themselves as part of the beauty parade before the board and the head hunters.

The biggest turf war is said to be between consumer and marketing boss David Moffatt, whose pitch to the board was that he’d already revolutionised Telstra, and the man who replaced him as chief financial officer, John Stanhope, who takes the opposite view and claims as CEO he would deliver a much-needed revolution from within because he’s experienced the stop-start reform process in the past. Alas, neither man will get the job this time although Stanhope is said to have finished third in a process that will now almost certainly see an outsider take charge.

Telstra technology boss and long-time Ziggy lieutenant Ted Pretty was never in the race, although he did use an interview with The Australian’s Michael Sainbury last December to emphasise that all those various dotcom blunders were collective decisions which on a portfolio basis actually generated a $110 million profit. The key quote was as follows:

“Well, if I consider that I am entitled to claim joint responsibility for the many good things we have done then I must also take accountability for any poor outcomes, with the benefit of hindsight, we have endured in some areas. Some say, `but didn’t the other executives agree and the board approve these moves?’. The answer is yes, but responsibility and accountability must be always be accepted by the key managers involved.”

Ziggy supporters have been marginalised in recent months, with former Reach CEO Dick Simpson retiring and Bruce Akhurst stripped back of much of his responsibilities to only have Sensis going forward, although this might end up being the perfect escape from the political maelstrom that lies ahead for Telstra.

It was a four-horse race when the last CEO search took place at Telstra in 1997-98 and the unsuccessful candidates – Paul Rizzo, Peter Shore and Gerry Moriarty – all left the company in relatively quick succession after Ziggy took charge.

Telstra’s business and government chief David Thodey is the next most likely internal candidate after John Stanhope and David Moffatt, and the big question is whether these three executives stick around for T3 if a foreigner is brought in. Chances are we’ll see significant management instability that will not help the T3 sale price, unless the new CEO is regarded as a real go-getter.

I still hope they hire Dr Peter Troughton, the human hurricane who knocked the Victorian power industry into shape for the Kennett Government. But the former Telecom New Zealand CEO doesn’t need the money, and he’s subtle as a sledgehammer – so he would be awful for the politics.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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