Any doubts about who runs Telstra have been removed by a couple of stories in today’s papers. The first was this short piece by Michael Sainsbury, buried in The Australian’s business section, which details how Telstra’s chairman Donald McGauchie has parachuted a leading Liberal Party operator John Short into the key government relations role at the telco.
“Telstra chairman Donald McGauchie has intervened to make a controversial executive appointment that triggered the recent resignation of Bill Scales, Telstra chief executive Ziggy Switkowski’s chief of staff. John Short, a former key government relations manager at Telstra, this week returned on a long-term contract to work on the planned full privatisation of the company. The reappointment came about six months after leaving the company following differences with Mr Scales.”
That underplays the importance of the decision. Short is a former political and economics writer with The AFR, The Australian and The SMH. He’s a former Liberal Party worker, and has been close to the prime minister, the finance minister Senator Minchin, and the former communications minister Richard Alston. He also worked on government affairs at Westpac with David Gazard, who is another staffer journeyman now advising treasurer Peter Costello.
So we now have a former Liberal Party staffer installed by the Liberal Party-appointed chairman running the government relations side of Telstra and the T3 float.
The government was previously criticised for intervening at Telstra by hand picking former chairman Bob Mansfield and CEO Ziggy Switkowski, two appointments which did not exactly work out well and caused tension with the supposedly independent Telstra board. This latest move is another direct sign that the Federal Government is once again directing the affairs of Telstra, and will choose the new CEO.
That’s why the second story in the media was a bit tragic. It was a fairly bland attempt by David Moffatt, Telstra’s former chief financial officer and present head of consumer and marketing, to position himself via a profile in The AFR. That story, by veteran reporter Jennifer Hewitt, damned Moffat with faint praise, describing some of his comments as “deliberately bland”.
After joining Telstra four years ago, Hewitt declares that Moffatt is “not about to be made the new chief executive of the company”. That particular line came just above the turn from page one, and anyone who read on came across quotes from an investment banker saying “there doesn’t seem to be a lot of substance to him”. Ouch.
On page 60 you find a picture of Moffatt wearing bike riding gear and looking a bit like Chip Goodyear of BHP-Billiton. The caption said it all: “Speeding along… but David Moffatt, on his bike, acknowledges Telstra should have moved faster on pricing”. Or the caption on the second picture: “David Moffatt… won’t be drawn on either his ambitions or his critics.” So why the story? What’s the point of exposing yourself to Hewitt in a profile that was only designed for one thing: to parade your leadership credentials?
Telstra is clearly terribly unstable at the moment and the sooner a new CEO settles things down the better.