Telstra shares are up 3c to $3.57 this morning, but you can rest assured there will be a huge and damaging debate after the board recommended shareholders vote against appointing John Howard’s great mate Geoffrey Cousins on as a director.
The notice of meeting for the 14 November AGM in Melbourne was released to the ASX at 8.30am this morning but The AFR was all over the story in a way that will hurt the government.
Telstra chairman Donald McGauchie tells shareholders the following on the front page of the notice of meeting:
The board does not recommend voting in favour of the election of one of the external candidates, Mr Geoffrey Cousins, because the Board has not had the opportunity to assess Mr Cousins’ candidacy through the Board’s established processes, which include assessing a proposed director having regard to the independence requirements of the Board’s Charter and the ASX principles of Good Corporate Governance.
The so-called “T3 peace deal” is clearly no more because Telstra has leaked chapter and verse of what happened to The AFR and the government finds itself severely on the back foot.
At one level, the government is perfectly within its rights to insist on board representation, but the PM has made a very poor choice in selecting yet another close political mate and Optus refugee with a chequered record.
If John Howard wants to get T3 away he would withdraw the Cousins nomination or at the very least pledge not to vote on the resolution and let the independent shareholders decide. At the other extreme, he could further damage relations with the directors’ club by voting out the four incumbents up for re-election.
As Australia’s most unsuccessful board candidate, I can tell you this situation is unprecedented.
Cousins finds himself grouped in a category with Australia’s four biggest corporate election losers – Telco unionist Len Cooper, disgruntled Telstra employee Merv Voigt, former Olympic coach Ange Kenos and yours truly.
Between us, we’ll have clocked up almost 20 failed Telstra board tilts by the time the Government has voted its controlling stake against us on November 14.
The upside from all this is that the nation will finally have a decent debate about corporate voting. I’ve long been calling for an independent government authority to take over contested corporate elections and now the Federal Government finds itself shafted by Telstra in the notice of meeting. How it responds will be fascinating to watch.