The bulk of the bonus part of Sol Trujillo’s $8.7 million pay packet came from presenting the board with an acceptable plan for Telstra’s revival. It is of course too early to know if the plan is going to work, but the initial capital K in his contract KPIs was just coming up with a plan the board would buy.

And therein lies the big problem with the T3 float and why the timing is wrong – it’s too early for investors to have any idea of whether the plan is working. The official government line is that the timing of the float has been determined by the electoral cycle, but it would be more credible that it’s been dictated by a lack of faith in Trujillo and McGauchie.

If Nick Minchin believed Trujillo could deliver as promised, he would be irresponsible to flog off the rest of Telstra before that can be proven or at least strongly indicated. By waiting a year, the government could receive a lot more for its controlling stake. On the other hand, if you don’t believe Trujillo and the Telstra board, you’d want to be rid of the thing as soon as possible so as to put as much daylight as possible between the ongoing disaster and responsibility for it.

In this climate of uncertainty then, imposing Geoffrey Cousins on the unwilling board ads a degree of nervousness and paranoia to the existing uncertainty.

Cousins’s reputation as a boardroom brawler, warranted or not, also clashes with the current demeanour of the Telstra board. With the exception of McGauchie, the rest are a rather civilised bunch. Telstra even features the highest concentration of female directors of any major Australian corporate. (Sure, there are only two – Catherine Livingstone and Belinda Hutchinson – but that’s still a third of the board excluding the chairman and CEO or 25% of the total.)

One is left wondering about the culture. Just for a theoretical example, one can’t quite imagine any of the other the six non-executive directors buying a harbourside house and growing a hedge to a height that totally blocked out a neighbour’s view, refusing a request to trim the thing to a level that still provided privacy without interfering with the view.

Peter Fray

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