Well, Donald McGauchie pretty much only had one idea as Telstra chairman, and that was to antagonise the company’s regulator, and the Government behind the regulator, as much as possible.
It was a huge success. The CEO McGauchie and his board selected, and the mates the CEO brought with him, certainly upset the Federal Government. So much so that relations seemed to break down entirely, especially after the Howard Government gave a massive regional broadband contract to one of Telstra’s competitors.
McGauchie was a prominent figure in conservative politics as former National Farmer’s Federation head. At least it could be said that there was never any doubt about the independence of McGauchie from the Government that, as the company’s biggest shareholder, ticked off on his appointment.
And for a time the market, and commentators, thought McGauchie and Trujillo might be onto something with their strategy of all-out aggression. But it was never going to work. Telstra might be an 800lb gorilla, but the Federal Government always held the trump cards of money and regulation. That was what brought Telstra so quickly to heel following the NBN announcement, and the reason why McGauchie is bailing out.
In truth, McGauchie was probably doomed from the moment Telstra opted to not submit a compliant NBN bid and thereby wrecked the Government’s process. And he was certainly doomed the moment David Murray made his views clear on the need for a Telstra chair with a decent relationship with Canberra.
Telstra shares were $5.03 when McGauchie was appointed. Today they’re $3.22. That’s the legacy of McGauchie and Trujillo and their profoundly flawed strategy.