Winds of change

Telstra chair John Mullen and its newest director, entrepreneur Bridget Loudon, urge boards to reframe the skills and composition they need to better respond to rapid change and digitisation.

In his push for demographic change in Telstra’s boardroom, chair John Mullen sees parallels a decade ago when he was CEO of rail and ports operator Asciano and had to break the mould of a traditional culture, recruiting more broadly for talent and skills to equip Asciano for the era of logistics automation.

“I only see upside in trying to break the mould a bit,” says Mullen. “Australia is a fairly small business community, there’s a bit of recycling of the same names and faces. The pool of female talent is even smaller and there’s the tradition of executives moving into a board role. It perpetuates the problem.”

Mullen also believes things can get bogged down applying the classic board skills matrix. He says the company needs directors with telco and global experience who can go “toe-to-toe” with management on operational aspects. “Then you have roles where there is a particular need for the audit committee — and you need a chair.”

He says a board needs deep corporate memory and someone who is part of the current technological and social disruption.

“I wanted the youth social conscience around our licence to operate.” Mullen says Telstra’s size and legacy are significant assets that have contributed to its success, but are now a barrier to responding to rapidly changing market dynamics. “Every legacy telco in the world is wrestling with the same thing. Your competitors are young, smart and selectively focusing on limited areas of the business where they can perform better than you. They don’t have to compete across the board.”

New blood

Telstra’s recruitment of Bridget Loudon came after a two-year search. “It was a personal crusade — I felt the company needed the change,” says Mullen. “The majority of people were very supportive. Bridget brought a huge amount of experience of a startup world none of the directors around the table have been in themselves.”

Loudon is perplexed why some saw it as a risky appointment. “All else being equal, it feels prudent to have someone on the board who has run a company that started when the internet was around,” she says. “Every company is moving from an industrial to an internet company. They are competing globally and locally with digital-first companies. I’m new to this game, but it strikes me that good fiduciary duty would be to have someone on the board who thinks about things with a digital- first mindset.”

Loudon says risk profiles have changed dramatically. “New risks to incumbents include teenagers in hoodies coding up a storm, not just savvy corporate executives. It’s one step to get people who “think outside the box”, but to truly cover your bases, you need people who simply don’t see the box.”

Loudon says she also brings a long-term view, “I am naturally thinking on a 10–15 year scale”.

She notes board and management have created room for her voice. “At no point did I feel I wouldn’t be valued,” she says. “John has conviction and that carries through.”

“Most people are thinking along the same lines,” adds Mullen. “We have to innovate. If we’re not failing at some stuff in the short term, we’re failing in the long term because we’re not innovating enough. The board role should be: where are we trying new stuff? If it’s not working out, what are we learning?”