McLeod rejigs positions in favour of Telecom

By PETER GRIFFIN

Business Roundtable chairman Rob McLeod is undertaking a "portfolio reshape" as he resigns as chairman of accounting firm Ernst & Young to avoid a conflict of interest in joining the board of Telecom.

McLeod rounds out Telecom's board revamp, which followed the controversial appointment and then resignation of former BNZ chief executive Lindsay Pyne.

As an independent director, McLeod will receive a base fee of $131,250.

Telecom last month picked up Freightways and Ngai Tahu chairman Wayne Boyd as a board member.

Boyd stepped down as a director of Vector, which is ramping up its telecommunications interests, to avoid a conflict of interest.

Vector is understood to be in talks with Telecom rival TelstraClear.

McLeod has also found that coming on board the country's biggest public company raised potential for conflict.

"Telecom's policy wouldn't have permitted me remaining a partner in Ernst and Young because it has an independent audit relationship with Telstra," he said.

In addition, auditing firms generally did not permit their partners to serve on the boards of potential major audit clients.

McLeod's resignation from Ernst and Young will take effect from the end of September. He will stay on as chairman of the Business Roundtable and as a director of Tainui Group Holdings.

While he is a trained lawyer, McLeod is a highly regarded accountant and tax expert.

"My background has been in business advisory and taxation. I'm a qualified lawyer but it's an academic qualification," he said.

McLeod had "a lot of reading" up to do on Telecom before he took up the position.

"I'm under no illusions about the challenge these sorts of companies are confronting in terms of regulation, competition and technology."

McLeod said he had had little to do with the vigorous lobbying undertaken by the Business Roundtable last year as it opposed the opening up of Telecom's copper network to competitors.

The unbundling stance was driven by Roundtable researchers and executive director Roger Kerr, said McLeod, who was personally approached by Telecom chairman Rod Deane to join the board.

"The general position of the Roundtable in this arena is a preference for light-handed regulation and some confidence that market forces will discipline monopolistic practices over time," said McLeod.