Pyne quitting Telecom's board

By PETER GRIFFIN IT editor






The man whose appointment to the board of Telecom sparked a commotion last October is to quit the company, claiming his Asian business commitments are taking too much of his time.

But sources within the financial community say continuing pressure from institutional investors and the Shareholders Association led to Lindsay Pyne's decision to step down in September.

One institution said the toppling of such a high-profile appointee was "unprecedented" in New Zealand.

Telecom shareholders had but one brief glimpse of Pyne, who fronted up to the company's annual general meeting in October to stiffly defend his past business record.

He was responding to fund managers AMP and Brook Asset Management who cited a 1993 Securities Commission report that criticised the accounting practices of the Bank of New Zealand during Pyne's term heading the bank.

Shareholders Association head Bruce Sheppard joined the chorus of opposition.

Nevertheless, Pyne won 92 per cent of the shareholders' vote.

Financial commentators were perplexed at Telecom's determination to bring Pyne onboard, with some suggesting he was being groomed to replace ageing chairman Roderick Deane.

His resignation from the board, which paid him an annual fee of $125,000, sinks that prospect.

"Life's changed for him," said Deane, who was adamant Pyne's decision to leave had been entirely his own. Pyne was busier in his role as adviser to the Bangkok Bank.

"He had been hoping to get back to New Zealand in the next year or two, that was part of the deal. But that might be a longer time period than he had hoped," said Deane.

He was not aware of any "undue pressure" to have Pyne step down and thought dissatisfaction with Pyne's appointment was restricted to a handful of critics.

"The percentage of votes Lindsay got at the AGM was 92 per cent. In that sense he was strongly endorsed at the time."

Shareholders Association head Bruce Sheppard yesterday gave Pyne "full marks" for doing the "right thing". "Having seen the dissent at their last AGM, it's clear that Rod Deane or Lindsay Pyne decided that the appointment was too controversial and it was best for the company that he find something else to do," said Sheppard.

Simon Botherway, of Brook, said: "We wish him well for his commitments in Asia."

He added: "Our preference is for someone with more recent experience of the Australasian telecommunications industry."

It is understood that displeasure at Pyne's position on the board was expressed by an institutional investor as recently as this month.

"One of their objectives this year was to get Pyne to stand down but it was also to make a stand against Deane who is seen as being autocratic," said one industry expert.

Other sources in the industry said it was likely Telecom wanted to avoid another confrontation at the company's annual general meeting this year.

"He probably thought he'd serve a decent interval and quietly go, which is what has happened," a source in the financial sector said.

Sheppard said the Telecom board was in need of new blood and there was no obvious succession plan in place for Deane.

"That view's obviously shared by the board or they wouldn't be seeking to make new appointments," he said.

Telecom's board is heavy on legal and financial experience.

Telecoms expert and board member Michael Tyler flies in to attend roughly every second board meeting but dials into the rest via a conference call.

Deane is the second longest-serving board member behind John King, who has been on the board since 1990.

"I don't think I've missed a board meeting since I became chief executive in 1992," said Deane.

"I attend all the board committees as well."

Deane, who also chairs the boards of Woolworths and the ANZ bank in Australia as well as the boards of Fletcher Building, Telecom and ANZ/National locally, said the trend among those other companies was to maintain small boards.

"They've all gone for small boards, with typically six to eight members. That's in contrast to where we were 20 years ago when boards were often 12 to 15 members."

Deane said "intellectual horsepower, the ability to work within a board environment and good commercial judgment," were the qualities sought in Pyne's replacement.

Sheppard hoped Telecom's hiring process would this time be "more transparent" and the outspoken advocate for the common shareholder even has some recruitment tips for Telecom.

"I can throw a couple of names in but I'll only do so if asked to.

"Two names already come to mind who are young and energetic and already in the telecoms industry."

He said the Shareholders Association had already successfully recommended one board member candidate for a public company.

A Telecom spokesman said Pyne, who is at present in Bangkok, was too busy to comment.

Attempts to contact him directly were unsuccessful.