Telkom board member and former chairman, Jeff Molobela, withdrew his bid to be re-elected as director after a unanimous decision was made by the board not to recommend him for another term.
Molobela was appointed by government in November 2009, and served as Telkom's chairman between then and February 2011. Molobela apparently handed a letter to shareholders prior to the annual general meeting (AGM) this morning, accusing the board of being dysfunctional and saying he was not recommended for re-election because of his objection to some board decisions, which he believes were not in the best interest of the company.
CEO Sipho Maseko responded to this by saying it was Molobela's decision to step down and that his letter is "a bit of a sideshow". He says he believes the board has always been accessible to all company employees to raise issues on whether the board's decisions are in the best interest of Telkom. "The main gig is that the AGM went well and the overall support from shareholders has been good actually."
Maseko notes the board has been in constant dialogue with shareholders and management on a range of issues to create "the right sort of alignment". He says it was vital for the board to improve the clarity and frequency of communication, and believes it is now on the right track.
According to Maseko, the board is working on a three-pronged turnaround strategy about which more details will be revealed at the interim results announcement in November. He says the main focus areas now are resetting the company cost base, creating a new affinity with Telkom customers and resolving the mobile issues in a sustainable manner. "The core ingredients of a turnaround have been identified. The next part will be, how do we mobilise the whole of Telkom?"
Maseko also mentioned an employee shares scheme, linked to the achievement of corporate milestones and individual milestones. "Now the work starts to get Telkom on a different trajectory altogether as far as financial aspects are concerned."
Responding to a question whether he feels Telkom management has the correct set of skills to successfully implement a turnaround strategy, Maseko says he believes there is a lot of passion and commitment in his team. "We need to make sure we have the right people in the right jobs doing the right things. [The turnaround] is not dependent on who leads it; the processes and systems of the firm must be such that it gives it momentum."
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