Telkom will this morning hold an annual general meeting (AGM) at which shareholders will vote on the next set of directors that it hopes will unite in implementing its turnaround strategy quickly.
Among the recommendations to be made at today's meeting is that Jeff Molobela, appointed in November 2009, not be re-elected. Molobela was Telkom's chairman between then and February 2011.
The board's decision not to recommend Molobela for another term was taken unanimously and with due care and consideration of several factors, including the challenges that lie ahead and the speed with which they must be dealt, says Telkom.
Molobela's appointment was made by government, Telkom says in a 2009 announcement.
Government is Telkom's single largest stockholder, with about 39%, while the state's Public Investment Corporation has around another 10%.
Telkom's announcement adds that the board must demonstrate a collective commitment to achieve success in its turnaround objectives. Molobela was given an opportunity to respond when the board discussed the matter, it says.
Change needed
Telkom says in its lengthy explanatory note that shareholders will be asked to vote on several proposals, which have been recommended by its board. It says the board is mooting the proposals in the belief that shareholders will "support interventions that will enable the success of the board's turnaround strategy and lead to the enhancement of shareholder value".
Telkom notes its owners are expecting a change: a significant improvement in the company's performance and a determined effort to enhance value for its stakeholders.
Among the special resolutions are that the proposed directors to be elected include chairman Jabu Mabuza, CEO Sipho Maseko, Kholeka Mzondeki, Leslie Maasdorp, Louis von Zeuner, Fagmeedah Petersen, Susan Botha, Khanyisile Kweyama and Clive Fynn.
Botha, Fynn, Kweyama, Petersen and Von Zeuner joined the board last December, after Mabuza, Maasdorp and Mzondeki. This took Telkom's board back up to 14 members after it was decimated towards the end of the year, due to several resignations and government vetoing some appointments.
New skills
It says the board wants to reconstitute itself by injecting fresh skills, which are appropriate to the growth trajectory it wants to follow as part of its turnaround objectives. It also wants to focus on the common goal of achieving its mandate within governance parameters.
The board's recommended directors take into account the skills it needs, as well as its commitment to diversity.
Telkom explains a third of its directors must retire at each AGM and that those who have held office for three years or more are first in line to step down. Those who have been there for nine years must retire, it adds.
Directors due for retirement in terms of these provisions are CFO Jacques Schindeh"utte, Itumeleng Kgaboesele, Navin Kapila, Brahm du Plessis and Molobela. Only Du Plessis is not available for re-election, while Telkom recommends that Molobela not be re-elected.
Molobela serves on the boards of N3TC, African Value Investment Holdings, Concorde Metals and Labemo Properties, among others. He has a Bachelor of Science degree in engineering from Imperial College, in London, and an MBA from Imperial College Business School.
Telkom is also proposing that a cap be placed on issuing shares of 5%, which is below the amount companies are allowed to issue. It says it will only issue shares after a great deal of consideration.
It adds that it proposes that any general share repurchase will not, in any one year, exceed 10% of the shares in issue. In addition, if shareholders agree, no deal can be done at a price at more than 10% of the market value of the stock within five days of an acquisition.
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