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Telstra: Trujillo to keep one foreign board post

The telco says new top dog Solomon Trujillo will choose -- in conjunction with its board -- which one of his current directorships at Pepsi, Target, EDS and newspaper chain Gannett he can retain.While Telstra chairman Donald McGauchie told journalists in Melbourne yesterday afternoon Trujillo had not made a decision on the matter, the company had earlier issued a statement saying the American would leave "all but one" of his four board appointments.

The telco says new top dog Solomon Trujillo will choose -- in conjunction with its board -- which one of his current directorships at Pepsi, Target, EDS and newspaper chain Gannett he can retain.

While Telstra chairman Donald McGauchie told journalists in Melbourne yesterday afternoon Trujillo had not made a decision on the matter, the company had earlier issued a statement saying the American would leave "all but one" of his four board appointments.

Any decision on the retained board appointment would likely take account of potential conflicts of interest between Telstra and the companies involved.

The matter of whether Trujillo would sit on the Foxtel board had not been discussed, said McGauchie. Telstra owns 50 percent of the company, with News Corporation and PBL taking a quarter each.

The Telstra chairman denied it was inappropriate for a chief executive of a company the size of the telco to have external board appointments.

"I think it's very useful," said McGauchie, "and what I've found useful in the United States is the degree to which large companies encourage their most senior executives -- not just chief executives but also executives in the upper ranks -- to have other board positions."

"They do it because it gives those executives a wider level of experience across other businesses."

McGauchie also defended the level of Trujillo's remuneration, which could see him bank AU$11 million in his first year of employment.

"The real issue here is getting value for shareholders out of what we pay," he said. "We had to pay a competitive package in order to secure the best person for the job. This is absolutely in the interest of shareholders."

That person, McGauchie acknowledged, was impossible to find within Telstra's own executive ranks. He said he was not impressed with Telstra's existing internal succession planning capabilities and that it would need to work on this in the future.

The Telstra chairman denied the federal government was involved at any level in making the appointment or determining remuneration.

"It was a process for the board," he said. "The government has had a knowledge of the rigour of the process and the way in which it was carried out, and I have in the last day or so formally consulted with the Minister [Senator Helen Coonan] on the appointment."

McGauchie said Trujillo would look to drive cultural change within Telstra and point the telco at becoming more service-driven and customer focused.

"No customer out there can be taken for granted, going into the future," concluded the chairman.