Breakingviews - Strong chairman is best way to fix BT board mess

  • 3/9/2021
  • 00:00
  • 3
  • 0
  • 0
news-picture

LONDON (Reuters Breakingviews) - Running BT’s board of directors has never been for the faint-hearted. The UK telecommunication operator’s chairman must juggle the competing demands of customers, government, employees and an army of shareholders. The vacancy created by Jan du Plessis, whose departure last week was followed by accusations he had been pushed out by Chief Executive Philip Jansen, will be hard to fill. It’s in everybody’s interest that BT finds a heavy hitter. The circumstances leading up to du Plessis’ surprise retirement remain sketchy. At 67 and after nearly two decades as chairman of stock market giants like SAB Miller and Rio Tinto, he has earned a rest. But Sky News, citing anonymous sources, reported that Jansen had demanded du Plessis’ departure, amid frustration at the former state monopoly’s slow decision-making. BT denies any “misalignment” between its board and management. Whatever the true story, a rift between chairman and chief executive is troubling at any company, let alone a 14 billion pound outfit with a languishing share price, 100,000 employees and the need to hook up 20 million British homes to full-fibre internet by 2027. More worrying yet for shareholders is the prospect of a board tackling those problems while struggling to rein in its go-getting chief executive. One solution regularly floated to BT’s funding woes is for it to offload a stake in its lucrative Openreach broadband network division. Given the current high valuations for telecommunications infrastructure, the unit, which generates nearly 2.9 billion pounds of EBITDA, would attract significant interest from private equity investors, pushing its valuation well above 20 billion pounds, based on sector deals from 2020. The proceeds could help pay for a more aggressive rollout of fibre connections, something that would doubtless please British Prime Minister Boris Johnson. It’s laudable that du Plessis might want to tread carefully over such a major shakeup. But it’s also laudable that Jansen, a former fintech private equity whizz, might be thinking creatively about ways to turn BT around. Any big decisions about strategy will now have to wait until du Plessis’ successor is in place. Investors, directors – and Jansen himself – would benefit from BT putting a heavyweight in the chair.

مشاركة :