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Firm condemned over NHS outsourcing ‘shambles’ given lucrative contract to arrest people dodging court fines

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Firm condemned over NHS outsourcing ‘shambles’ given lucrative contract to arrest people dodging court fines

A major firm condemned by MPs over a recent NHS outsourcing “shambles” has been given a lucrative contract allowing private companies to arrest people for dodging court fines.

Ministers have been criticised over the decision to hand over the collection of court fines to four private companies, including Capita, a major outsourcing firm accused of putting patients at risk by delaying transfers of medical records.

The results of the tender process were quietly published in the rush before the MPs’ summer break, finalising plans to transfer services done by civilian enforcement officers, currently employed by HM Courts and Tribunal Services (HMCTS), to the private sector.

It comes as a damning report by the Public Accounts Committee said 1,000 GPs, dentists and opticians were delayed from working with patients for up to six months and nearly 90 women were dropped from cervical screening programmes due to Capita’s botched delivery of backroom services for NHS England. 

Capita has apologised for “unacceptable failings in relation to the initial delivery” of the contract.

The Ministry of Justice (MoJ) has faced criticism in the past over the outsourcing of contracts to private security firms such as Serco and G4S, the latter of which won a multimillion contract for electronic tagging of offenders despite being investigated for overcharging the government for similar services.

And last week, it was revealed that private probation companies were being bailed out for the second time as ministers were forced to ditch “catastrophic” contracts two years early.

The outsourcing sector has also been under scrutiny since the collapse of construction giant Carillion in January.

Labour warned more people could be at risk of harm from “rogue private bailiffs” and accused the government of putting “private profits before the public interest”.

However an HMCTS spokesperson said the plans would save the taxpayer up to £46m over five years, which will be invested back into the justice system.

Shadow justice secretary Richard Burgon said: “This government continues to hand over lucrative contracts to a small handful of private providers despite repeated private sector failures across our justice system.

“This seems to be more about the Conservatives’ ideological fixation that the private sector is always right, rather than being about what works best for the public.

“Just as with the costly decision to privatise our probation services, the outsourcing of civil enforcement officers will see private profits put before the public interest.

“There is a real risk that the weakened oversight that accompanies privatisation will lead to more people becoming the victims of rogue private bailiffs. The government should scrap these plans.”

Former Lib Dem cabinet minister Sir Ed Davey echoed his calls, adding: “Just as one part of the Ministry of Justice ends the large parts of the privatised probation service for failure to deliver, a different part is privatising another arm of our justice system. 

“Incoherent would be a kind description of this kind of chaos in this calamitous government.

“And to add salt into the wounds, ministers see fit to hand these new contracts to Capita despite serious concerns the company could have put patients at risk in the handling of a service contract with the NHS.”

Mark Serwotka, general secretary of PCS, the civil servants’ union, said his members would consider strike action over privatisation of the service, which has already faced “chronic underfunding”.

He added: “Our members believe profit should have no place in the justice system.

“This is doubly important when you consider civilian enforcement officers have arrest powers. Any contracting out would undermine the public service ethos that is vital to the role and administering justice.”

Contracts were given to Capita, Excel Civil Enforcement, Jacobs Enforcement and Outsourcing UK.

A spokesperson for HMCTS, the executive agency responsible for the contract, said: “Enforcement agents must adhere to a strict code of conduct and will continue to be overseen by HMCTS.

“These contracts will save taxpayers £46m over five years, every penny of which will be reinvested into the justice system. This includes improving services for victims and witnesses.”


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Industry-led university research won’t solve skills shortage

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Industry-led university research won’t solve skills shortage

Universities partnering with industry to create industry-specific PhD programs is the “worst possible” way to fix skills shortages in so-called “deep tech” areas, such bio tech and quantum computing, leading researchers say.

Professor Michael Biercuk, director of the Quantum Control Laboratory at the University of Sydney, said there were already too many people with PhDs looking for work in his field, and having PhD students doing research dictated by industry would do nothing to help either academia or industry.

The quantum-computing startup he founded, Q-Control, wasn’t suffering from a shortage of people with PhDs in physics so much as a shortage of people with advanced technical skills, who could help build the technology coming out of the research.

“Why . . . is the PhD the right mechanism for collaboration (between universities and industry) as opposed to professional technical masters degrees or TAFE or other things?,” he asked.

Speaking at The Australian Financial Review Innovation Summit 2018, Dr Maya Cassidy, who co-manages Microsoft’s quantum computing development efforts at the University of Sydney, said she was experiencing the same problem: a shortage of people with technical abilities, rather than a shortage of researchers.

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Getting industry to sponsor PhD candidates wouldn’t solve that problem, and would only create the new problem of having too many people doing research into fields that aren’t sufficiently forward-looking, she said.

In any event, said Professor Biercuk, it’s not Australia’s universities that are to blame for any lack of innovation going on: it was industry, and allowing industry to dictate the research at universities could actually degrade the quality of research.

“How do we prevent the self-reported non-innovative nature of Australian flowing back into PhD-level research,” he asked.

“You need people who are building products in six months, you need people who are building products three to five years from now, you need people who are doing applied research on a 10-year horizon and you need people who are doing basic research for 40 years from now, 50 years from now.

Professor Michael Biercuk says having PhD students doing research dictated by industry would do nothing to help either ...
Professor Michael Biercuk says having PhD students doing research dictated by industry would do nothing to help either academia or industry.

Christopher Perace

“The debate has been so focussed on why can’t we get academics to build more companies. I don’t think that’s the right approach.”

Only around 2 per cent of Australian companies report that they’re engaged in innovation, “so I don’t think universities are to blame here”.

“There are huge opportunities for better partnerships, and better government incentives and things (like that), but if we just take exciting, interesting people doing great work in universities on whatever timescale, and shift all the incentives so they’re building mobile applications with a six-month time horizon, you destroy the whole community,” he said.

Petra Andrén, the CEO of Cicada Innovations, told the AFR Innovation Summit that, contrary to what quantum computing companies were experiencing, the startups in Cicada’s technology incubator were indeed experiencing a shortage of workers with PhDs, and were being forced to look overseas for talent.

Having PhD programs that worked closely with industry would be an important part of a package of solutions to Australia’s skill shortage, and that package would also need to include building up advanced technical skills at TAFEs and other places, she said.

Cicada had been working to help establish PhD programs that were a collaboration between industry and academia, and it was on the verge of beginning a pilot program, testing that very concept.

“We know it’s going to be awesome,” she said.

“We know that the data is going to be great.”

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Godfreys owner celebrates 100th birthday by mopping up takeover hold-outs

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Godfreys owner celebrates 100th birthday by mopping up takeover hold-outs

John Johnston, the new owner of retailer Godfreys, turns 100 on Tuesday but he’ll leave a bigger celebration until this weekend as his Arcade Finance vehicle begins the compulsory acquisition process to mop up 357 holdouts who declined to accept his 33.5¢ offer.

Mr Johnston, who lives in an upmarket retirement complex in Adelaide’s inner south, scooped up 93.3 per cent of Godfreys in the takeover that began in April, and on Tuesday will formally begin the process of soaking up the shares of those who didn’t accept. Some of those hold as few as one share, and will be paid just 33.5¢ as part of the compulsory acquisition.

Mr Johnston is planning to have a relatively quiet day on Tuesday, with a private party being organised for him on Saturday that will be attended by family, friends and business associates including chief executive John Hardy.

He was born on July 31, 1918 and first became involved in the Godfreys business in the 1930s.

The new owner of Godfreys turns 100 on July 31 and will also start the process of mopping up the shares of 357 holdouts ...
The new owner of Godfreys turns 100 on July 31 and will also start the process of mopping up the shares of 357 holdouts in his successful takeover bid.

AAP

Mr Johnston is relying on Mr Hardy to spearhead a revival of the Godfreys business after he was recruited on May 25 to run operations for the third time. Mr Hardy said Mr Johnston was too focused on the turnaround plans and the new dawn for Godfreys, to spend too much time celebrating his birthday on the day it falls.

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“He’s working on his second hundred years,” he said.

Mr Johnston famously said three weeks ago that Godfreys needed to do more on social media.

Mr Johnston launched the bid to try to preserve family wealth, and save the jobs of the employees at the 200-plus stores in a business that has been a major part of his life for 82 years. His daughter, Jane Allen, is one of the directors of Arcade, while the other board member is Grant Hancock, a long-time confidant from Adelaide accounting firm LeCornu Lewis Hancock.

Private equity firms Pacific Equity Partners and Unitas Capital paid $300 million for Godfreys in 2006, buying it from Mr Johnston and a group of other major shareholders.

But the private equity firms loaded it up with too much debt and when the global financial crisis hit in 2008 the business struggled to deliver a return. Mr Johnston and investment bank Nomura bought it back for just $100 million in 2011. Investec bought a stake a year later.

Mr Johnston, through the Arcade Finance vehicle, remained the largest shareholder in Godfreys after the ASX float in late 2014 even though he sold down some of its stake.

But a succession of chief executives in the past few years and fierce competition from big electronics retailers Harvey Norman and JB Hi-Fi, which now also owns Good Guys, have hit the old-school Godfreys retail business.

The rise of online players such as Amazon and Kogan.com has also undermined Godfreys, which was also too slow to embrace shifting consumer trends towards stick vacuums and away from traditional barrel vacuums. The popularity of the highly fashionable brand Dyson, which is a big seller for Harvey Norman and JB Hi-Fi, has also caused major problems for Godfreys.

The main brands Godfreys sells are Miele, Hoover, Electrolux, Wertheim and Sauber.

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As Microsoft gains cloud share, competitors are changing their stance

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As Microsoft gains cloud share, competitors are changing their stance

A few analysts picked up on Nadella’s comments.

“We are pleased to hear of continued early traction with Azure Stack as we think it offers Microsoft a unique hybrid-cloud play,” Stifel analysts led by Brad Reback wrote the next day.

In the past few weeks, Amazon and Google have made announcements to more fully support customers that want to keep doing computing work on their own servers, rather than solely using public clouds.

On July 17, Amazon announced new capabilities for Snowball Edge, a hardware device that was originally meant as a way to do lightweight computing and eventually move data into the Amazon cloud. Now customers can run a variety of standard EC2 virtual-machine instances — each of which can perform multiple computing tasks — on these boxes. EC2 instances are widely used for all sorts of computing tasks in Amazon’s main public cloud.

“If you need to move very large amounts of data into the cloud, or if this data sits in a location where it’s not easily brought into the cloud, we need to give you the tools,” Amazon chief technology officer said at a company event in New York.

Then, earlier this week, Google introduced hybrid-cloud software called the Cloud Services Platform. One of the new technologies is GKE On-Prem. GKE stands for the Google Kubernetes Engine, which is a cloud tool Google offers to help customers manage containers — an alternative to more traditional virtual machines for running programmers’ code. The new tool is similar, except it can work on companies’ existing data center infrastructure.

Amazon has introduced other tools for use in corporate data centers in the past, like providing broader access to the Amazon version of Linux, and Google has announced partnerships with companies that sell corporate data center gear, like Cisco and Nutanix. But the new moves indicate the cloud providers are more interested in meeting the needs of businesses, government agencies and other groups that don’t want to depend exclusively on outside providers for their IT needs — or at least not yet.

“I want to support the customer no matter where it is, and really, it’s not a race,” Google Cloud CEO Diane Greene said in an interview with CNBC earlier this week. “This is a long-term play, and we want to do the right thing for the customers, because we want to be their partner long-term.”

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Leak of AWU raids referred to DPP, renewing pressure on Michaelia Cash

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Leak of AWU raids referred to DPP, renewing pressure on Michaelia Cash

Employment Minister Michaelia Cash is facing renewed pressure after an investigation into leaks about raids on the Australian Workers’ Union was referred to Commonwealth prosecutors.

The Australian Federal Police confirmed on Monday it was liaising with the Commonwealth Director of Public Prosecutions over media tip offs ahead of the October 24 raids.

Police are expected to pass on material from the investigation within two weeks before prosecutors determine if charges are appropriate.

The investigation could relate to the unauthorised disclosure of government materials, an offence carrying a maximum two-year jail term.

A whiteboard was used to screen Michaelia Cash's entry to Senate estimates.
A whiteboard was used to screen Michaelia Cash’s entry to Senate estimates.

Nine News

Police raided the AWU offices in Melbourne and Sydney as part of an investigation by the Registered Organisations Commission,  into donations made by the union to GetUp! more than a decade ago.

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Labor leader Bill Shorten was head of the union at the time.

Amid growing political controversy, Senator Cash denied any knowledge of the leaks before Senate estimates hearings in October.

She later confirmed her senior media adviser had resigned.

Adviser David De Garis quit her office after it was confirmed he tipped off a range of media organisations to be in place outside the union’s offices ahead of the raids taking place.

Bill Shorten led the Australian Workers Union at the time of the donation to GetUp!
Bill Shorten led the Australian Workers Union at the time of the donation to GetUp!

AWU national secretary Daniel Walton described the development as troubling but not surprising.

“From the information in the public domain, it seems abundantly clear that Senator Cash and her office were abusing their power by using taxpayer-funded institutions to go after their political enemies,” Mr Walton said in a statement.

“Senator Cash and her government are obsessed with harming unions and their members.”

“Clearly the AFP have learned enough here to believe it warrants the attention of the prosecutor,” he said.

In December, Senator Cash lost a court bid to avoid handing over communications between her office and the union watchdog over the raids.

The Federal Court held the AWU had a reasonable basis for seeking the documents to determine if the Registered Organisation Commission’s investigation and its raids were for an “improper political purpose”.

The judge also rejected bids to set aside the AWU’s subpoenas on Mr De Garis, the Fair Work Ombudsman and its media director Mark Lee.

The case was back in court on Monday, and an administrative hearing is set down for August 21.

Labor’s employment spokesman Brendan O’Connor called on Senator Cash to stop “hiding from scrutiny” on Monday.

“There are numerous questions Senator Cash needs to answer including, what role did she play in the leak?

“Is she a witness or is she under investigation? “Senator Cash’s conduct is treating the Parliament and the Australian people with contempt,” he said.

As she faced criticism over handling of the raids, Senator Cash was forced to withdraw comments in Senate estimates hearings in which she repeatedly threatened to name “every young woman” in Bill Shorten’s office about whom she had heard rumours.

The AFP told federal Parliament in February witness statements had been taken from more than a dozen people related to the leaks, with investigators speaking to more than 30 additional witnesses.

ACTU secretary Sally McManus said Senator Cash had been in hiding and should explain her role in the leaks.

“She hasn’t answered questions about this matter. This further undermines our faith in her government and in her judgment,” she said.

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Scottish League Cup: Three all-Premiership ties in second round draw

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Scottish League Cup: Three all-Premiership ties in second round draw
Aberdeen will host St Mirren in the last 16

There will be three all-Premiership ties in the last 16 of the Scottish League Cup.

Rangers face a trip to Kilmarnock, Aberdeen will host newly-promoted St Mirren, and Motherwell will travel to Premiership play-off winners Livingston.

Partick Thistle host Celtic and Hibernian are at home to Ross County in a repeat of the 2016 final.

The ties will be played on the weekend of 18/19 August.

Holders Celtic enter the competition at this stage, along with Aberdeen, Rangers and Hibernian, with all four of Scotland’s European entrants allowed a bye into the second round.

Hearts confirmed their place in the second round with a 5-0 win over Inverness Caledonian Thistle, and now visit Dunfermline Athletic, who beat them at Tynecastle on penalties in the group stage last season.

Championship clubs Ayr United and Queen of the South were both were drawn against top-flight opposition, with Ayr travelling to face Dundee, while Queens host St Johnstone.

The draw in full: Livingston v Motherwell, Dundee v Ayr United, Dunfermline Athletic v Hearts, Kilmarnock v Rangers, Aberdeen v St Mirren, Partick Thistle v Celtic, Hibernian v Ross County, Queen of the South v St Johnstone.

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Safety measures to protect mourners at funeral of novichok victim Dawn Sturgess

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Safety measures to protect mourners at funeral of novichok victim Dawn Sturgess

Safety measures have been put in place to protect mourners at the funeral of novichok murder victim Dawn Sturgess.

There will be no pallbearers when the mother of three is cremated in Salisbury on Monday, and her coffin will already be there when people arrive. 

Public Health England (PHE) has been working with funeral directors and the crematorium to prevent any further exposure to the nerve agent that caused Ms Sturgess’ death.

Reverend Philip Bromiley, who will be leading the service, said the measures had been put in place to make sure everything is as safe as possible.

“One of the things that it will entail is there won’t be any pallbearers and the coffin will be in situ before we arrive, so obviously there’s probably been precautions around that and the coffin itself,” he said.

“I have got every confidence in the powers that be that they know what they’re doing.

“The family will have 15 minutes of quiet with Dawn’s coffin.”

PHE would not comment on the funeral but a spokeswoman repeated the general advice to the public that the risk remains “low”.

Ms Sturgess, 44, died on 8 July after she and her partner Charlie Rowley, 45, both fell ill after coming into contact with novichok at the end of June.

The incident followed the poisoning of Sergei Skripal and his daughter Yulia with the same nerve agent in Salisbury in March. The Skripals both survived the attack.

Mr Rowley said he remembered finding a sealed box in a cellophane wrapper containing a perfume bottle and gave it to his partner as a gift.

He claimed Ms Sturgess fell ill at his home in Amesbury just 15 minutes after she sprayed the oily substance on to her wrists on 30 June.

Rev Bromiley said he had heard Mr Rowley, who was discharged from hospital earlier this month, would be attending the funeral service.

Ms Sturgess’ mother and father were both involved in planning the funeral, while Ms Sturgess’s daughter chose the first hymn, Shalom Shalom.

“That hymn has set the tone for the whole service,” said Rev Bromiley. ‘We will be wanting to do two things.

“One is to celebrate Dawn’s life, and two, really give thanks for the person that Dawn was because she was a really kind, loving, generous person and I think the family are really keen that that comes across in the service.

“But also, we want to pray that shalom, that peace, will come and permeate through the service and help everyone who’s at the service, and also pray for peace for the family, for the city and for everybody involved.”

PA

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Ed Husic’s AI centre of excellence to focus on ethical, humanist AI

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Ed Husic’s AI centre of excellence to focus on ethical, humanist AI

The Labor party’s $3 million pledge for a new artificial intelligence centre of excellence will aim to make Australia a hub of “ethical” AI development at a watershed moment of backlash against the internet giants, opposition spokesman for the digital economy Ed Husic has told The Australian Financial Review Innovation Summit.

Mr Husic said 2018 would be remembered as a “threshold year” in technology as momentous as 2007, when the internet surpassed 1 billion users, the iPhone and the Android operating system were launched, and Airbnb and bitcoin were conceived.

“Ten years later, 2018 has emerged as the threshold year for how​ we use those tools and how they are used on us,” Mr Husic said.

He said the AI research centre would be non-partisan, and unlike the industry growth centre model already established in sectors like cybersecurity or advanced manufacturing, would involve union and community representatives as well as industry and academia so that a more human-centric vision for AI development could be developed.

Mr Husic won support for his announcement from Liesl Yearsley, a local AI entrepreneur who has already sold one business to IBM, whose company Akin is conducting research and development into the application of neuroscience into AI platforms, with the aim of making them more responsive to human concerns.

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Worries about how companies and governments use our data, our personal over-reliance on technology, and the way it will be used in our places of work had in recent months, Mr Husic said, led to responses like Apple revealing it would let iPhone users measure their screen-time, the backlash over My Health Records in Australia, and harsh new penalties for data misuse in the European Union. 

Yet the possibility of mass job displacement from the introduction of AI was perhaps the biggest concern of all and cried out for a united response.

“At a time where the narrative of the day levers off division and dispute, we think the Centre provides the perfect ground to think and act together for broader benefit,” Mr Husic said.

In a less partisan spirit, Mr Husic criticised the Government’s retreat from its ‘jobs and innovation’ mantra of three years ago and questioned why it had taken two years to respond to Innovation & Science Australia recommendations to reshape the research and development tax incentive.

Labor was still working on its response to R&D incentive changes finally announced this year, which capped at $4 million the maximum refund a start-up could claim in any one year. Mr Husic said entrepreneurs just wanted the incentive left alone.

Recently passed ‘safe harbour’ legislation would also be revisited by a Labor Government, Mr Husic told The Australian Financial Review on the sidelines of the Summit.

Parliament recently passed an extension of the protections that prevent rights holders from suing so long as the providers of infringing material obey takedown notices, or challenge them in good faith. But only internet service providers and institutions in a few sectors, including education and disability, are covered by them.

This left Australia’s thriving online marketplace industry, including companies like Redbubble, Envato and 99Designs, with the prospect of legal costs to defend every alleged copyright infringement, Mr Husic said.

“Why should the lawyers get money these companies could be spending on creating jobs?” Mr Husic said.

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Koch network takes on Trump’s tariffs with six-figure ad buy as billionaire admits tensions could boil over

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Koch network takes on Trump’s tariffs with six-figure ad buy as billionaire admits tensions could boil over

The political network funded by billionaire industrialist Charles Koch is unveiling the latest phase in a multi million dollar campaign against import tariffs implemented by President Donald Trump, CNBC has learned.

“Trade not aid,” which describes that importance of trade and the harm tariffs have on the farming community. The news was announced on the second day of the Koch network donor summit in Colorado Springs.

Beyond the ad’s attempt to highlight the vital role of the agricultural sector, it also questions Trump’s recently announced $12 billion aid package to help farmers.

“American farmers work hard to put food on our tables but because of new tariffs our farmers livelihoods are at risks,” the ad states. It later concludes by saying: “Farmers want trade, not aid.”

Trump recently announced import tariffs on a variety of goods coming from China, the European Union, Canada and Mexico. Many of those critical trading partners have retaliated with billions of dollars’ worth of trade barriers of their own against exports coming out of the United States.

In addition, Freedom Partners, along with two other network organizations in Americans for Prosperity and The LIBRE Initiative, sent a letter to Trump. The groups called on him to rejoin the Trans-Pacific Partnership (TPP), while congratulating the administration’s economic policy achievements of tax reform, reducing financial regulations and inching toward an agreement with EU President Jean-Claude Juncker about removing the tariffs.

The groups argued, however, that if the U.S. doesn’t agree to go back into the TPP, the 11 other original countries who are still part of it will forge ahead with their rebranded Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Such a move could put American businesses at a disadvantage, it added.

“As a practical matter, once the CPTPP is in full effect American businesses will be at a distinct competitive disadvantage when trying to sell in these markets and our consumers will miss out on lower-priced goods,” the letter stated.

The new ad buy and letter to the president comes the same day as Koch admitted in a rare press briefing that a full blown trade war could be on the horizon.

“If it’s severe enough it could,” Koch said when asked about whether Trump’s protectionist policies could result in a trade war.

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Telstra executive shake-up points to succession planning for CEO Andy Penn

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Telstra executive shake-up points to succession planning for CEO Andy Penn

The management shake-up at Telstra will inevitably be viewed through the prism of the succession planning for chief executive Andy Penn.

This puts the spotlight on two women – new chief financial officer and head of strategy Robyn Denholm and head of consumer and small business, Viki Brady.

Both women have been with the company for less than two years but they must be considered serious contenders to replace Penn, who is under intense pressure just three years into his tenure.

Denholm, who was previously chief operations officer, is the most obvious contender to replace Penn because of the depth of her experience in leading executive roles in Australia and overseas.

Telstra group managing director of networks Mike Wright and Telstra chief operations officer Robyn Denholm. Denholm, who ...
Telstra group managing director of networks Mike Wright and Telstra chief operations officer Robyn Denholm. Denholm, who was previously chief operations officer, is the most obvious contender to replace Penn

James Brickwood

She has worked before as a CFO at Juniper Networks and she maintains a close linkage with technology disruption through her directorship of electric car company Tesla.

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Denholm is head of the Tesla audit committee, which gives her a unique perspective on financial dynamics behind the strategic moves by Tesla founder Elon Musk.

As CFO of Telstra, she will be one of the key faces of the Penn’s turnaround plan called T22. It will be Denholm touring the world with Penn selling the new strategy to fund managers and giving analysts insight into the numbers.

Mind you, being Penn’s right hand numbers person can be a risky career move as shown by the sudden departure of Warwick Bray as CFO. Bray, who was hand picked by Penn to be CFO in May 2015, is leaving Telstra.

Brady is another obvious contender to replace Penn given that she is responsible for the division that delivers about 40 per cent of earnings. Her three important tasks are to simplify Telstra’s mobile offerings, build Telstra’s mobile market share and stop the decline in mobile profit margins.

Being Penn's right hand numbers person can be a risky career move as shown by the sudden departure of Warwick Bray as CFO.
Being Penn’s right hand numbers person can be a risky career move as shown by the sudden departure of Warwick Bray as CFO.

Jessica Hromas

Penn used the management shake-up to shift Brendon Riley, who was responsible Telstra Enterprise, to run the newly created infrastructure company InfraCo. Riley was previously seen as one of the up and coming executives with the potential to make a run for Penn’s job.

But he will now be part of a company earmarked for possible demerger, trade sale or sale through an initial public offering.

Penn also removed head of marketing and media Joe Pollard, head of technology innovation and strategy, Stephen Elop and head of wholesale Will Irving. They will all leave Telstra.

Elop’s departure has given Penn the chance to move parts of his portfolio including TelstraLabs under the responsibility of new division called product and technology. An external appointment of someone from overseas has been made and will be announced soon.

Penn says Telstra's innovation in future will be about finding what customers want and pursuing solutions.
Penn says Telstra’s innovation in future will be about finding what customers want and pursuing solutions.

Louie Douvis

Penn tells Chanticleer that the creation of the product and technology division was in recognition of the fact that Telstra’s approach to innovation was not focused on customer outcomes. He says Telstra’s innovation in future will be about finding what customers want and pursuing solutions.

Penn told the ASX that the changes to seven roles in Telstra’s top executive team would create a “simplified and streamlined structure” and would “remove duplication, hierarchy and silos across the organisation”. But he will still have the same number of direct reports.

The other significant executive move announced on Monday were the appointment of former SBS chief executive and former Optus executive Michael Ebeid as head of enterprise, which was previously an avenue for the ascent of former CEO David Thodey.

Nikos Katinakis, who was previously Executive Vice President Networks for Reliance Jio in India, will be the new head of IT and networks. David Burns, currently with the enterprise team, will lead Global Business Services.

Penn’s executive changes look eerily like the sort of reshuffle associated with the appointment of a new CEO. He says he is not going anywhere and will remain in charge over the three year period needed to execute the T22 strategy.

He says it is part of his job to recruit the talented people that can be considered in the succession planning by the board of directors, led by chairman John Mullen.

Tony Boyd

tony.boyd@afr.com.au

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