BT shifts the Openreach deckchairs

Added by Chris Pateman | Friday 17th February 2017

Openreach’s customers argued for full structural separation from BT.  Ofcom argued for legal separation.  And BT has just gone ahead with its preferred solution -- shift a few deckchairs, but keep running Openreach to suit itself.

So now Openreach has its very own board of directors.  They won’t be able to do the kind of things proper utility company boards do, of course – things like raising money from pension funds and institutional investors for 20-year-payback infrastructure projects.  But they will be able to look at customer service levels. So, hey, good result, right?

We at FCS somehow overlooked the invitation to help BT decide what kind of skills most need to be represented by the new non-executive appointments to the Openreach board.  The first we heard was when their new chairman was appointed, last November:  Mike McTighe, fresh from spending eight years on the board of Ofcom after a career spent with Cable & Wireless, Motorola, Philips and GE.

Nothing there for Ofcom to lock horns with then;  a reassuringly familiar face who can be relied upon to understand where the regulator is coming from.  But whose remuneration simply now comes from Openreach.

Now we have three new Openreach non-execs, too. 

Brendan Barber, former general secretary of the TUC, looks every inch the kind of guy who can be relied upon to keep the “further change would be far too complicated because of the BT pension fund” argument on the table. 

Edward Astle is a familiar face, having sat as an independent on BT’s Equality of Access Board for some years.  He, too, has a C&W background, as well as BICC and seven years responsible for National Grid’s telecoms and wireless comms business. 

Liz Benison, the most recent announcement, is a production engineer who started her career in the car-making industry before joining Capgemini and, most recently, Serco.  Linkedin tells us Liz specialises in “achieving success in matrix organisations, where impact and influencing skills are key”.

In other words, Openreach now has a Board where years of BT-conditioned thinking from the executive directors are not so much balanced as complemented by years of big-company, institutional and consultancy thinking from the non-execs.  All under the chairmanship of an individual who is intimate with the highest functioning level of a regulator which has spent the last 10 years trying to convince everyone that the Undertakings are a tip-top success that should be copied by other regulators worldwide.

If you were running a corporation whose culture is still that of a reluctantly privatised national monopoly, you couldn't look for a better board for your wholly-owned infrastructure division.  No risk whatever of a serious challenge to the cultural norms.  If, on the other hand, you're a frustrated CP customer, you might possibly have been hoping to see Openreach spreading its wings a bit.  While BT remains Openreach's sole shareholder, we've got two hopes.  Bob Hope and No Hope.