Happy New Year COMRADS (Telstra share holders) If your a Telstra share holder like me, by now Comrad, you would have realised that your investment in Telstra was actually an investment in government social policy to provide cheap telecommunications to the Australian people at the expense of the Telstra shareholder and the depreciation of the copper network.

Recently Comrad Costello (the treasurer) asked Comrad Graeme Samuel, chairman of the ACCC (Australian central control of competition) to investigate further the effects of the way it sets wholesale prices for Telstra's copper network. I can assist our Comrads and save the ACCC the investigation on the effect it has on wholesale prices. The ACCC through its regulation of wholesale pricing implies influence, and guilt by association and therefore is dealing out market share to Telstra competitors while Telstra’s network depletes and becomes obsolete. This means the ACCC in effect is controlling market share and therefore in breach of its own regulation. Conclusion, the ACCC should prosecute itself for controlling the telecommunications market.

If the Government wants to use Telstra as a vehicle for its social policies and regulate Telstra into the ground, then the government needs to buy the 49% of Telstra shares from small investors, or, dissolve its 51% stake in Telstra and take over the copper network so that it can regulate wholesale pricing and carry the risk of maintaining telecommunications infrastructure.

Imagine if the commonwealth bank was forced to provide branches in all isolated areas. In fact, banks that have closed braches in rural communities have done so without any social responsibility and have increased the burden on Telstra to provide services to replace the very same unprofitable branch closure. So it’s OK for banks to close branches, reduce services and cost to increase profits for their bank shareholders but Telstra must comply with regulation and subsidise services at the expense of Telstra shareholders.

As a Telstra shareholder I would insist Telstra management cease all non profit and subsidised services to reduce cost and increase return to Telstra shareholders. That’s what a publicly listed company as an entity has the obligation to do, not to provide social services because a government owns 51%, that is the responsibility of government. As Comrad Costello stated, the governments value has been wiped by 7 billion dollars, what he shouldn’t forget while he keeps one eye on the prime ministers chair, is that 1.6 million small investors have also lost about 7 billion dollars. That’s 1.6 million very annoyed voters.

Telstra should embrace the principle of free directory assistance for all and support it with the finest systems design it can manage. Availability of fast, accurate directory information free of privacy glitches creates a highly visible image of user friendliness that is seen to be 'really real' by individuals and corporate/government entities alike.

If Telstra doesn't take the trouble to develop and own the technology to make that happen, it will miss out on its greatest opportunity to capture the hearts and minds of cusdtomers - comprising everyone except infants, lunatics and dotards who, by definition, are incapable of meaningful communication. The vast majority of customers don't mind paying for service. In the communications industry, 'service' in the mind of a customer includes actually making the desired connection. Any pre-connection costs should be paid by the core service provider, if for no other reason than customer satisfaction.

But the main business driver is the glittering prize of total ownership of distribution technology. Providing efficient, secure and free directory assistance backed by appropriate advertising should go a long way towards ensuring the evolution of a positive political environment in that regard.

I am not against CSR – running a marketing and organisational research business, I am committed to the education of younger members, frequently give talks to industry and carry out work for charitable organisations. However, I have some reservations with CSR as a potential management fad. It all depends on leadership of the organisation.

Three brief points.

1: Over the last 20 years or so, management has been swept by all kinds of fads, such as TQM, learning organisations, world's best practice, the pursuit of excellence, process re-engineering and more recently, such things as the service-profit chain, benchmarking and, more recently, “engagement”. In principle, they are all “good ideas”, but they frequently suffer from failure in implementation, and/or management adopting next year's new fad before the current one has had its chance. That is how they become fads, either poor implementation or because of management's blind reaching out for "magic bullet solutions" to complex organisational challenges.

2: Several years ago, while Senior Lecturer in Marketing at Monash University, we undertook a research investigation into "why do marketing strategies fail?" We found much in the strategic marketing literature, and also in the management literature pertaining to strategic planning - different authors of course, not talking to each other, because the silo mentality of academia tends to stifle cross-disciplinary communication and cooperation (sounds familiar to anyone working in large organisations?). The most frequently mentioned cause was "failure in implementation". Once the strategy was decided, everyone went off to lunch or moved onto the next item on the meeting's agenda. Nobody was really given responsibility for following through on "implementation", on what the organisation had to actually do by way of organizing, planning, process mapping and re-engineering, resourcing, communicating, training, monitoring and measuring progress, gathering feedback from the implementers (or the staff who are most affected), reacting to and resolving implementation issues, etc. in order to ensure successful management of the changes implied in the new strategy.

3: On Corporate and Social Responsibility, only a sinner would disagree with the principle. However, I believe that it does raise 2 issues: a) An organisation's reason for being (among other things) is to service all stakeholders. Customers expect good products and services (and pay for that), employees expect salaries for work done (and be able to support their family now and in the future), shareholders and superannuants look for income from investments (or they are better advised to invest in more profitable companies) and government expect sufficient taxation revenue from organisations and employees to provide appropriate levels of community and social service.

Hence, there has to be balance between an organisation's strategic intents, sustainable profit performance and the interests of all stakeholders and CSR. b) Based on the history of management fads, there is real danger that CSR will fall into the same trap. Certain companies have used sponsorship of the arts or sports to divert attention from their unhealthy products or practices. Again, I emphasise it is "good management" which causes organisations to be successful and which should be the primary focus. CSR (along with serving ALL stakeholder interests) should be planned consequences of "good management". Consider “The proliferation of management fads is hardly surprising from the supply side. Like the fashion industry, the management consultant industry always has to have something new to sell. Is it possible that rational managers would chase fads? Herd behavior, which refers to the tendency to imitate the actions of others, ignoring one's own information and judgment with regard to the merits of the underlying decision, provides an answer. SEE http://www.professorbainbridge.com/2003/11/management_fads.html

If Telstra were serious about Corporate Social Responsibility they would not be using offshore call centres or having their staff uniforms manufactured overseas. This practice is costing Australian jobs, all to save a few dollars. Telstra should be using Australian made or Australian owned product wherever possible.

John Rolland, Head of Telstra Customer Sales and Service responds: Telstra does not use call centres based overseas. All Telstra call centres are based in Australia.

Multi national companies today in a global market based economy should recognise that corporate resposibility is not just about creating a community perception.

Companies need to demonstrate through their actions how they are taking this obligation seriously. For eg. many companies in their annual reports include data on their Environmental, Health and Safety performance for the year but fail to demonstrate through financial commitment on any new pro-active initiatives they will take-up in meeting their corporate social responsibility.

Most of the data reported on is 'rear vision'lag performance indicators such as environmental and Health and Safety incident performance with little information on the pro-active management programs that they have either implemented or will be implementing.

Many financial institutions such as WestPac have now established managed funds for companies who meet certain criteria in meeting their corporate social responsibilites. There is establsihed set criteria which is independently measured and reported on. Various elements are included with performance critreia such as their environmental performance, community based programs, health and safety performance, product safety, management systems etc.

I would be interested on how Telstra have establsihed a corporate governance framework on corporate responsibility and how this is measured. I would also be interested on whether Telstra have had any independent audits on how they are meeting their corporate responsibilities and how this is benchmarked against other corporations.

While I congratulate Telstra in opening debate on this topic, it would be interesting to see how Telstra compare to other corporations through independent assessment on corporate social responsibilty.

Telstra CSR Manager, Yvonne McKay, advises: Telstra's CSR perfomance has been benchmarked in several independent indices, including:

The Corporate Responsibility Index (www.corporate-responsibility.com.au) carried out in Australia by the St James Ethics Centre and audited by Ernst and Young. Our result for the 2003/04 financial year was 90.21 percent, placing Telstra sixth out of 26 participating companies.

Telstra is included in the FTSE4Good Global 100 Index (www.ftse.com) run by the UK-based FTSE Group,which measures the performance of companies that meet corporate responsibility standards, to facilitate investment in those companies.

Kudos to Telestra for spuring a debate into CSR. In our work as pollsters tracking the societal views around the expectations of companies across 25 countries (including Australia) over the past 6 years, we have identified two significant trends:

(1) growing expectations for companies to be more responsible and at the same time,

(2) decreasing perceived performance ratings for companies in the area of CSR. [Source: CSR Monitor]

What is the appropriate response for a company like Telestra to end this "expectation-performance" gap that exists in the minds of consumers?

Well, clearly, in addition to best in class performance operationally and a commitment to transparency and making a positive contribution, it apperas that companies may have an obligation to also communicate their CSR efforts more broadly than they have been doing to date. Does Telestra feel comfortable with the notion that communicatng its CSR commitments is also a CSR responsibility? Best, Chris Coulter GlobeScan Incorporated