From insurance to telcos, new chief poised to ring in changes

THE clearest signal Andy Penn will lead a new Telstra came when a moderator called for questions during an ­analysts’ conference call.

Unlike predecessor David Thodey, Andy Penn, above, will inherit a Telstra that’s well run and secure about its place in the world. Picture: Stuart McEvoy

THE clearest signal yesterday that Andy Penn will lead a new Telstra came when a moderator called for questions during an ­analysts’ conference call.

A single voice responded with a query about Penn’s 100-day plan, which the CEO-elect ­sensibly batted away by pointing out chief executive David Thodey would remain in the job until May 1. Silence then ensued. Even ­unflappable chairman Catherine Livingstone looked taken aback.

Is this really the same company that strategised war games against Canberra, and then took it to the next level and did it for real, that had so many identity crises it lost sight of its core business, and so alienated customers with appalling levels of service that only complete exhaustion stopped them defecting en masse?

Unlike Thodey, Penn, 51, will inherit a company that’s stable, well run and secure about its place in the world.

There’s no confusion about whether Telstra is a legacy telco, a media player that just owns the pipes to pump the content, or generates the content as well.

Once upon a time, the possibilities were endless, but Penn is very clear about Telstra’s purpose.

“It’s a company that connects people to the things that they love and the people that they love,” Penn tells The Weekend ­Australian.

“The world has moved on very significantly from a technology point of view. If you look at how people use their mobile phones today, or their tablets, it’s for watching media, going online, ­answering emails.

“We’re in a connected world, and that creates tremendous opportunities for Telstra.”

Penn is no telco industry veteran — far from it.

Three years ago, he reinvented himself, succeeding John Stanhope as Telstra’s chief financial officer after a career in financial services at Axa Asia Pacific.

The CFO position marked a return to full-time executive life, with Penn having taken a 12-month break at the conclusion of the $14.6 billion takeover of Axa by AMP and Axa’s French parent in March  2011.

Armed with a $17 million termination cheque, the career life insurance executive enjoyed his sabbatical, travelling widely, spending time with his family, going fly fishing and visiting local indigenous communities.

It was a break well earned — Penn had been instrumental in transforming Axa’s presence in Asia from a $50m beachhead into a business valued at $10bn in the takeover.

In one year alone, he reportedly travelled to Paris 17 times to visit the parent.

Asia had its challenges, as well.

While Penn and ANZ Bank boss Mike Smith are the only two local executives to build ­businesses of serious scale in the region, the CEO-elect has said such an exercise involves a huge investment of passive time.

For example, in the lead-up to signing a memorandum of understanding in Thailand, Penn said he visited the country 27 times.

It was in the latter years at Axa, around 2005, that he faced the gut-wrenching prospect of his career coming to a premature end, as ­prudential regulator APRA moved to disqualify him from acting as a trustee.

APRA targeted Penn and others for the way they changed the method of calculating interest on member benefits in the staff superannuation fund.

The decision itself was not the problem, but rather the way it was handled and communicated.

For more than a year, Penn was effectively in legal limbo as he fought the charge he was not a “fit and proper person” — his prospects for succeeding then-­Axa CEO Les Owen hanging in the balance.

Total vindication came in 2007, when the Administrative Appeals Tribunal ruled against APRA, ­enabling Penn to be reinstated as head of the Axa’s Australian ­business and ultimately succeed Owen.

Then-Axa chairman Rick ­Allert lashed out at the “mammoth” cost of the regulator’s ­action, saying Axa had spent close to $20m defending the directors of the super fund.

“And I think that one of the distressing things is that, if we hadn’t actually backed the directors, they wouldn’t have had the wherewithal to defend themselves — and they would have lost their ­careers and livelihoods,” Allert said at the time.

Almost a decade has passed since Penn’s entanglement with APRA, and he has since moved on to another industry entirely.

The Telstra board would no doubt have done their own due diligence on Penn’s past.

In promoting him to CEO-elect, the directors have clearly ­determined, as have many others, that he is an executive of the ­utmost integrity.

Penn is equivocal when asked about the APRA experience.

“One of the benefits of having had a very long career is that I’ve had lots of experiences along the way, and they’re all things that you can draw on along the way as you take on new challenges and new opportunities,” he says.

“I just mark them down as learning experiences and that’s ­always been a strong feature of my life.

“I love to continue to challenge myself and I love to continue to learn, so this is a fantastic ­opportunity for me to fulfil that ­aspiration.”