Former Union Boss Joins BT Openreach Board Amid Breakup Pressure

New members have been appointed to BT’s recently formed Openreach board, which is charged with overseeing the strategic vision and service delivery for the firm.

The new board members include Sir Brendan Barber, former General Secretary of the Trades Union Congress (TUC) and current chair of the employment relations service Acas, and Edward Astle, a former Board member of National Grid.

The new appointees come amid intense debate about the future of Openreach, and BT is citing the creation of the newly formed board as further evidence it is delivering on its commitment to establish a more independent Openreach. Rivals want a full structural break-up of Openreach from BT.

Independent Members

The two men bring expertise in employee relations and regulatory compliance, and will help board chairman Mike McTighe to make Openreach a more transparent and autonomous business. Indeed, BT says the reorganisation programme will create increased operational and management independence.

The inaugural meeting of the Openreach Board took place on 31 January, and a fourth independent non-executive is due to be appointed imminently, with a specific focus on customer service.

“Openreach’s network and connectivity underpins Britain’s digital economy and we know that our customers have very high expectations of us,” said Mike McTighe, Chairman of Openreach.

“I understand that customers sometimes feel let down by Openreach because we haven’t always delivered the service they expect or that we hope to provide,” McTighe added. “We have made a lot of progress since Clive Selley joined as CEO a year ago – for example on halving the number of missed appointments, making our fibre network available to millions more people and accelerating our plan to introduce a new generation of ultrafast technology.

“But we need to do more to re-build trust and credibility. This will be the Board’s focus and we are currently in consultation with BT Group about agreeing the plan to deliver better service, broader coverage and faster speeds for consumers and businesses across the country.

“We are determined to meet our customers’ expectations and to strengthen the autonomy, governance and transparency of Openreach to facilitate the delivery of better outcomes for everyone who has a stake in our business.”

But how exactly will the board help CEO Selley deliver a more independent organisation? Well BT points out that the board will have an independent majority whose appointments have been discussed with Ofcom.

The Board itself is responsible for setting Openreach’s strategy and overseeing its performance. This includes ensuring it “treats all customers equally whilst investing in better service, broader coverage and faster broadband speeds for the entire UK.”

The other board members consist of chief executive Clive Selley, CFO Clare Sadlier, and Simon Lowth, BT Group Finance Director. They will all report to the Openreach Chairman.

And in an effort to further strengthen governance, Openreach will establish committees needed to operate to the highest standards of corporate governance. In particular, a new Openreach Board Audit, Risk and Compliance Committee (OBARCC) will be established, to hold the business to account and regularly hear representations from customers.

Separation Pressure

BT Openreach is currently in a state of flux after industry regulator Ofcom last July declared that  Openreach should be a separate company from BT with its own board, brand and CEO, appointed independently of its parent.

Ofcom hopes this will make Openreach capable of making investment decisions for the benefit of the 500 hundred communication providers (CPs) that use the network – not just BT’s retail unit.

The Ofcom plan disappointed rivals, who had been calling for Openreach to be made a fully separate legal entity.

Ofcom for its part has made clear that this course of action has not been taken off the table.

BT and Ofcom however remain locked in discussions in an effort to find a voluntary compromise.

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