BT’s new Openreach board plans 'to rebuild trust and credibility'

The UK’s last-mile wholesale operator Openreach has had its first board meeting since its owner, BT, agreed to set one up in a concession to the regulator, Ofcom.

BT announced the chairman, Mike McTighe, in November 2016. Now the company has appointed two further independent directors and confirmed that Openreach’s senior management and BT’s CFO will also be board members.

“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,” said McTighe.

Ofcom is still reviewing Openreach’s long-term relationship with BT and its CEO, Sharon White, may still tell the group that Openreach has to be hived off as an independent company. It is still a 100% subsidiary of BT – something emphasised by the reporting lines in today’s announcement from the company after yesterday’s inaugural meeting.

However, the announcement has already come under fire from the very regulator that it was meant to appease.

In a statement, Ofcom said it will continue with plans to approach the European Commission about how to deal with BT and Openreach.

A spokesperson for Ofcom said: "These changes fall short of our requirements for a legally separate Openreach that delivers for all of its customers. We intend to take our plans to the European Commission later this year."

Clive Selley, CEO of Openreach, is a member of the board, reporting to McTighe as chairman but also to BT’s CEO, Gavin Patterson, “on issues relating to BT’s responsibilities as a publicly listed company”.

Clare Sadlier, CFO of Openreach, is also on the board – the only woman along with the five men so far announced. But so is her opposite number as CFO on the BT group board, Simon Lowth, who thus has a view of BT’s investment plans for retail and global services as well as Openreach’s investment strategy.

Two new independent directors have been announced, and there is one vacancy. One of them, Edward Astle, has experience of the telecoms industry – he was executive director of global business at Cable & Wireless for eight years until 1997. He was later chairman of National Grid Wireless until it was acquired by transmitter operator Arqiva in 2007.

The other independent non-executive director is Brendan Barber, former general secretary of the UK’s labour union confederation, the Trade Union Congress.

Now that Openreach has its own board, the focus will be “to re-build trust and credibility”, said McTighe. “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.”

Openreach’s board will set up an audit, risk and compliance committee that “will hold the business to account and regularly hear representations from customers, as well as conducting an annual review of Openreach compliance and publish its findings”, said an Openreach statement. It will run in parallel to BT’s existing Equality of Access Board, of which Astle is also a member.