Retiring Telstra chairman John Mullen has used his final address to shareholders to say that Australian corporate governance has become too complex and bureaucratic.
"The average large company board today spends an ever-increasing time on governance and less on strategy and performance," Mr Mullen said at the Melbourne Convention and Exhibition Centre on Tuesday.
Mr Mullen is stepping down at the conclusion of the meeting after 15 years on Telstra's board, the last seven as chairman.
There had been "extraordinary changes" in that decade and a half with respect to company sector governance, regulation and the general environment, mostly for the better, he said.
"Overall business is better, more ethical and better regulated than it has ever been."
But there had also been unintended consequences, such as a short-sighted focus on executive remuneration that made it difficult to motivate and reward executives for their hard work in challenging times, Mr Mullen said.
It had also become too difficult to pay directors all or part of their compensation in shares, even though it obviously aligns shareholders' and directors' interest, he said.
These trends were to the benefit of the public company structure and private equity had been the beneficiary, Mr Mullen said.
"Private companies perhaps have a far better balance between strategy and performance versus governance, decision making processes are shortened, risk taking is encouraged, investing for the longer term not just the next half's result is paramount, and the remuneration process is greatly simplified," he said.
Private capital was not such as significant player 15 years ago, but that had completely reversed, he said.
More and more talented executives and directors didn't want the public scrutiny and hassle so preferred to work in private equity.
"There is a lot that we can learn from private equity and private capital in how to make companies leaner, faster and more efficient."
Mr Mullen also defended supporting the failed Indigenous voice referendum with $1 million of advertising spent promoting the 'Yes' campaign.
Telstra strongly believed reconciliation was a positive step forward for the nation and the economy, and therefore for Telstra, but it also respected the referendum result, he said.
He copped criticism from a number of shareholders over the issue, with one accusing the company of trying to "curry favour with the government", something Mr Mullen disputed.
Telstra CEO Vicki Brady told shareholders that most of Telstra's business divisions were performing well, including its flagship mobiles business, but aspects of its enterprise fixed business were experiencing headwinds.
Mr Mullen also acknowledged that Telstra had been having issues with the performance of its retail stores after transitioning from third-party ownership to being wholly owned by the company.
Some were consistent with the broader retail industry that was struggling to attract qualified personnel in a tight labour market, but others were of Telstra's own making, he admitted.
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