‘Kidding yourself’: Why Optus’ ‘more troubling’ woes won’t end with CEO’s exit

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When Optus CEO Kelly Bayer Rosmarin was asked on Friday whether a report that she was considering standing down following this month's massive network failure and last year's data breach, there were three long seconds of silence.

"I haven't seen any reports today," Bayer Rosmarin eventually told the Senate inquiry.

Now, everyone's seen the reports, with the Optus boss handing in her resignation yesterday to look after the "best interest" of the company.

READ MORE: Why Optus CEO Kelly Rosmarin resigned

Optus CEO Kelly Bayer Rosmarin during a Senate hearing


But if the embattled telco thinks the change of leadership will solve its ills, it's in for a shock almost as rude as waking up with no phone service.

"You'd be kidding yourself if you thought that that was the end of the problem," Swinburne University corporate governance expert Helen Bird told 9news.com.au.

"Because what the Senate hearing revealed and what was very clear was that apart from the poor handling of the fallout of the outage, apart from the fact that customers didn't know what was going on, the second and frankly more troubling issue was that they didn't really have any effective management of this potential disaster.

"They had not tested, planned for, or considered in any really deep way the possibility of a national outage of the kind that occurred…

"There are really big questions for this company about its risk management systems, how robust they are.

"And I think, in turn, a question mark over the way in which the company is run, not just in terms of the CEO but higher than that."

READ MORE: Optus outage impacts residents in Melbourne's west

Bird isn't the only one who thinks the CEO reset won't pick the Optus brand out of the doldrums.

"The CEO leaving, that's not the answer," Jules Hall, CEO of The Hallway advertising agency, told 9news.com.au.

"But that is the first step on the road to recovery. The business has to address the issues that led to the resignation."

READ MORE: How to get your free data from Optus

Optus suffered a major data breach in 2022.

Hall said there was no silver bullet for the telco, which will now have to painstakingly regain the Australian public's trust.

"That's not about saying things, it's about doing things," he said.

"And it starts with making sure they've played the war games to scenario plan for outages so triple zero calls can get through it.

"Make sure that you've got the security systems in place so there aren't major data breaches…

"Most brands don't need to talk about those levels of detail because it's assumed – we assume Telstra has done all that stuff, we assume Vodafone's done all that stuff.

"When you get called out and you get exposed by not having that in place, then you've got to take a couple of steps backwards, and you've got to demonstrate you are doing those things to build that trust back."

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Customers line up outside an Optus shop fron

As for Bayer Rosmarin's replacement, there are benefits to bringing in someone external or promoting from within.

"I can make the case for both," Hall said.

"But I think there is there is there is a good argument for bringing in fresh eyes, fresh thinking at this point in time.

"I'm sure there's some amazing contenders internally and it may be they're actually better qualified because they know the ins and outs of how everything gets done or doesn't get done.

"That'd be the counter-argument."

But while the next CEO is important for Optus to get right, Bird said the telco's internal systems are what need more attention.

"Certainly you can tell from the Senate hearing how important that role is," she said.

"But these roles wouldn't be needed quite so much if you had proper systems in place, so you better manage crises, so you weren't hauled before the Senate to explain yourself.

"You can replace your CEO and that's absolutely fine, but you would be shortchanging yourself if you thought that was enough."

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Optus CEO Kelly Bayer Rosmarin and Lambo Kanagaratnam, Optus, Managing Director, Networks, during a Senate hearing

Call for government to act

As a private rather than publicly listed company, Optus hasn't had to worry about shareholder backlash for the data breach/network failure double-whammy, although it is naturally concerned about retaining disgruntled customers.

But it has no legal obligation to disclose crucial governance measures – such as risk management policies – despite the crucial role it plays in public life.

That role was made painfully apparent when more than 200 triple zero calls failed, and other healthcare services were disrupted, during the outage, and should be the spark for the federal government to act, according to Bird.

"The government, through its appropriate regulator, should insist on there being proper governance as part of the requirements of holding the (communications carrier) licence," she said.

"It's extraordinary to me that what is absolutely essential for banking – they have to report to APRA – what is essential for, say, the ASX – they have to report to the Reserve Bank and ASIC – seems not to be required of a company providing a critical service."