Market disclosure and communications policies

Telecom's Market Disclosure Policy governs communications with shareholders and other stakeholders. Telecom is committed to providing comprehensive continuous disclosure to shareholders and other stakeholders, and complying with the listing rules of the stock exchanges on which Telecom is listed.

Telecom requires certain senior people (the CEO, CFO, group general counsel and company secretary and the general manager capital markets) and, in some cases, the chairman, to discuss whether information is material prior to its release.

Telecom has appointed a disclosure officer (currently the general manager capital markets) who, together with the group general counsel and company secretary, is responsible for ensuring that all material information is lodged, as soon as practicable, simultaneously with the NZX, ASX and NYSE.

The disclosure officer ensures that such information is published on Telecom's website where appropriate, with further dissemination through broadcast emails to news agencies and other market commentators. Disclosure practices are monitored by the Disclosure Officer.

Telecom has also appointed certain executives as authorised spokespeople who are required to ensure that all proposed public comments contain information already in the public domain or information which is not material. Management is responsible for ensuring compliance with the policy.

Telecom's website, contains media releases, quarterly financial information, current and past annual reports, dividend histories, notices of meeting, a list of shareholders' frequently asked questions and other information about the Company.

Telecom shareholders can contact the board directly using the dedicated email address: telecomboard@telecom.co.nz.

Telecom webcasts its investor and analyst briefings over its website where appropriate.

Full participation of shareholders at the annual meeting is encouraged. Telecom will be webcasting its 2011 annual meeting live. Shareholders will have the opportunity to submit questions prior to each meeting and will be given the opportunity to ask questions of the chairman, directors and auditors during the meeting. The webcast will be archived on the Telecom website after the meeting along with a copy of the minutes of the meeting.

Diversity at Telecom

Telecom believes that building diversity of thought across the organisation will deliver enhanced business performance. Diverse backgrounds, experience and perspectives are critical to build a leading edge business and to deliver for our customers. Telecom is committed to attracting, recruiting, developing, promoting and retaining a diverse group of talented individuals who will help drive Telecom's business performance.

For FY12, the board has set the following measurable objectives for achieving greater diversity at Telecom:

• Establishing initiatives for increasing gender diversity to increase the proportion of women in senior leadership roles;
• Monitoring recruitment processes to ensure effectiveness in sourcing candidates from a wide talent pool; and
• Assessing Telecom's current levels of diversity, identifying where gaps exist and recommending further initiatives to address these gaps

The current proportion of women at various levels within the Telecom workforce is set out in figure 1 below.

Telecom Female Percentage of Workforce

Figure 1: Percentage of Telecom Workforce who are female.

The board is responsible for approving the measurable objectives developed by Telecom's senior managers and the Human Resources and Compensation Committee and conducting annual assessments of the measurable objectives and progress made towards achieving them. The committee is responsible for recommending measurable objectives to the board and reporting on progress against those objectives. These responsibilities are set out in the respective board and committee charters.

Current initiatives towards greater diversity at Telecom include:

• The Global Women (Women in Leadership) Programme - Telecom is a foundation partner, and currently has three senior leaders in the inaugural intake of 16;
• A focus on the Leadership Development Programme and Accelerate (a programme to identify, develop and retain high potential leaders with the potential to be promoted to general manager and executive level roles) to ensure a strong pipeline of diverse future leaders; and
• Progressive flexible working policies that encourage employees to propose flexible working arrangements that suit their individual circumstances, such as child or relative care.