Telecom's board could swell from seven to nine directors if shareholders vote in favour of a United States hedge fund's two candidates later this week.
Elliott International holds a 3% stake in Telecom, and has been lobbying shareholders to support Mark Tume and Mark Cross.
Telecom has responded by putting forward its preferred candidates - marketing guru Kevin Roberts and existing director Rob McGeoch.
Telecom says it does not expect to return to growth until 2011 as it adapts to a new regulatory regime.
Elliott International has been vocal about its dissatisfaction with Telecom's share price and governance.
As a shareholder, the fund's move to nominate its own candidates is considered bold, and some doubt it will succeed.
The chairman of the New Zealand Shareholders Association, Bruce Sheppard, says he doubts the votes will be in favour of Elliott's candidates.
He says most of the main advisers to institutions are telling their clients to reject Mr Tume and Mr Cross.
Mr Sheppard says the association wants investors to support the Telecom board's recommended candidates.
He says the association's view is that the governance of Telecom is fine, Wayne Boyd is a good chairman, the board is appropriately sized and appears to have necessary skills.
One institutional shareholder doubts Elliott's bid will succeed but says it will send a message to the board that investors are unhappy with its governance.
Mr Cross says he believes he and Mr Tume will bring important expertise to Telecom's board.
The annual meeting is being held in Wellington on Thursday.