Knee-deep in blood - AMP feeds directors to baying crowd

Financial giant AMP was wading knee-deep in blood on Tuesday as three more directors fell on their swords in the wake of damning revelations at the royal commission, including repeatedly lying to the regulator, deliberately ripping off customers and doctoring an “independent report”.

But unlike the usual blood spills which happen privately behind closed doors with shareholders politely warning boards of a protest vote if they don’t step down, this played out in full technicolour.

Directors learned of their fate earlier today when votes came in that Holly Kramer had a protest vote against her re-election of more than 60 per cent, while Vanessa Wallace received more than 50 per cent of the protest vote.

It is a historical moment for shareholders and boards. For a top 20 company to attract such a high protest vote against directors is unprecedented.

But these are not normal times. Corporate Australia has breached Australia’s trust and investors feel frustrated.

In AMP’s case it has handled the situation poorly since it first appeared at the royal commission in early May. Since being caught out lying and cheating and covering up, the board has been in crisis, opting to drip feed one body after another in the hope it would pacify the baying crowd.

It didn’t work. It is why a third, and longest serving, director, Patty Akiopantz, decided to jump before she was pushed.

For women on boards it is a momentous day as it means in the past few weeks the AMP board has lost, or is about to lose, four female directors. A week ago the chairman Catherine Brenner agreed to leave the board after her role in the changing of a so-called “independent report” commissioned by AMP for the regulator.

But the debate shouldn’t be about male or female – it should be about suitability, and in AMP’s case they all need to go as soon as possible.

The brutal reality is all current board members were present when AMP allegedly misled ASIC. Given that’s the case, why did only the women go?

Andrew Harmos, who joined the AMP board in June 2017 is a member of its audit and risk committees and was up for re-election this year.

All gone: Patty Akopiantz, Vanessa Wallace and Holly Kramer.

He received a big protest vote, but it wasn’t enough for him to leave. It is believed to be less than 50 per cent, but not much. Harmos isn’t a newbie to AMP as he has been on AMP Life board since August 2013.

Other men who remain on the board include Trevor Matthews, who joined in May 2014 and is on the audit and risk committees, Geoff Roberts, who joined in July 2016, Peter Varghese, who joined in 2016 and Mike Wilkins, who joined in 2016 and is currently interim chairman and acting chief executive.

How he can do this massive job plus sit on the board of a company the size of QBE, which has plenty of its own issues, is something that needs to be addressed.

Once the spotlight turns off the board, management will be next. The chief executive was the first to leave, followed by the chief legal counsel but a lot more heads need to roll and a proper strategy put in place to deal with the myriad conflicts this company has unsuccessfully been juggling for decades.