AMP board can’t lie straight

For many company boards it’s a case of why tell the truth, the whole truth and nothing but the truth when you can do the opposite.

AMP outgoing CEO Francesco De Ferrari. Picture Britta Campion/The Australian

Why do they keep doing it?

Company boards being at least ‘economical with the truth’ if not outright lying to their shareholders and to the market generally?

On March 25, media reports broke that AMP’s CEO - Francesco De Ferrari - was resigning. One stated that he was resigning “today”.

In response – I presume - the ASX announced that trading in AMP shares would be temporarily paused “pending a further announcement”.

Did AMP request it? Did the ASX act on its own initiative? A further announcement on WHAT?

Who knows; why would either of them tell you. After all, to the ASX and company boards YOU are all mushrooms.

Three hours later – THREE HOURS – we got all of one sentence from the AMP.

“AMP Ltd notes the media reports today and confirms that Francesco De Ferrari remains the chief executive officer of the group”.

That seems like a pretty straightforward if not exactly resounding denial; it was certainly an ABSOLUTE denial that he “was”, by that evening, “had” resigned “today”.

Yet bizarrely and inexplicably – in the literal sense that it was not explained – next morning March 26 we got EXACTLY the same “trading pause” announcement from the ASX.

Trading in AMP “temporarily paused” pending “further announcement”.

This time it took AMP only six minutes to respond, “confirming” that there’d been “no change” to the CEO position and that De Ferrari “has not resigned”.

AMP CEO Francesco De Ferrari. Picture: Britta Campion/The Australian

However this time, the AMP statement added that the board and De Ferrari were “working together and constructively discussing” the “future strategy and leadership of the group”.

You might read that as a polite way of saying the CEO was not long for the desk at which the buck supposedly– correction, the big bucks – stop.

But why not just say that? It did NOT say, straight out and clear that WAS happening.

Yet less than a week later AMP announces not only that De Ferrari would “retire”, but also that the board had already appointed a new CEO, and who had already resigned from her job at the ANZ – Alexis George.

Are we supposed to believe all this happened since March 26? That only AFTER the board denied that De Ferrari was going, that it decided to “facilitate” his “retirement”; initiate the search for a successor; and wrap it all up, in less than a week?

I remind you that it’s now five months since the board of AusPost – surely a subject for anthropological study as there’s not a spine between the eight of them – allowed the prime minister to sack its CEO and it STILL does not have a replacement.

The plain fact is that the AMP board must have already effectively secured the appointment of its new CEO – or at the very least, embarked on appointing a new CEO - when it made those statements to the ASX last week.

Why not just share the truth with shareholders and the market, rather than instinctively seek to constructively deceive them, as especially the first statement did?

It’s all too common among the “best” of company boards. Why tell the truth, the whole truth and nothing but the truth when you can do the opposite.

At least the ‘Golden Hullo” given to George to persuade her to take the job is sensibly structured.

She gets $4m, but none of it is upfront and it only goes to her, and staggered over three years, if AMP meets certain performance levels.

Contrast that with the $13.4m ‘Golden Hullo” given by NAB to then-wunderkind Ahmed Fahour way back in 2004 when he signed on – and not even as CEO, but as head of the (main) Aus biz of the bank.

Those were the days: pre-GFC, pre-virus, and pre-Hayne.

Originally published as AMP board can’t lie straight