AMP chair Catherine Brenner steps down

Catherine Brenner resigns as chair and AMP company secretary Brian Salter will depart after bank inquiry revelations.

AMP has announced Catherine Brenner has resigned as chairman and will step down from the board in the wake of damaging revelations in the banking royal commission.

As flagged by The Weekend Australian, Mike Wilkins has been appointed as executive chairman, effective immediately, while a new chairman, an additional new non-executive director, and a new chief executive, are found.

AMP (AMP) also said group general counsel and company secretary Brian Salter would leave the company and his “outstanding deferred remuneration will be forfeited as a result of the board exercising its discretion”.

In other announcements, AMP directors will take a 25 per cent pay cut, while the company said Ms Brenner “was unaware” of changes made to a controversial, much-reviewed Clayton Utz report into wrongdoing at AMP, including on charging fees for no service.

It said Ms Brenner, former CEO Craig Meller and other directors “did not act inappropriately in relation to the preparation of the Clayton Utz report”.

However AMP was “disappointed” about Mr Salter’s involvement in the report, which went through 25 drafts.

AMP shares, which have been in a freefall since the company’s testimony at the royal commission, opened stronger but quickly reversed and were down a further 0.3 per cent to $4.01 by 10.30am (AEST).

Today’s developments come after the board of AMP held a crisis meeting last night to discuss Ms Brenner’s grip on the $660,000-a-year chairmanship.

A “disappointed” Ms Brenner said today she was accountable for governance at AMP and her resignation was “a step towards restoring the trust and confidence” in the company.

AMP has been under intense pressure since the banking royal commission’s counsel alleged the financial services giant committed crimes by lying to the corporate regulator over a scandal in which it charged customers for services they never received.

AMP also announced today that in recognition of “collective governance accountability” for the issues raised in the royal commission, the board would reduce fees for all director by 25 per cent for the remainder of the 2018 calendar year.

It added: “The employment and remuneration consequences for the individuals within the business responsible for the fee-for-no service issue will be determined on finalisation of an ongoing external employment review, which is expected to complete shortly.”

Ms Brenner is the second senior AMP scalp claimed by the commission, following the early exit of CEO Mr Meller on April 20.

Shocking evidence of misconduct has hit finance sector stocks, with AMP shares leading the way down with a tumble of almost 16 per cent over two weeks, slashing more than $2bn from the market value of the company.

The shake-up at AMP follows Friday’s royal commission hearing at which counsel assisting Rowena Orr QC asked commissioner Kenneth Hayne to decide that the big four banks — ANZ, Commonwealth Bank, NAB and Westpac — had committed misconduct, on top of finding crimes were committed by AMP.

Ms Orr told the commission it should be open to finding that in four of the 20 times AMP misled ASIC over a fee-for-no-­service scandal, it breached four sections of the Corporations Act that carry criminal penalties, attracting a fine of up to $180,000, and one section of the Australian Securities and Investments Commission Act.

AMP said today it had received legal advice in relation to issued raised by the royal commission concerning the preparation of Clayton Utz’s report on fee-for-no-service issues.

“Having considered and assessed the matters, the board is satisfied that the former chairman Catherine Brenner, former chief executive officer Craig Meller and the other directors did not act inappropriately in relation to the preparation of the Clayton Utz report.

“The board, including the former chairman, were unaware of and disappointed about the number of drafts and the extent of the group general counsel’s interaction with Clayton Utz during the preparation of the report.

“The board commissioned and received the report. It was not a matter for the board’s approval.”

AMP general counsel and company secretary Brian Salter will leave the company. Pic: Hollie Adams

Ms Brenner said in a statement this morning she was honoured to have been chairman of AMP, but added: “I am deeply disappointed by the issues at hand and am particularly concerned for the impact they have had on our customers, employees, advisers and shareholders.

“As chairman, I am accountable for governance. I have always sought to act in the best interests of the company and have been in discussions with the board about the most appropriate course of action, including my resignation.

“The board has now accepted my resignation as chairman as a step towards restoring the trust and confidence in AMP.”

The new executive chairman, Mr Wilkins, said AMP would now begin a process of board renewal, including fast-tracking selection of a chairman, and a new director.

“This process will help ensure stability and further strengthen governance.”

Mr Wilkins said AMP was treating revelations in the royal commission “extremely seriously”.

“Appropriate steps are being taken to address the issues raised, and remediating our customers is being given utmost priority.

“On behalf of the board, I reiterate our sincerest apology to our customers, and know we have significant work to do to rebuild their trust.”

AMP said it will be making a formal submission to the royal commission by Friday, May 4, in response to the closing submissions last on Friday.

Last Friday, in a scathing indictment of AMP’s culture, Ms Orr pointed the finger of blame at the board and senior management, including Mr Salter, but stopped short of asking Mr Hayne to find any company officers committed the offences, which carry jail terms of up to five years.

“The senior management and executives who contributed to the misleading of ASIC over the two-year period had knowledge of the extent and nature of the conduct and were warned by junior staff about it being a breach, but continued with a misleading narrative to ASIC,” Ms Orr said.

AMP head of financial advice Jack Regan admitted to the royal commission that the company had misled ASIC no fewer than 20 times over the “fee for no service” scandal.

Evidence before the commission also suggested AMP executives put heavy pressure on Clayton Utz, which was compiling an independent report on AMP’s wrongdoing, to downplay the role in the debacle of former advice boss Rob Caprioli and remove Mr Meller’s name from the final document.

It heard Clayton Utz gave AMP 25 drafts of the report, removing Mr Meller’s name so that it would not “attract unnecessary attention to him by ASIC” before at the last moment, inserting a paragraph that exonerated him.

“Having regard to changes made to the report, there is a reasonable basis for concluding that AMP, by one or more of its senior employees or officers, knew that the representation that the report and the findings made within it were entirely independent was materially incorrect,” Ms Orr said.