AMP ignored prophet Karin Halliday in chase for profits

Rewarding executives for chasing short-term profits at the expense of long-term stability was dangerous, an AMP executive warned.

AMP Capital senior manager of corporate governance Karin Halliday.

A senior AMP executive last year urged companies to focus on creating a culture that “attracts the best employees”, while avoiding pay structures that rewarded executives for pursuing short-term profits at the expense of long-term stability.

AMP Capital senior manager of corporate governance Karin Halliday made the comments in September last year, ahead of the annual meeting season where AMP would vote its shares as an investor in other companies.

“Companies need to focus on creating a culture that attracts the best employees and creates an environment that enables employees to contribute their best,” Ms Halliday said. “Rewarding executives for pursuing short-term profits at the expense of long-term stability can be dangerous.”

At a board meeting last Thursday, AMP sacked its already ­departing chief executive Craig Meller with immediate effect and sent its group counsel, Brian Salter, on leave after extraordinary revelations at the financial ser­vices royal commission.

The commission heard the company had billed clients without providing the relevant service and then misled the Australian Sec­urities & Investments Commission 20 times when the watchdog started an investigation.

An “independent” report on the fees-for-no-service scandal by law firm Clayton Utz was also workshopped 25 times with AMP before a final version was sent to ASIC.

AMP will make a submission to the royal commission on the debacle, where it will address the claimed independence of the Clayton Utz report.

A senior executive told The Australian he found Ms Halliday’s comments “slightly ironic” given recent events.

“I have to say to be grilled by the AMP team, particularly at times based on poor analysis and understanding of annual reports, it seems they should have been looking a little closer to home,” said the executive, who asked not to be named.

The royal commission will this week complete its hearings on the $4.6 billion-a-year financial advice industry after last month’s opening round on consumer lending.

The first witness today on the continuing topic of inappropriate financial advice will be AMP head of advice compliance Sarah Britt. The commission will then turn its attention to improper conduct by financial advisers.

National Australia Bank chief customer officer, consumer and wealth, Andrew Hagger, who has been overseeing an advice remediation program since he took up the position in August 2016, will be the most senior bank executive to appear as a witness at the commission so far.

ANZ Bank will also be in commissioner Ken Hayne’s crosshairs over improper conduct.