Former AMP chair Simon McKeon breaks silence on financial services royal commission

Former AMP chair breaks silence on the Hayne royal commission, saying the industry is now “making up for the sins of many years”.

Former AMP chair Simon McKeon. Picture: Stuart McEvoy.

Former AMP chairman Simon McKeon has broken his silence over the immense damage done to the company in the wake of the Hayne royal commission.

Speaking about the issue for the first time on Thursday, Mr McKeon described his sadness at the massive damage done to the financial services giant’s brand and its market capitalisation and share price, as well as the damage done to the broader financial services sector.

At the KPMG Couta boat races in the Victorian seaside town of Sorrento, Mr McKeon said he wasn’t surprised by the rapid damage done to AMP’s share price and brand. But he “desperately hoped” the once respected AMP could salvage its brand and reputation.

“My reason for having said very little about AMP basically rests on a hope that it can turn itself around in very, very positive way. I’m now just an outside commentator,” he said. “I don’t want to be seen as a past chairman who is just adding to the criticism that has been given to it by the royal commission and many others,’’ Mr McKeon said.

Mr McKeon, who shocked the markets in 2016 when he stepped down as AMP chairman after only three years on the board, said the nature and process of a royal commission meant the outcome was often huge reputational damage to companies and tarnished brands; something the public witnessed last year as the royal commission heard submissions.

During 2018, AMP was beset by scandals that surfaced at the royal commission. The fallout included a massive plunge in its share price to record lows and a clean-out of its boardroom which included the departure of directors including chairman Catherine Brenner.

“Look, first I’m really sad,” Mr McKeon said.

“I was only with AMP for three years, I think two as chair. But I didn’t take it lightly. It was one of our great and oldest institutions,” he said.

“Was I shocked at the rapidity with which it all fell apart? Well, in many respects no, because while I couldn’t have predicted a royal commission three years ago - in fact I thought it was quite unlikely - at the end of the day that’s what royal commissions do,’’ Mr McKeon told The Australian on Thursday.

Royal commissions carried different consequences to matters pursued through the courts, he said.

“It’s not litigation. You go into a royal commission and you are not protected by 500 years of the development of litigation rules. You are actually typically asked by the commission several weeks before you go into the box to ‘tell us your worst’, and they have very extensive powers.

“And then you know that on the day that you are in the (witness) box what you sent them some weeks before is going to come back to you.’’

Mr McKeon said he hoped AMP’s brand could be salvaged.

‘’I really desperately hope so, because my experience with AMP was one where I saw inside that organisation many wonderful people really trying hard.

“Sure there’s some stuff we now know that no one could ever be proud of. But basically for many people still there trying their damnedest to do the right thing. And certainly when I was chair we brought in some very, very significant increases in educational standards for financial planners, which coincidently only came into affect two days ago, on New Year’s Day.’’

Reflecting on the lunch being held next door at the Sorrento sailing club, which is in one of Victoria’s most expensive, and the exclusive surrounding suburbs where many richlisters have their multimillion-dollar holiday homes, Mr McKeon said the royal commission had lessons for all companies, not just financial services businesses like AMP.

“I don’t think it applies to only AMP, it apples to a whole bunch of other brands that have been, at the least, tarnished as a result

“It is far, far broader than the financial sector. It is the importance of brands in corporate life generally.

We have whole bunch of captains of industry next door who are having a great time. I sure hope that for every hour that they spend in a place like this, they are also going down to Woolworths in Rosebud - which is very different to Sorrento - and actually just listening to how their brands are really received by the great community that is Australia.”

Mr McKeon said if key reforms to financial services were introduced 20 or 30 years ago, and not just in recent years, the sector might have come out of the royal commission in a stronger position.

‘’If they would have come in, not two to three years ago, but 10 years ago, 20 years ago … We are making up for the sins of many years that have gone passed.’’