Pressure on AMP board intensifies

There is growing opposition by shareholder organisations to the proposed re-election of directors at next month’s annual meeting.

Pressure on the besieged AMP board has ramped up, with growing opposition by influential shareholder organisations to the proposed re-election of directors at next month’s annual meeting.

The Australian Shareholders’ Association, on behalf of retail investors, has joined with proxy adviser CGI Glass Lewis in recommending a “no” vote against the re-election of Holly Kramer and Vanessa Wallace.

The Australian Council of Superannuation Investors, which has 38 members with $2.2 trillion under management, said yesterday it had discussed its view with AMP that the board should be more accountable for the fees-for-no-service scandal.

“AMP has not changed its position, so we will be putting out our advice to members that they vote against the re-election of the three AMP directors and against the remuneration report,” ACSI chief executive Louise Davidson said.

The decision, she said, reflected the accountability of the board, not the individual directors.

Ms Davidson said ACSI didn’t have a “definitive view” on whether AMP chair Catherine Brenner should step down. AMP has been under siege since early last week, when the financial services royal commission heard that the company had tried to cover up its fee-for-no-service scandal by lying to the Australian Securities & Investments Commission.

A so-called “independent” report on the scandal by the law firm Clayton Utz was workshopped 25 times with AMP executives, including Ms Brenner and group legal counsel Brian Salter, himself a former Clayton Utz partner.

The company has apologised unreservedly for the misconduct and failures in the regulatory disclosures by its advice business.

Chief executive Craig Meller, who was due to step down by the end of this year, left immediately after a board meeting last Thursday, with Mr Salter sent on leave.

AMP board member and former IAG chief executive Mike Wilkins has taken over as acting CEO. The ASA, which is undecided on the re-election of Andrew Harmos because he only joined the board last June, castigated Ms Brenner, saying she should resign immediately or step down pending an independent investigation because her position was ­“untenable”.

“At the same time AMP must urgently appoint some additional, well-credentialed, untainted people to the board, irrespective of the voting results,” the ASA said.

While the ASA acknowledged Mr Wilkins’ skills and experience, it noted he had been a non-executive director, on the company’s audit and risk committees since September 2016 and chair of the risk committee since May 2017.

He would therefore have had “some knowledge” of the past issues raised at the royal commission and the board’s alleged involvement with the so-called independent report by Clayton Utz.

In a reversal of its position earlier this week, CGI Glass Lewis said it now opposed all three AMP directors, while continuing to support the remuneration report.

Despite these moves, CGI Glass Lewis said it found the board’s actions and response “deeply concerning and unsatisfactory”. “Whilst we find the underlying systemic practice of fee-for-no-service concerning, we are particularly troubled by the evidence that the company provided false or misleading statements to the corporate regulator, and that the chair and senior executives influenced the content of a purportedly independent review of the practice,” the proxy adviser said in a report. “Additionally, the advice culture and compliance committee’s explicit decision not to correct misleading statements made to certain customers affected by the fee-for-no-service practice contradicts the company’s stated cultural values of integrity, help and performance.”