AMP starts sweeping conduct review with two consulting firms on deck

Francesco De Ferrari has vowed there is not a systemic misconduct issue at the wealth group, despite recent scandals.

AMP CEO Francesco De Ferrari. Picture: Britta Campion

AMP chief executive Francesco De Ferrari has vowed there is not a systemic misconduct issue at the wealth group, despite it enduring several scandals and highlighting a number of areas for cultural improvement.

Appearing before a House of Representatives committee Mr De Ferrari faced fierce questioning about AMP’s culture given the exit of Australia boss Alex Wade last month and the demotion of executive Boe Pahari over inappropriate conduct.

“Where harassment occurs — including sexual harassment — I am determined to take action and address the problem. Misconduct of any kind is not acceptable at AMP,” Mr De Ferrari said on Thursday.

“Based on the data I have seen, I do not believe misconduct is systemic within our business. However, I am committed to driving a program of initiatives to build a more diverse, inclusive and respectful culture.”

Mr De Ferrari was referring to data taken from monthly surveys of staff that he said showed AMP’s issues were not dissimilar to those faced by other large organisations.

“Clearly the issues that you see in the press are very distressing and clearly not acceptable, but I really don’t believe they are reflective of our wider culture at AMP,” he said.

“I don’t believe AMP is significantly different from a lot of issues that are present in a lot of large corporates.”

Mr De Ferrari was responding to questions from committee chair and Liberal member Tim Wilson who asked: “What the hell is going on over at AMP?”

Mr Wilson argued the cultural issues were linked to sexual harassment incidents but were also a feature of the Hayne royal commission in 2018, when AMP was in hot water over compliance shortcomings and charging customers fees when no services were provided.

AMP has been rocked over the past two months by controversy about the conduct of two executives, that ended up claiming the jobs of former chairman David Murray and board member John Fraser. Debra Hazelton took the reins as chairman late last month.

The investor backlash against AMP followed the promotion of Mr Pahari to lead AMP Capital mid-year, despite a 2017 sexual harassment complaint against him that led to a $500,000 penalty. Mr Pahari has since been demoted, with that decision following the departure of Mr Wade over conduct issues, including sending lewd photos to a female employee.

Mr De Ferrari apologised to former AMP employee Julia Szlakowski who made a complaint against Mr Pahari in 2017, for “the distressed caused” from the events.

“We believe that fair and due process was followed at the time,” he said, in relation to the investigation conducted in 2017.

Ms Szlakowski and her lawyers made part of her complaint against Mr Pahari public last month, piling the pressure on AMP .

She outlined that Mr Pahari extended her London hotel booking without permission, made calls and texts in the early hours of the morning after a night out, and referred to his “limp dick” when she declined to use his credit card to buy clothing.

Asked why he had hired Mr Wade to join AMP, Mr De Ferrari said his former Credit Suisse colleague had “a lot of relevant” experience in wealth management both in Australia and the Asia region. He noted that the appointment went through AMP’s standard process for a key executive.

Mr De Ferrari admitted AMP needed to do more to lift its culture and governance, citing data that showed 75 per cent of AMP’s staff felt safe at work compared to a global benchmark of 82 per cent.

AMP has tapped two consulting firms to help improve its battered culture and undertake a “comprehensive conduct review”.

The Australian revealed on Wednesday that AMP had hired consultants from Oliver Wyman to assist the board’s culture working group.

In a statement on Thursday, AMP confirmed that appointment and said it had also tapped global inclusion and diversity consultancy Symmetra, to undertake the comprehensive review.

“The review will objectively assess conduct at AMP, and make recommendations covering policies, leadership, governance and behaviours. Symmetra will then work with AMP to implement and embed the recommended changes,” the AMP statement said.

Oliver Wyman will support the board culture working group, to “formalise the shared beliefs of the board, providing a framework for systems and expectations driving culture, governance and strategy”.

But the measures follow a spate of employee departures already at AMP Capital – the infrastructure, real estate and equities unit – across Australia and New Zealand, and the board conducting a strategic review of the company and its units that may lead to a sale or break-up.

Symmetra’s website says the firm was founded in 2003 as Diversity Consulting by Heather Price, in post-apartheid South Africa. After relocating to Sydney, she built out a team of consultants headquartered in Pyrmont.

The website highlights customers that have included Citigroup, National Australia Bank, Visa, Scentre Group and Unilever.

Mr De Ferrari said the initiatives were an “important investment” in the wealth group’s staff that would help create a better culture.

Last month, Mr De Ferrari singled out improving the group’s culture as his top priority in the final months of 2020.

Thursday’s AMP statement said Symmetra would also deliver “an inclusive leadership program” beginning in October.

Ms Hazelton said: “The board and I acknowledge the critical need to create a more diverse, inclusive and safe workplace.”

The latest initiatives at AMP add to an established inclusion task-force, chaired by Mr De Ferrari and comprising employee representatives, and the setting up of an integrity office.

Mr De Ferrari was also quizzed by committee members over its decision to cut financial planner numbers, and continue to charge fees to rollover accounts that were awaiting compensation where the customer could not be located. The accounts have since transferred to Resolution Life as part of the sale of AMP’s life insurance division.

On the early release of superannuation due to COVID-19, AMP had processed more than 192,000 requests as at August 30.