AMP’s David Murray must go to save face, renew trust at wealth manager

AMP Chairman David Murray. Picture: Britta Campion / The Australian

AMP is considering whether to release the report by UK barrister Andrew Burns into Boe Pahari’s harassment of former staffer Julia Szlakowski.

Szlakowski has called for its release and within the inner sanctum of AMP the pros and cons are being worked through.

This comes as shareholders express their anger at the mismanagement of the entire process with 5 per cent shareholder Allan Gray the latest to go on the record against the board.

Shareholders have urged the release of the Burns report for a matter of weeks to no avail.

“Given the continued lack of transparency from AMP, it is difficult to know whether AMP’s cultural and moral compass is on a sustainable footing,” fund manager Simon Mawhinney said.

“The board appears to be tone deaf to the cultural issues at play. It is very hard for us to envisage an outcome, assuming the allegations are true, where a person like this could earn the trust, confidence and respect of colleagues, clients and shareholders. Without this, leadership is significantly weakened and, in this case, probably untenable,” he added

Board guru Graeme Samuel who was on the APRA review of CBA in 2018 noted “under the leadership of Catherine Livingstone and Matt Comyn, the recommendations were put in by the bank in a matter of months”.

“That leadership is not evident at the AMP,” he added.

Samuel recalled ASIC chief James Shipton had urged all company boards to review the APRA report and apply it to themselves.

“AMP would appear to have not followed his advice,” Samuel said.

The bottom line for AMP is that as a wealth manager, its business is based on consumer trust.

Boe Pahari. Picture: Britta Campion

Recent events have gone close to destroying AMP’s credibility from the sting of royal commission allegations, including fees for no service and inappropriate advice, to the latest scandals around the departure of Alex Wade and Boe Pahari.

Worse is a statement in early 2019. The company released a statement saying how it had turned the corner trumpeting the appointment of chief Francesco de Ferrari as chief, Alex Wade as the head of Australia and David Murray as chair.

Wade has now resigned in disgrace and De Ferrari’s and Murray’s judgment looks faulty at best.

The release of the Burns report would at least put the whole thing in the open with a balanced view from a respected barrister.

The trouble is, Murray and the board are some of only a few people to have actually seen the report which they used as a basis to fine Pahari for his behaviour and then promote him.

Pahari has long been on the inclusion and social diversity council that was touted in the media, but the “revelation” simply highlights the staff campaign against the board and Pahari.

The cleanest solution would be for his resignation, but that would probably not come cheaply.

Murray told shareholders earlier this week he was shocked at the lack of respect for authority with AMP, which tells you something about where he is coming from.

The board is clearly living on a different planet to the rest of the market.

Quite clearly his position is now up in the air.

Ironically enough, he confided when appointing De Ferrari to the job in 2018 that his former Credit Suisse colleague was AMP’s last best hope.

AMP CEO Francesco De Ferrari. Picture: Britta Campion / The Australian

Cultural change starts from the top and the AMP board’s past actions mean someone must fall on his or her sword and Murray would be an appropriate start.

AMP needs to get back to restoring trust in the organisation and events in the past two years have gone close to destroying that.

What benefit left in the brand is worth saving and building back to its past glory.

The board must show justice being done and that would start with the release of the Pahari affair report, followed by accountability from the top down.