New AMP chairman Mike Wilkins’ early priorities

From finding a new CEO to stopping a major exodus of super fund members, Mike Wilkins has a number of urgent tasks.

Mike Wilkins has a number of pressing priorities as new AMP chairman. Picture: John Feder.

AMP is fortunate to have a person with the calibre of Mike Wilkins to take on the chairmanship. But, apart from finding a new chief executive, Wilkins has a number of very urgent tasks.

The first is to try and stop a major exodus of AMP superannuation fund members. While that task must be spearheaded by a the new CEO, Wilkins must try and make sure there is not too much damage in the interim. It will not be easy because there is deep community distrust and Wilkins has a lot of other tasks.

Secondly, he needs to fully understand the toxic culture on the AMP board that led to Simon McKeon stepping down as chairman in 2016. Wilkins joined AMP after McKeon had left and was not part of the coup.

McKeon, like everyone, will have had his faults but he was strong on governance and detail and I think it is highly unlikely that the AMP would have been in this position had McKeon remained chairman. It was a serious board mistake, which every AMP director at that time must live with.

Wilkins needs to understand how the poison that forced McKeon out infected the board and make sure it does not destroy his time as chairman. Now is the time for a skilled board surgery to eliminate that toxic culture given its devastating role on the once-great company.

In particular the days of non-AMP directors playing a role in AMP appointments must stop.

Longer term there is a challenge that will face both the new CEO and the board.

The AMP has lost the trust of the community and that must be restored.

In years gone by the company’s sales commission structure served it well but net returns after commissions are becoming more important so it needs to change. The AMP is not alone in facing this problem — groups like MLC and Colonial now owned by NAB and Commonwealth banks also have this challenge.

Today’s “insurance salesman” is the financial planner. Unfortunately it’s hard to get people to pay for financial planners in the same way as they pay accountants, so charges and commissions are embedded in many products.

The royal commission is likely to change that model and AMP must be part of that change.

As I have written before the “new AMP” must establish a new set of values and promote those values throughout the land, not just in Sydney.