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AMP’s leadership is in meltdown: Here’s what’s happened

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 (AAP Image/Joel Carrett)
(AAP Image/Joel Carrett)

Financial services giant AMP has lost three of its most senior leaders on Monday.

AMP chairman David Murray has resigned from the board of directors, and AMP Capital chief Boe Pahari has also stepped down from his role.

Following Murray’s resignation, AMP non-executive board director John Fraser has also chosen to resign.

AMP faced backlash after promoting Pahari to the role of CEO of its Capital arm in July, despite a former sexual harassment allegation levelled against him by a subordinate in 2018.

An AFR investigation revealed that the woman, a senior private equity specialist, had to contact external lawyers to resolve her harassment claim after AMP’s HR arm failed to internally address her concerns after an independent review.

According to an external investigation into the matter, Pahari was found to have breached company standards, and consequently paid a financial penalty, received counselling for his conduct and has apologised to the colleagues.

“I genuinely regret that my comments made a colleague feel uncomfortable,” Pahari said. “It was never my intention, but I accept that they had an impact and I apologised and accepted the consequences.

“I have learned from the matter and have applied those learnings in trying to ensure that our employees feel safe and valued at work. I am embarrassed by the matter as I believe in building diverse teams and respecting all individuals I work with, both within and outside our business.”

At the time, AMP Limited CEO Francesco De Ferrari said Pahari had shown “genuine remorse” for his comments.

De Ferrari will now assume direct leadership of the AMP Capital business on an interim basis, until a new CEO is found.

In a statement, AMP explicitly stated that the leadership changes were directly linked to the outrage over Pahari’s July promotion.

Outgoing chairman Murray said AMP had to operate under Francesco De Ferrari with the support of investors, clients and staff “without distractions”.

“The Board has made it clear that it has always treated the complaint against Mr Pahari seriously. My view remains that it was dealt with appropriately in 2017 and Mr Pahari was penalised accordingly,” Murray said.

“However, it is clear to me that, although there is considerable support for our strategy, some shareholders did not consider Mr Pahari’s promotion to AMP Capital CEO to be appropriate.

“Although the Board’s decision on the appointment was unanimous, my decision to leave reflects my role and accountability as Chairman of the Board and the need to protect continuity of management, the strategy and, to the extent possible, the Board.”

However, Pahari isn’t leaving the company – he’s returning to a role at his previous level, focusing on the company’s infrastructure equity business.

Replacing Murray is AMP and AMP Capital board member Debra Hazelton, who is also a member of multiple committees at the financial institution.

Hazelton holds more than 30 years’ experience in financial services across the world, including as CEO of Muziho Bank in Australia and CBA in Japan.

She specialises in fixed interest, treasury, institutional banking, risk management and financial markets, and also sits on the board of several organisations.

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The All Markets Summit returns on Thursday 17 September 2020.
The All Markets Summit returns on Thursday 17 September 2020.
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