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AMP makes top-level changes amid allegations

AMP has announced a new chairman and AMP Capital chief executive as the company grapples with allegations of sexual harassment. 

Monday, August 24th 2020, 11:23AM 3 Comments

David Murray has resigned as AMP chairman and has stepped down from the board. Debra Hazelton has been appointed as his replacement, effective immediately.

In addition, Boe Pahari will step down as AMP Capital chief executive, effective immediately. Pahari will resume work at his previous level with a focus on AMP Capital’s infrastructure equity business.

AMP Limited chief executive Francesco De Ferrari will assume direct leadership of the AMP Capital business on an interim basis while a search process is conducted for a new CEO of AMP Capital.

John Fraser has also decided to resign as a non-executive director on the AMP Limited Board and as chairman and non-executive director on the AMP Capital Holdings Limited Board.

AMP said the changes respond to feedback expressed by some major shareholders regarding the appointment of Pahari as chief executive from July 1.

Pahari was promoted to lead AMP Capital despite having been penalised $500,000 for having reportedly broken the code of conduct after sexual harassment complaints were made by a subordinate.

“AMP needs to continue its transformation under chief executive Francesco De Ferrari with the support and confidence of its investors, institutional clients, employees, partners and clients, without distractions,” Murray said.

“The board has made it clear that it has always treated the complaint against Pahari seriously. My view remains that it was dealt with appropriately in 2017 and Pahari was penalised accordingly. However, it is clear to me that, although there is considerable support for our strategy, some shareholders did not consider Pahari’s promotion to AMP Capital chief executive 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.”

Hazelton said: “On behalf of the board, I would like to acknowledge David Murray’s leadership of the AMP Board over the past two years as the business has tackled critical and highly complex challenges in AMP's transformation programme. We would like to thank both David and John for their professionalism, dedication and commitment to AMP.

“Under my leadership, the board will focus on working with Francesco and his leadership team to deliver long term value for our shareholders and clients by executing the transformation strategy. I am determined to restore the trust and confidence of our clients, shareholders and employees.”

Tags: AMP AMP Capital

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Comments from our readers

On 25 August 2020 at 10:30 am Pragmatic said:
Good riddance to David Murray: arguably the architect of Australia's vertical integration model for wealth management that was so actively challenged throughout the Haynes Commission hearings.

What a sad way for John Fraser to end an otherwise illustrious career in the industry.

I'm unsure what possessed the AMP Board to believe that the actions of Boe Pahari were worthy of continuing his employment. Perhaps all of this demonstrates that the culture within AMP remains broken (as identified in the Royal Commission).

Either way, this is text book stuff for future graduates to study "how to take a reasonable business and destroy it within a decade"
On 26 August 2020 at 10:38 am Backstage said:
What an excellent sum up Pragmatic. An excellent case study that includes ingredients like, ego, politics, myopia and arrogance. It is also a very unfortunate story overall. Shareholders are now dictating and questioning given the amount of behavior and conduct that has been hidden and accepted by management.
On 27 August 2020 at 1:37 pm Amused said:
Very well said Pragmatic. You should copyright "how to take a reasonable business and destroy it within a decade" as this would be the perfect title for a book on AMP. 160 year history as a financial services company ruined now in only a short space of time due to poor management appointments and extreme corporate arrogance. Hard as it is to believe this book will not be a work of fiction.

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