Boe Pahari has stepped down from the role of AMP Capital CEO and will resume work at his previous level with a focus on AMP Capital’s infrastructure equity business, while Mr De Ferrari will assume direct leadership of AMP Capital until a replacement can be found. The decision has been welcomed by the Australian Council of Superannuation Investors (ACSI), who said it was an important step towards resetting company culture.
“The company must now get on with [the] job of rebuilding public confidence, and in particular, the trust of their staff,” said ACSI CEO Louise Davidson.
“Investors will be continuing to engage with AMP to understand how these decisions were made and how the company intends to strengthen company culture. Clearly AMP’s initial response to community, staff, and shareholder concerns around the appointment of Pahari and the treatment of sexual harassment was inadequate.”
David Murray will also step down as chairman of the board, with Debra Hazelton taking up the role, while non-executive director John Fraser will step down from the board of AMP Limited and as chairman of AMP Capital. Mr Murray went down swinging, saying he still believed the matter had been “dealt with appropriately” in 2017 and that Mr Pahari had been penalised accordingly.
“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,” Mr Murray said.
The changes will go some way towards clearing the path for Mr De Ferrari to finally execute a reversal of the wealth giant’s fortunes, which have been pummeled by the royal commission, a lack of focus in its business model, and the shock departure of wealth division CEO Alex Wade.
“The transformation of AMP I think when I joined was called ‘the most challenging corporate transformation in corporate Australia’,” Mr De Ferrari told media during an AMP earnings call.
“I was very clear from the beginning, this does not happen overnight… there’s a lot of really hard execution work that needs me to deliver, which doesn’t show up in results on day one. It takes time, there’s always a lag. It’s about really staying focused on the strategy.”
But the problems posed by Mr Pahari might not have ended with his demotion.
By returning Mr Pahari to his previous position, AMP gets to have its cake and eat it too, ending a slew of bad publicity while retaining one of its key dealmakers. But AMP is still facing off against Mr Pahari’s accuser, Julia Szlakowski, and is poised to release the independent report on the matter – a report that Ms Szlakowski and her lawyer believe doesn’t communicate the gravity of Mr Pahari’s actions. It probably isn’t the last time AMP will face tough questions over Mr Pahari, and shareholders will no doubt be interested in why he kept his job.
It’s clear that AMP wants to put the incident behind it – but as Mr De Ferrari looks towards the future, he’ll have to be careful that the past doesn’t come back to haunt him.
