Institutional investors urged to keep up the pressure on AMP

Governance Institute of Australia is urging institutional investors to keep up the pressure on AMP to ensure that its new leadership — including incoming Chairman David Murray, acting Chief Executive Officer Michael Wilkins, a new Chief Executive Officer and incoming directors — set about the daunting task of a vigorous renewal of governance and risk management practices.

The revelations about AMP made by the Hayne Royal Commission have severely damaged the reputation of the once-venerable company. Now directors are facing the anger of their shareholders at today’s AGM, and doing so with a board suddenly shrunken. Shareholder anger has resulted in a strike against the remuneration report and the strong protest vote against Andrew Harmos.

“While this renewal of the board is a step in the right direction, as far as the institutional investors are concerned, it is also a problem”, says Governance Institute Chief Executive Steven Burrell. “Shareholders are sending the strongest signal possible to those remaining at AMP of the size of the challenges they are facing. AMP needs to go back to the fundamentals of good governance — accountability, transparency, integrity, stewardship and risk management—”, he added.

“AMP is facing every imaginable challenge. It is in desperate need of governance restructuring and cultural renewal, as well as specialised skills in crisis management and reputation repair”, said Mr Burrell.

Many institutional investors have strong commitments to only hold shares in companies that demonstrate good governance, including board diversity. AMP will find these skills in the diverse pool of talented and experienced professionals seeking directorships.

“AMP has an opportunity, in this crisis, to establish world-class governance and risk management practices and rebuild their corporate culture, with an appropriately diverse board”, Mr Burrell said.

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Media contact: media@governanceinstitute.com.au