The powerful Australian Council of Superannuation Investors said AMP’s response to concerns about sexual harassment had been “inadequate”.

“The original unanimous decision by the board to promote Mr Pahari and the subsequent handling of this issue reveals serious governance and cultural issues at the highest levels of the company,” Ms Blakey told The Australian Financial Review.
She said it was concerning that the intervention of shareholders and threat of an extraordinary general meeting were required before “appropriate board accountability” and a backdown on the Pahari promotion occurred.
David Murray and John Fraser resigned from the AMP board. Boe Pahari stood down as AMP Capital CEO, to return to his prior role. Supplied
Louise Davidson of the powerful Australian Council of Superannuation Investors, who engaged directly with the AMP board on multiple occasions to express members’ concerns, agreed the company’s initial response to the scandal in standing by the promotion had been “inadequate”.
“The company must now get on with job of rebuilding public confidence, and in particular, the trust of their staff,” Ms Davison said. “Investors will be continuing to engage with AMP to understand how these decisions were made and how the company intends to strengthen company culture.”
One of AMPs most vocal critics Merlon Capital portfolio manager Hamish Carlisle said it was too early to say whether the changes – which include keeping Mr Pahari on the payroll – will be enough but conceded they were a step in the right direction.
The perception is that this is a big issue and perception is reality in financial services. To the extent it impacts their ability to attract and retain talent and attract and retain clients its a big issue regardless of your moral or ethical position, Mr Carlisle said.
We strongly advocated for the removal of David Murray at the AGM so from our perspective its too late. The governance failings since the AGM have been material at a number of levels including failure to seek approval for the renegotiated AMP Life sale.
Mr Carlisle was among the 12.7 per cent of shareholders who voted against the re-election of Mr Murray at the 2019 annual general meeting. He said given the large number of investors on the register who appoint proxies, the no vote actually represented the majority of active shareholders.
However, he also said Merlon continues to see value in AMP. Shares in the company gained 0.8 per cent to $1.44 on Monday but have lost 60 per cent of their value during Mr Murray’s tenure.
Simon Mawhinney, chief investment officer of fund manager Allan Gray, which holds almost 7 per cent of AMP, was more supportive of the move. Change was needed. AMPs actions on this matter have now been decisive and we would like to give the company the latitude to execute on their stated strategy and cultural journey, he said.
A spokeswoman for influential investment consultancy JANA said AMP Capital’s products remain “on watch”, meaning super funds and financial advisers are advised against about placing new money with the embattled wealth management group.
Research house S&P Global Ratings said most of its ratings on AMP entities remain “on CreditWatch with negative implications”. Rather than welcome the move, S&P analyst Nico DeLange said the executive and board changes are evidence that AMP faces “governance challenges” and “risks on the downside”.