Sabra Lane: The deepening crisis for the embattled wealth manager, AMP, is raising questions over the extent of bad governance and controls across the entire financial services sector. The resignations of its chairman, Catherine Brenner, yesterday, and its chief executive, follow damaging revelations at the Banking Royal Commission about alleged criminal behaviour at the top of AMP. So, is AMP the tip of the iceberg? What can be done to weed out more unethical and unlawful practises?
Angus Armour is the chief executive of the Australian Institute of Company Directors and he's speaking here with our senior business correspondent Peter Ryan.
Angus Armour: I think the board had to reflect very seriously, as a whole, on the reputation and their confidence in the community. So, obviously, stakeholders were deeply concerned with what they were hearing, and the board, which is ultimately accountable for the culture and performance of the organisation, had to react seriously.
Peter Ryan: But Catherine Brenner wasn't alone in the AMP boardroom. It was on her watch, but other directors were also there. Should they be resigning, as well, if there's evidence that they've breached directors’ duties?
AA: I don't think we're at the stage of evidence. I think we're at the point of the board saying, with their investment community, "Look, we need to have some group of us to carry this forward. Do we have your confidence to carry this forward?"
PR: But, on the face of it, is there reason to be concerned, given some of the allegations that have been made at the Royal Commission against AMP executives and the board?
AA: Well, certainly the special council to the commission has made some very serious findings to the commissioner that are a concern, that are suggesting to the commissioner he needs to take this forward to another process. So, I'm sure the board is very focused on that.
PR: Catherine Brenner is also on the boards of Boral and Coca Cola Amatil. Does she need to consider her positions there, as well, because of what's happened at AMP?
AA: I don't know Catherine, I haven't spoken with Catherine. I imagine she is reflecting on her involvement as a director in the community, broadly.
PR: AMP is battling to restore investor confidence ahead of next week's annual general meeting, which could be pretty hostile. Two board members, Holly Kramer and Vanessa Wallace, might struggle to be elected. Surely, though, shareholders have a right to be angry about this self-inflicted damage?
AA: Oh, I'm sure the shareholders are feeling very disappointed at this point, given the performance of the stock. The emotions are pretty high, right now, Peter.
PR: The AICD is committed to excellence in governance on company boards – that's what it says on your website. So, has the AMP board lived up to that code?
AA: The board is certainly in the process of taking accountability for how AMP has performed through this process. I think there's still some challenges that they're reflecting on, in terms of transparency and timeliness. Those are some of the issues that really cropped up during the testimony in the Royal Commission.
PR: But, on the face of it, do you condemn the behaviour at AMP, given what appears to be – or at least the possibility – that there's been a breach of that code, in terms of maintaining boardroom excellence?
AA: Look, I'm very concerned by it, Peter. I think at the point the commissioner issues findings and recommendations, and if those recommendations include further proceedings, then we'll be in an adversarial process where people can argue each side of the equation. We allow for individuals to defend themselves, but are we deeply concerned about it? Yes we are.
PR: But, as an educator of company directors, is AMP now a case study on how not to run a board?
AA: There's no question that there'll be lessons from the AMP that will filter into our course materials.