Incoming AMP chairman David Murray is urging angry investors to trust him to restore the wealth manager’s battered reputation but warns the challenge will take “a long time”.
- David Murray warns restoring AMP’s reputation might take years
- He declined to comment on claims AMP had committed a criminal offence
- Mr Murray has not held directorships on boards of listed companies before
The former Commonwealth Bank chief executive and Future Fund chairman accepts many shareholders are furious ahead of Thursday’s annual general meeting but is pushing back against a protest vote that might unseat three AMP directors.
“The institutions are angry with what has happened, understandably. I think if they’re really angry and they want to vent that anger they could fire three people,” Mr Murray told AM.
“Their only other alternative is to have confidence, leave it to us to sort it out in some more orderly manner because all of the board is determined that change has to happen.
“Serious investors have to consider whether anger is in itself a good enough frame of mind to make decisions. They have to decide whether they want anger to prevail or they’re confident that I can make the appropriate changes over time.”
Investor advisory firm CGI Glass Lewis and the Australian Shareholders Association have urged shareholders to vote against the re-election of AMP directors Holly Kramer and Vanessa Wallace who have been with the AMP board since June 2016.
Mr Murray, who chaired the Federal Government’s inquiry into the financial system, was appointed AMP chairman on Friday and will start on or before July 1.
He replaces Catherine Brenner who was forced to resign a week ago and chief executive Craig Meller who quit after the financial services royal commission heard AMP had lied to the Australian Securities and Investments Commission (ASIC) and charged clients for services they did not receive.
Mr Murray says he took on what is now the toughest job in corporate Australia because of AMP’s importance as a pillar in Australia’s financial system.
“It will be hard to rebuild but the issue for me in taking on this role is that all of the major pillars of the financial sector have to make improvements if the Australian community is going to have confidence in the financial sector,” Mr Murray said.
Mr Murray warned restoring AMP’s trashed reputation with investors, regulations and the Federal Government might take years.
“It will take a long time because a breach of trust in the financial services system is a serious issue,” Mr Murray said.
Mr Murray said AMP was not alone in being outed for unethical and unlawful behaviour but had suffered by being one of the royal commission’s key focuses.
“What struck me was that across various institutions there were issues that were to do with outright fraud, which unfortunately you get on an ongoing basis and in any industry, and they need to be dealt with harshly,” Mr Murray said.
“With AMP, the issue is more to do with not dealing with a regulator in forthright manner, and I don’t think that’s as easy to excuse.”
Mr Murray said it was good that AMP had faced up to its mistakes honestly and had shown with the resignations of Catherine Brenner and Craig Meller, while not agreeing that their positions had been untenable.
“I’m just saying that the company in losing its chairman and chief executive has faced up to the situation in a very realistic way already,” Mr Murray said.
Mr Murray would not comment on claims in the royal commission by senior counsel assisting Rowena Orr QC that AMP had committed a criminal offence in misleading ASIC and tampering with a supposedly independent report to the regulator.
Mr Murray said AMP had to counter community perceptions about the amendments to the paper by former Ms Brenner and sacked chief legal counsel Brian Salter.
“The problem they have and others have is that those documents are by necessity of a very legal nature and sometimes that doesn’t cut it in the day-to-day community understanding,” Mr Murray said.
Mr Murray — who until now has not held directorships on the boards of listed companies — also confirmed he did not immediately accept the offer to become AMP’s emergency chairman.
“Some people make the comment, ‘Why on earth would you ever join a board of a bank or a financial services group in Australia?’,” Mr Murray said.
Speaking generally, Mr Murray said some boards had been naive in thinking a “one size fits all” corporate governance approach had worked in the past.
He signalled that would be part of the change as he works to turn around AMP.
More on AMP at the Banking Royal Commission
Follow Peter Ryan on Twitter @peter_f_ryan.