Three more directors have left the board in the wake of AMP’s dreadful appearances at the bank and financial services royal commission.
The decision made by directors Vanessa Wallace and Holly Kramer to not seek re-election, and Patty Akopiantz to step down at the end of this year, is geared at lessening investor backlash at the annual general meeting this Thursday.
The big institutional investors had been working on a protest vote against the board after claims of criminal misconduct, that include misleading the corporate regulator ASIC, surfaced at the commission.
Wallace and Kramer were two of three directors who were up for a re-election vote. A third director, Andrew Harmos, is also looking for re-election, but only joined the board in June.
AMP said Akopiantz — who is the longest-serving director — recognised the need for a dignified process of board renewal, and offered to step down for the position and would only serve until the of end 2018.
There has been a huge price to pay from the fall-out from the commission’s inquiry into the fees-for-no-service scandal. It has already cost chair Catherine Brenner, chief executive officer Craig Meller and chief legal counsel Brian Salter their jobs.
Action needed: AMP
AMP interim executive chairman Mike Wilkins graciously thanked the three directors for their service, but said boardroom renewal was of utmost importance.
“Our shareholders are demanding board accountability and need to know that meaningful change is underway,” said Wilkins.
Wilkins said the trio were very capable directors who had made valuable contributions and brought a great measure of diversity of thought and experience to the organization.
“They have listened to and acted on the feedback from our investors,” he said.
The latest round of departures means that five of the 11 directors who fronted investors at the AGM last year would need to be replaced.
More questions that need answers
Despite the spate of resignations, and the enlistment of the highly qualified former Commonwealth Bank chief David Murray to lead a reshaped board, AMP is still up against a backlash from its owners at the AGM.
Big superannuation funds and fund managers controlling more than 30% of the AGM were set to vote down at least two of the directors as well as the company’s remuneration report.
The remuneration report on executive pay is almost assured of defeat.
Such a vote would represent the “first strike” against the firm. A second strike the following year would force a spill of all boardroom positions.
The Australian Council of Superannuation Investors — proxy advisor to the powerful industry super funds such as AustralianSuper, Cbus and REST — lauded the development, but said there were many more questions the board needs to provide answers for.
“ACSI welcomes AMP’s belated acknowledgment that greater board accountability and renewal is necessary in response to revelations about poor governance practices at the banking royal commission,” ASCI chief executive Louise Davidson said.
“We look forward to hearing more from the company about why these particular directors and not others have resigned.”