AMP is standing by its recently appointed funds management CEO despite a barrage of ‘me-too’ criticism across the Tasman – and beyond.
Boe Pahari, who officially replaced Adam Tindall as AMP Capital chief early in July, has come under fire after it emerged he was subject to a sexual harassment claim from a now-former employee in 2017.
Based in London at the time, an external investigation found Pahari had breached company standards.
In a statement, an AMP spokesperson said: “The external investigation identified lower level breaches of AMP’s code of conduct for which Mr Pahari had appropriate consequences imposed, including a financial penalty and counselling for his conduct.
“Mr Pahari accepted the findings and apologised to the colleague.”
But, regardless, his appointment sparked some internal dissent, a raft of Australian press coverage and wider questions around AMP governance
In an article penned last week for the influential US business magazine, Forbes, Kristin Ferguson, Australian leadership expert, said the Pahari issue highlights how companies must adapt in a “post #MeToo world”.
“… some senior leaders are learning the hard way that the world has changed once and for all as employees rise up against corporate platitudes that are not followed by meaningful action,” Ferguson says.
The outrage also raises an interesting dilemma for AMP Capital funds that invest according to environmental, social and governance (ESG) protocols.
An AMP spokesperson said the group does not generally discuss individual stocks it holds.
However, the spokesperson said the AMP Capital Sustainable Share Fund has not made any changes to its exclusions during recent reviews. Currently, the firm’s Ethical Leaders Fund does not hold AMP stock, the spokesperson said, but it is not formally excluded.
“The ethics committee will continue to monitor the situation,” the spokesperson said.
While the issue missed mainstream coverage in NZ press, it is understood some local investors were seeking further information from AMP Capital.
The Pahari controversy would be an unwelcome distraction for an AMP just emerging from two years of post Royal Commission deconstruction and corporate rebuilding. At the end of June, AMP finally offloaded its historical life insurance business, adding A$1.1 billion in capital and clearing the way for the new, more-focused strategy set out by chief, Francesco De Ferrari.
With a share price still dwindling under $2 (A$1.71 at close last week), the group could be an attractive takeover target. Indeed, industry whispers suggest some tyre-kicking could be under way with Macquarie mooted as an interested party.
In other governance-related news last week, the Simplicity Charitable Trust, which owns the underlying $1.8 billion KiwiSaver scheme, confirmed foundation board member, Michelle Boag, has stepped down as director.
Boag, a long-time National Party operative and PR impresario, was found to have released private information revealing the identities of COVID-19 cases in NZ.
Simplicity trust chair, Peter Neilson, a former Labour Party cabinet minister, said in a release: “Under the circumstances, it was the right thing to do for Michelle to offer to resign, and the right thing to do to accept it.”
Sam Stubbs, Simplicity founder, said Boag was instrumental in establishing the mainly passive KiwiSaver and investment business, first registered in 2015. Simplicity moved to a charitable ownership structure in 2016 with Boag joining the board the following year.
“Simplicity now has 60 volunteers, and as a foundation Trustee of our charity, Michelle was one of the first,” he said. “She has been a huge supporter, and we wouldn’t be where we are today without her input.”
Boag has also cut all ties with National Party organisation in the wake of the scandal.