Risks remain despite AMP overhaul

  • By AB+F Editorial

The executive and board overhaul of AMP highlights the governance challenges as well as key person risk for the business, according to S&P. 

Off the back of institutional investor concerns and relentless media reporting on lapses of governance, AMP moved to finally overhaul its executive and board.

On Monday, AMP announced that its chair David Murray would step down from the board. 

In light of Murray’s resignation, John Fraser has also decided to resign as a non-executive director on the AMP board and chair and non-executive director on AMP Capital. 

AMP Capital CEO Boe Pahari was demoted from CEO. He will now return to his previous job of running the fund manager’s infrastructure equity business.

Deb Hazelton will take on the job as chair of AMP while CEO Francesco De Ferrari will in the interim lead the AMP Capital business. 

Hazelton joined AMP’s board in 2019 and is a member of the remuneration, audit, nomination and risk committees. 

“In our view, the changes highlight governance challenges as well as potential dependency on key individuals within the group,” S&P analyst Nico DeLange said. 

“We will continue to monitor the degree to which these challenges may disrupt the overall strategic direction of the group as well as the group's ability to effectively execute its strategy,” DeLange added.

S&P’s assessment will not affect its rating of the bank. 

Most of AMP’s businesses are on S&P’s CreditWatch. 

“We expect to resolve the CreditWatch placements within the next three months when we get clarity on the final financial profile of the wealth and investment management operations, including debt and EBITDA estimates.”