AMP directors quit to head off shareholder revolt

iStock
  • Three non-executive directors have announced their resignations.
  • Vanessa Wallace and Holly Kramer will step down ahead of this Thursday’s AGM.
  • The company’s longest-serving director, Patty Akopiantz, will also step down at the end of the year.
  • Wallace and Kramer were facing a vote against their return by the Australian Shareholder’s Association.

The fallout from AMP’s fee-for-no-service scandal continues, with the company today announcing the resignation of three non-executive directors.

Vanessa Wallace and Holly Kramer will step down ahead of the company’s Annual General Meeting this Thursday.

Both Wallace and Kramer faced a vote against their return from the Australian Shareholders Association (ASA) at the AGM.

Patty Akopiantz, the company’s longest-serving director, has also offered to step down but will serve until the end of 2018 to help ensure a smooth transition.

The ASA had planned to use undirected proxies to vote against the reelection of Kramer and Wallace at the AGM, and still plan to vote use them to vote against another director Andrew Harmos.

The organisation cited the delay in reporting to ASIC and alleged interference with the Clayton Utz independent report as the reasons for their view.

“Although they were not on the (main) AMP Board at the time of the original unethical behaviour in the advice business, the three candidates’ tenure did cover the later part of the ASIC investigation (except for Mr Harmos) and in particular the alleged intervention in the Clayton Utz report,” the ASA said in a statement outlining its case.

Kramer, who joined the board in October 2015, was on the Audit Committee, while Wallace, appointed to the board just two years ago, was on the People and Remuneration Committee.

“In view of AMP’s announcement of the acceptance of collective responsibility we will be voting against the three directors standing for election on May 10. As each of the other existing directors, including [interim chairman] Mike Wilkins comes up for re-election we will also vote against their re-election,” the ASA said.

Observers believed that opposition to AMP’s resolution on the re-election of the three directors as well as the remuneration report, may generate a vote against of around 30%, which would mean a first strike under the federal government’s two-strike rule.

The company has now lost its chairman, CEO, general counsel and three directors in the wake of revelations at the financial services royal commission.

Last month senior counsel assisting Rowena Orr submitted to the commission that AMP and the Commonwealth Bank broke the law on multiple occasions, putting maximising revenue ahead of customer welfare.

The submission also said that the absence of a compliance culture at AMP reached to the top of the company.

Senior AMP managers knew that charging fees without providing a service was a breach of the law but the practice continued even after it was first reported it to the corporate regulator, ASIC, in 2009.

The company subsequently rejected allegations of any criminal wrongdoing.

Mike Wilkins, who joined the board in September 2016, was appointed AMP’s acting chairman following Catherine Brenner’s resignation last Monday.

AMP’s general counsel Brian Salter parted ways with the business at the same time over the company’s involvement in changes to the Clayton Utz report and allegations that ASIC was mislead.

Wilkins conceded that pressure from the investors led to the latest bout of board changes.

“Our shareholders are demanding board accountability and need to know that meaningful change is underway. I’d like to thank Patty, Vanessa and Holly for their service to AMP,” he said.

“They are extremely capable directors who have all made valuable contributions and brought great diversity of thought and experience to the board. They have listened to and acted on the feedback from our investors.”

Financial industry veteran David Murray is set to become AMP’s new chairman at the AGM on Thursday.

The search for a new CEO is currently underway with Wilkins currently acting in the role.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.