The AMP went through a major reputational shake down with the Hayne Royal Commission and members of the board exited during 2018 when various parties turned up the heat. The then chair Catherine Brenner left the board and other board members followed suit. Key management personnel also exited the building.
This was in the heat of the Hayne Royal Commission when every single financial institution was copping a belting. CBA, ANZ, the NAB and Westpac were all flogged in the public square for what were indefensible examples of poor behaviour towards consumers.
It was a royal commission focused on misconduct towards consumers, who at times were unwittingly talked into buying products that lined a salesperson’s pocket and caused folks grief.
The royal commission did not spend much time examining way banks treated their staff, to the dismay of the Finance Sector Union.
Reporting by the AFR on the background to the appointment of Boe Pahari as CEO of AMP Capital unleashed the backlash leading to board changes yesterday.
The controversy claimed two prominent board members: financial services stalwart David Murray and former Treasury head John Fraser.
Pahari has gone back to the role he held as head of infrastructure equity before he was promoted by the AMP board of directors - in a decision that Murray declared was unanimous in a media release at the time.
Murray has taken the bullets for the rest of the board in other words.
The Pahari case demonstrates that boards need to be cognisant of their role in governing holistically and being aware of the perceptions certain steps or decisions they take will create, not just in the minds of the public but also staff.
There needs to be a reinforcement of the fact that the ability of an individual or group of individuals to turn a quid, while important, should never cast a shadow over the need for the corporate to set a precedent for what is acceptable, respectful behaviour between colleagues.
This is about setting the right tone for a business - which can be difficult when businesses such as banks and others drive themselves principally by financial measures.
Setting a respectful tone for behaviour amongst colleagues is critical not just because harassment of any kind is inappropriate.
Any organisation that fails to institute a proper standard of behaviour across a business should remember that they are hurting not just those that are the subject of misconduct.
They are also hurting their employees and investors if significant shareholders begin to think about moving funds someplace else because of attitudes people believe have been demonstrated in actions taken by a board.
Why would prospective employees treat a financial institution as an employer of choice if case studies on the public record demonstrate that financial services business, listed or otherwise, is incapable of ensuring all of its executives are an embodiment of good corporate culture?
The Hayne Royal Commission caused us to focus heavily on what happens when we place a focus on profit that is disproportionate to principles of common, decent and caring behaviour.
It is a shame that stories still emerge from within the financial services sector that give people reason to doubt whether issues of community standards and expectations have been the subject of anything other than lip service.