Management at AMP Limited (ASX: AMP) finally bowed to public pressure with Chair David Murray, Director John Fraser and recently appointed CEO of AMP Capital Boe Pahari all stepping down over the weekend.
Importantly, Debra Hazelton who is also a board member of the Treasury Corporation of Victoria will be taking over as Chair and Mr Pahari will move back to his original position, with Group CEO Francesco de Ferrari taking on board the position at AMP Capital.
Shackles of the past released
Whilst this decision took somewhat longer than we would have liked, it is the right move as the company seeks to move forward, rather than look to the past.
AMP’s recent earnings result, in which it highlighted strong underlying growth and announced the wide-ranging reduction of fees on its superannuation products, was at risk of being derailed by this leadership and cultural crisis.
Having spent some time personally at Commonwealth Bank of Australia (ASX: CBA) during Murray’s tenure, I had always questioned his ability to change their entire nature of AMP’s business model – this change gives me increased confidence in the probability of a successful turnaround.
I’m expecting a new appointment to AMP Capital will be made in the coming months, with the CEO holding a caretaking role until that time. There’s potential here for a rebrand and an eventual spin-off to improve shareholder value.