AMP directors are in crisis talks to save their jobs, after news they failed to interview former chief executive Andrew Mohl for the chairman role, when it suddenly fell vacant two years ago, sparking outrage among investors.
One senior AMP source said they were "absolutely staggered" to read revelations in Thursday's The Australian Financial Review that the former CEO was not even interviewed for the chairman role following the shock departure of Simon McKeon in 2016, despite Mr Mohl having expressed his keen interest and said the time was right for his return.
"What AMP need on their board right now is a cohesive, fighting team and clearly I think Andrew is putting up his hand and saying he is interested," the source said. "This time though I think AMP need to go to him but hopefully they approach all of the other potentially high-calibre candidates too".
On Thursday, AMP's executive chairman and interim CEO Mike Wilkins refused to answer questions about the wealth manager's besieged board as he was leaving the annual meeting of QBE, where he is also a director, saying: "this is the QBE AGM, the AMP AGM is next week".
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AMP bloodbath
AMP's AGM next Thursday is expected to be a bloodbath with the three board members facing re-election – Andrew Harmos, Vanessa Wallace and Holly Kramer – holding talks with investors on Thursday, including a 45-minute call with the Australian Shareholders Association, which along with several institutional investors plan to vote against the directors.
"They put forward a strong argument that board stability is important but the problem is that the culture is endemic," said ASA representative Allan Goldin, who revealed the board plan to move quickly to appoint a new CEO and a replacement chairman with executive chairman Mr Wilkins and now Mr Mohl in the mix.
AMP has been plunged into crisis after revelations at the banking royal commission that it had charged more than 15,000 clients fees for services it had not provided, and then misled the corporate regulator about the scandal on 20 separate occasions. The revelations have wiped more than $4 billion from AMP's market capitalisation in just six weeks and forced the resignation of both the CEO Craig Meller and chairman Catherine Brenner.
Investors at the AGM are expected to question the hasty appointment of Ms Brenner in 2016, following the revelations that Mr Mohl – who more than trebled the share price during his tenure as CEO – called interim AMP chairman and New Zealand businessman John Palmer to express his interest in the role, only to be called by headhunters Egon Zhender several weeks later to be informed that Ms Brenner had been given the job.
One senior recruiter pointed to the contested appointment of BHP Billiton chairman Ken MacKenzie as best practice for chairman succession with a senior independent director running the process, a separate sub-committee and external mapping, none of which appeared to be in place when Ms Brenner was quickly appointed following Mr McKeon's surprise departure.
"It is not about whether you like Andrew or Catherine but whether there was a robust process in place that investors should be asking," a recruitment source said. The AMP source confirmed a "very strong relationship" between Ms Brenner and Mr Palmer, who they described as a "very strong character".
Wilkins, Mohl or neither
Despite the revelations, investors are divided on whether Mr Mohl should make a return to AMP, pointing to the 15 per cent protest vote against him on the Commonwealth Bank board last year and concerns that he would consider himself the quasi CEO.
"Shareholders remember his role on the CBA board," Australian head of proxy firm ISS, Vas Kolesnikoff said. "Nevertheless, AMP is looking for a new non-executive director and Andrew Mohl may be a perfect fit to come in and ultimately step into the chairman's role. The board is pretty light on in tenure and the board needs some direct experience in the sector and the business and its issues. There are plenty of consumer and retail marketing people there but I'm not sure that's helping much at the moment," he said.
Executive chairman Mr Wilkins is also a favourite to become chairman, although the ASA said he was part of the problem having chaired AMP's risk committee and speculation is rising that Mr Wilkins has too much on his plate with two other board seats: QBE and Medibank Private.
"It depends on the person, but the big trouble people run into is when there is trouble at more than one company. That's when your workload becomes unmanageable," Dean Paatsch, a director of governance adviser Ownership Matters said.
Fund manager Geoff Wilson said that, "Mike Wilkins is incredibly capable but it is difficult for any board to put an ex-CEO in as chairman unless they are major equity owners of the business," although others point to the return of Brian McNamee to CSL as an example of where it can work.
QBE chairman Marty Becker told investors on Thursday that he supported Mr Wilkins' numerous roles but was open to a dialogue if there was a feeling it was too onerous.
"I believe he felt that it was his duty to step into the AMP role, when he didn't really have to and he was the obvious person to step into the wilderness," he said at the AGM. "We have left the conversation open".
Clean-out needed
However, veteran investor Peter Morgan warned the entire AMP board needed a clean-out with Mr Mohl part of the club that had caused problems at CBA. He said the role of boards were "massively overrated" and the debate had nothing to do with gender.
"Boards are massively overrated. They have too much conceptual power. Whoever is put up at AMP will just come out of the club again," he said.
"If the business club turns this into a gender fight and starts eating each other up, it's just silly. It is like picking school teachers who are getting 60 out of 100. The whole thing needs a clean out."
On Wednesday, ratings agency Standard & Poors placed AMP on a so-called "creditwatch" with negative implications as it assesses the damage to brand.
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