Backlash over AMP Capital’s new CEO should sound a warning bell for all business leaders

Over the past few days, at Women’s Agenda, we’ve had numerous emails from readers sharing concerns about a 2017 sexual harassment claim and the appointment of AMP Capital’s new chief executive, Boe Pahari.

It seems staff within AMP also have their concerns about Pahari’s appointment, given it was the issue to receive the most ‘votes’ during a company virtual town hall session, in which the newly minted leader spoke to staff for the first time, according to sources quoted by the Australian Financial Review.

Clients and investors have also raised the issue, notes another report. And female employees have “exploded” at senior management, with the AFR publishing a detailed account of the virtual meeting that occurred last Wednesday evening between 100 or so staff in the People and Corporate Affairs division of AMP. The one remaining female executive of AMP, who works among a team of eight, fielded the questions.

The concerns have been raised after journalist Michael Roddan revealed that AMP had promoted Pahari  to lead AMP Capital. The board did so despite knowing that he had been financially penalised for verbally sexually harassing a female subordinate, claims that led to a settlement between AMP and the woman in 2017. The board had been briefed on the situation and decided the matter had been dealt with.

They said the “appropriate consequences” — including a financial penalty and counselling for his conduct — had already been imposed on the incoming CEO.

Pahari has also been quoted as saying he regrets the comments, has apologised and has learned from the matter, “and applied those learnings in trying to ensure that our employees feel safe and valued at work”. (Read the full statement in the AFR).

Big Investigation from me:

AMP promoted senior employee to new role as CEO of AMP Capital, one of the highest paid + important positions, despite knowing he was financially penalised after settling sexual harassment claim brought by a female subordinate.https://t.co/DwqwPAi1DR

— Michael Roddan (@MichaelRoddan) June 30, 2020

There are just two women on the eight person AMP Limited board. The board was once dominated by women. In 2018, three women left the AMP board in one day and five across the full year, as it pushed for “meaningful change”, following the Australian Banking Royal Commission. The limited board of AMP Capital Holdings features one woman and five men.

We wrote extensively about this female exodus from the AMP board at the time, and were particularly concerned about some of the sexism being levelled at the board directors by the media and others, and how women were largely being blamed for the mess of the royal commission. Some actually questioned whether women were capable of board roles.

I still recall some of the analysis about the incoming AMP chair David Murray (the previous chair was Catherine Brenner).  He was portrayed as a safe set of hands able to steer the AMP ship back on course. He would bring experience and strength to the company. The AMP board flipped from being female-dominated to male-dominated — at one point it was all male — and as we can see from the numbers in the senior executive team, it’s also a virtually all-male affair.

I can’t understand this new appointment at all, and I can’t understand how the board would think that such an appointment wouldn’t receive the kind of scrutiny and backlash that it has. How they could not fully consider the optics of such a move, and what it tells staff, investors and all of us about who gets promoted?

We know culture starts at the top. Decisions regarding who gets promoted are not only vital to the future culture and standards of an organisation, they are also vital in the message they send to all stakeholders involved in the business.

And this is precisely the problem. We not only turn a blind eye to harassment we promote the perpetrators. https://t.co/I3Pa3vAOYi

— Michele O’Neil (@MicheleONeilAU) July 1, 2020

And all of this, of course, is occurring against the backdrop of the allegations made against ex-judge Dyson Heydon, as we’re questioning what, if anything, has changed when it comes to workplace sexual harassment in Australia.

It’s also happening just months after Sex Discrimination Commissioner Kate Jenkins’ handed down her 2019 forensic Respect@Work report, making 55 clear recommendations for reform. As Kristine Ziwica reported earlier this week, we’re yet to hear a formal response from the government to this report

But employers could step up to really consider these recommendations and publicly respond. They could do more than simply urge people to “raise their concerns” (which AMP is reportedly doing) and actually take action on some of the concerns being raised.

In the meantime, I’m heartened by the response this appointment has created. Clients, investors, staff members, the media and others are raising those concerns, they’re making noise and will continue to do so, and they’re sending a message to every board regarding high-profile appointments in the future.

This is an edited version of an article first published by Women’s Agenda.

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