AMP chairman David Murray resigns over company's handling of sexual harassment allegations
Shareholder protests appear to have prompted the chairman of AMP, David Murray, to resign over the insurance company’s handling of allegations of sexual harassment against a senior executive, Boe Pahari, and his subsequent promotion.
AMP made a statement to the ASX on Monday morning saying that Murray and another director, John Fraser, the former head of the Treasury, had resigned.
“These changes respond to feedback expressed by some major shareholders regarding the appointment of Mr Pahari as AMP Capital CEO on 1 July 2020,” AMP said in a statement.
Murray has been replaced by Deborah Hazelton.
The executive at the centre of those allegations, Boe Pahari, has also been demoted, the ASX statement said.
Pahari was promoted on 1 July to CEO of AMP Capital, one of the most important divisions in the company, apparently triggering the shareholder backlash.
The board announced on Monday he would now resume work at his previous level.
AMP’s decision to promote Pahari prompted the woman at the centre of a sexual harassment claim, Julia Szlakowski, to go public a week ago and release details of the allegations levelled against Pahari concerning his conduct in 2017.
Szlakowski, a former AMP employee who now lives in California, accused the company of attempting to downplay the accusations levelled against Pahari, after the company described the complaint against the executive as being “low level”.
She alleged through lawyers that the private capital boss engaged in “serious, persistent and wide-ranging” conduct against her. The decision to report it had affected her career at AMP, she said.
Details of Szlakowski’s seven-page complaint reportedly alleged Pahari referred to his “limp dick” when she turned down his offer to use his credit card to buy clothes, called another employee “a fag”, and asked her about the “oldest man she dated” in front of her colleagues.
Szlakowski’s Australian lawyer, Maurice Blackburn principal Josh Bornstein, alleged AMP’s public comments about the complaints were “deceptive and misleading” by “trivialis [ing]” the conduct.
“There is nothing in AMP’s public statements that acknowledge that Ms Szlakowski was [allegedly] sexually harassed and traumatised and that her career with the company was prematurely finished as a result of what happened,” he said.
Murray noted in his statement that Pahari’s promotion had been supported unanimously by the board.
“The board has made it clear that it has always treated the complaint against Mr Pahari seriously. My view remains that it was dealt with appropriately in 2017 and Mr Pahari was penalised accordingly. However, it is clear to me that, although there is considerable support for our strategy, some shareholders did not consider Mr Pahari’s promotion to AMP Capital CEO to be appropriate.”
Murray said his decision to leave “reflects my role and accountability as chairman of the board and the need to protect continuity of management, the strategy and to the extent possible, the board”.
The AMP’s chef executive, Francesco De Ferrari, will assume direct leadership for the AMP Capital business, the statement said.
The new chairman, Debra Hazelton, thanked Murray and Fraser for their contribution.
The shareholder advisor group, the Australian Council of Superannuation Investors (ACSI), welcomed AMP’s decision to demote Pahari and the changes to the AMP board.
“Today’s announcements are an acknowledgement by the company that significant change needs to occur. This is an important step in addressing concerns raised by investors’ and resetting company culture,” ACSI CEO Louise Davidson said.
“The company must now get on with the job of rebuilding public confidence, and in particular, the trust of their staff.
“Investors will be continuing to engage with AMP to understand how these decisions were made and how the company intends to strengthen company culture.”