‘Rainmaker’ Boe Pahari should go if AMP is to regain trust

After everything we learnt during the Hayne royal commission about the danger of poor culture in the finance industry, AMP’s continued insistence that one of its most senior executives, Boe Pahari, remain in his position is inexplicable.

Mr Pahari was recently appointed as AMP Capital chief executive and is described as a “rainmaker” for the troubled financial services giant. But in 2017 he was fined $500,000 (a quarter of his annual bonus) for what the company dismissed recently as “low level” disciplinary issues, revolving around "comments made and language used" to a young female subordinate.

Julia Szlakowski and AMP Capital’s Boe Pahari.Credit:

The woman at the centre of these issues, Julia Szlakowski, has been frustrated by AMP’s response and Mr Pahari’s promotion. Earlier this week, she released to The Age the gritty details of a long night in London which she says amounted to sexual harassment.

After a work meeting, she claims Mr Pahari repeatedly asked her to use his credit card to buy clothes so he could take her to dinner at a swanky restaurant. When she refused he allegedly told her she was effectively accusing him of having a “limp dick”. She says he took her to a private club with his mates from the Ferrari club, called another employee “a fag”, asked how old her oldest boyfriend had been, suggested they communicate via the encrypted WhatsApp to avoid company attention, bombarded her with late-night text messages and paid to extend her stay in London. All of this happened after he had brought her to the meeting from the United States on the company’s coin when her immediate boss saw it as unnecessary, according to her complaint.

Ms Szlakowski says she fled London the following morning, quit the company in 2018 and, “traumatised,” made a formal complaint.

AMP appointed a London QC, Andrew Burns, to investigate her complaint, and his report apparently found some of the allegations proven. Mr Pahari’s $2 million bonus was docked by $500,000 and Ms Szlakowski received a payout which is understood to be of a similar amount. It’s worth noting here that until the embarrassment of recent media attention, the whole debacle had cost AMP virtually nothing.

Mr Pahari's career only blossomed and even now the company’s CEO and board stand by their man, who recently declared himself chairman of the company's "Inclusion and Diversity Council" while appointing almost all male line managers under him.

Mr Pahari’s division of the business, AMP Capital, is the hope of the side in an otherwise troubled company. The mix of unlisted infrastructure and real estate funds he oversees is designed to attract billions from superannuation funds, international sovereign wealth funds and wealthy individuals.

He has, as Age columnist Elizabeth Knight explained on Thursday, become a key person – an executive whose mere presence and record of success gives investors confidence, and whose removal could lead to funds being withdrawn.

But if this indeed buys him a level of impunity, that impunity should end, for both moral and practical reasons. The Hayne royal commission, which focused heavily on AMP under an earlier leadership, showed clearly that bad financial performance and a bad culture are linked.

It’s true Commissioner Hayne was talking more explicitly about the industry’s treatment of customers rather than staff. But Simon Mawhinney, the managing director of key AMP investor Allan Gray, clearly see the two as linked in AMP's case.

Note from the Editor

The Age’s acting editor, Michelle Griffin, writes a weekly newsletter exclusively for subscribers. To have it delivered to your inbox, please sign up here.

"Assuming the allegations are true, we question how [Mr Pahari] can earn the trust, confidence and respect of colleagues, clients and shareholders,” he said, and we agree. In the #MeToo era, behaviour as outlined by Ms Szlakowski sends a bad message to women who work at AMP and to customers, particularly female customers. This case also suggests AMP has learnt little from its humiliation before the royal commission.

Knight argued it was not usually in the interests of shareholders to force wholesale resignations after a crisis, and The Age agrees. We do not call for the board or CEO to go. However, we do call on them to act without further delay. They should suffer the short-term financial pain of the resignation of their rainmaker and then try to apply themselves earnestly to regaining the trust of their long-suffering investors.

Source: Read Full Article