Ailing fund manager AMP can learn lesson from rockers Van Halen
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Rockers Van Halen had an infamous way of spotting problems when they were setting up for live gigs.
Tour riders at concerts would request bowls of M&M’s backstage with all the brown candies removed. Rather than a symptom of rock-’n-roll excess, the demand was a test for venue managers setting up the band’s elaborate shows, according to vocalist David Lee Roth. If brown M&M’s were present, it was a signal that electrical, audio and safety issues might have been skimped on, too.
There’s a lesson in that for David Murray, the veteran Australian banker who resigned on Monday as chair of ailing fund manager AMP.
Murray is a former CEO of Commonwealth Bank of Australia and author of a 2014 official report into the country’s financial system. He was brought in just more than two years ago as part of a board clean-out to address scandals arising from a government inquiry by high court judge Kenneth Hayne, including charging life insurance fees to dead people and lying to the corporate regulator.
Murray has been brought down by his insouciant approach to an entirely different outrage: reports in the Australian Financial Review that an executive whose bonus was docked after settling a sexual harassment complaint had been promoted to head AMP’s investment management unit. Director John Fraser will also leave, AMP said on Monday, and the company’s Australia boss quit without explanation last month.
For several years, Murray has used his position as a lion of the country’s financial industry to oppose regulators seeking to draw links between general misconduct and their core oversight activities.
Telltale signs
A push by government agencies to more closely scrutinise the internal behaviour of companies was overreach that would lessen competition because “you can’t regulate for culture”, he said shortly before starting at AMP. “The distinctive culture of one organisation is part of its competitive advantage,” he argued in 2016.
Let’s set aside what the current case and resulting internal revolt among employees say about AMP’s “distinctive culture” and the extent to which it’s a competitive advantage. The lasting lesson should be that regulators tasked with ensuring a stable and honest corporate sector are quite right to take a holistic view of the way a company runs itself, by peeking into the metaphorical M&M’s bowl for telltale signs of bad behaviour.
After all, the real test of a company isn’t so much whether sexual harassment ...
Tour riders at concerts would request bowls of M&M’s backstage with all the brown candies removed. Rather than a symptom of rock-’n-roll excess, the demand was a test for venue managers setting up the band’s elaborate shows, according to vocalist David Lee Roth. If brown M&M’s were present, it was a signal that electrical, audio and safety issues might have been skimped on, too.
There’s a lesson in that for David Murray, the veteran Australian banker who resigned on Monday as chair of ailing fund manager AMP.
Murray is a former CEO of Commonwealth Bank of Australia and author of a 2014 official report into the country’s financial system. He was brought in just more than two years ago as part of a board clean-out to address scandals arising from a government inquiry by high court judge Kenneth Hayne, including charging life insurance fees to dead people and lying to the corporate regulator.
Murray has been brought down by his insouciant approach to an entirely different outrage: reports in the Australian Financial Review that an executive whose bonus was docked after settling a sexual harassment complaint had been promoted to head AMP’s investment management unit. Director John Fraser will also leave, AMP said on Monday, and the company’s Australia boss quit without explanation last month.
For several years, Murray has used his position as a lion of the country’s financial industry to oppose regulators seeking to draw links between general misconduct and their core oversight activities.
Telltale signs
A push by government agencies to more closely scrutinise the internal behaviour of companies was overreach that would lessen competition because “you can’t regulate for culture”, he said shortly before starting at AMP. “The distinctive culture of one organisation is part of its competitive advantage,” he argued in 2016.
Let’s set aside what the current case and resulting internal revolt among employees say about AMP’s “distinctive culture” and the extent to which it’s a competitive advantage. The lasting lesson should be that regulators tasked with ensuring a stable and honest corporate sector are quite right to take a holistic view of the way a company runs itself, by peeking into the metaphorical M&M’s bowl for telltale signs of bad behaviour.
After all, the real test of a company isn’t so much whether sexual harassment ...
