AMP resignations over sexual harassment mishandling set new precedent

AMP resignations over sexual harassment handling set new precedent

Investors have used their power to tell AMP – and every other listed company in Australia – in no uncertain terms that handling sexual harassment allegations behind closed doors will no longer suffice.

A sexual harassment scandal has claimed three scalps at AMP. The listed financial services giant’s chair David Murray and director, and former treasury secretary, John Fraser have both resigned, effective immediately.

A senior executive, Boe Pahari, whose recent promotion caused the controversy, has been stood down as AMP Capital chief executive. He remains employed in the role he held previously.

After Pahari was promoted it was reported that he had been ‘penalised’ $500K in 2018  after an internal investigation triggered by allegations of sexual harassment by a former member of staff, Julia Szlakowski.

The company’s initial response to the media reports was to downplay the severity of the complaint and back its decision to promote Pahari. That eventually prompted Szlakowski to trade in her privacy and go public with her version of events.

That served to increase the considerable pressure on AMP for its handling of the situation. A week later, on Monday morning, the pressure was sufficient to require a very senior resignation.  

“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.

The outgoing chair David Murray said this:

“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. Although the board’s decision on the appointment was unanimous, my 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.”

This is worth celebrating. Not because I’m a sadist who takes pleasure in seeing other human beings falter, nor because I’m a rabid hater of all men. It is worth celebrating because, as I noted last week, it is time for men and companies to be held to account for sexual harassment.

Until perpetrating sexual harassment in a workplace setting is deemed an actual offence that is unacceptable, from which adverse consequences flow, nothing will change.

If sexual harassment complaints are nothing more than a mere inconvenience senior men have to incur, that do not preclude them from being promoted, it will continue. As it has.

Despite frequent and agitated assertions that #MeToo has gone too far, that being a man at work in 2020 is an impossible minefield to navigate, sexual harassment has very rarely proved problematic for powerful men in any meaningful way.

AMP’s handling of Boe Pahari is a case in point. The ‘penalty’ Pahari received for his conduct was, reportedly, just one quarter of his bonus being withheld. So apparently he didn’t even have to reach into his own pocket. His bonus was just smaller than it would have been.

And, as Murray noted Pahari’s promotion was unanimously approved by the board: that means there was not a single person who considered Pahari having to be penalised for his actions in regard to a more junior member of staff to be problematic.

The fact this very controversy was not anticipated by AMP is testament to how inconsequential allegations of sexual harassment have been considered in corporate Australia. If a company like AMP, so recently scraped over the coals by a Royal Commission, was not on high alert for the reputational damage it might wear for promoting an individual enmeshed in a sexual harassment complaint, what board would be? It’s persuasive evidence that matters of sexual harassment were not considered particularly “serious”.  

Which is why the resignations of David Murray and John Fraser, as well as Pahari’s demotion, are historic. Investors have used their power to tell AMP – and every other listed company in Australia – in no uncertain terms that handling sexual harassment allegations behind closed doors will no longer suffice.

Despite the moral and ethical case for stamping out sexual harassment being made, pleaded even, passionately, for years, investors wield actual power. And here they used it to yield a result.    

It sets a powerful precedent that sexually harassing members of staff can no longer be safely minimised and deemed business as usual. Impunity is no longer guaranteed. Risk might finally be attached to sexual harassment and that’s not a grave miscarriage of justice.

It redresses one.

Sexual harassment has never been victimless; it has cut countless careers short, prompted talented and promising professionals to leave companies and vocations and dreams, it has contributed to anxiety and depression and breakdowns. The damage has mostly been invisible but it’s there.    

It is time for perpetrators and enablers – not victims – of harassment to wear consequences. That’s not vindication. It’s accountability and it’s long overdue.  

Every executive and board member around the country ought to consider themselves on notice.

Imagine if every woman in Australia who’s levelled a formal complaint against a powerful man for sexual harassment in the last three years – whose employer has seemingly let it slide – came forward in the next month? That’s the scenario an astute board ought to be contemplating.

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