The end of Peter Mason’s eight-year tenure as chairman of AMP will inevitably be twinned with his imminent and controversial departure from the David Jones board. It shouldn’t be, given that his term at AMP has reached a natural end.
Mason, a director of AMP for ten and a half years and chairman since September 2008, stayed on a little longer than planned to oversee the smooth transition from former chief executive, Craig Dunn, to his successor, Craig Meller, at the start of this year. That was the natural punctuation point for Mason’s term as chairman.
With the retirement of former AXA Asia Pacific chairman, Rick Allert, that was also announced today, it also creates a neatly symmetrical moment in AMP’s history, with the two men who chaired the fierce traditional insurance industry rivals at the point of their merger should announce their departures today.
The new AMP chairman, longtime Macquarie Bank senior executive Simon McKeon, will inherit a boardroom that will be strengthened by the appointment of the life insurance industry veteran Trevor Matthews. He will preside over an organisation that still has some unfinished business.
The 2011 acquisition of AXA’s Australasian businesses has been bedded down and AMP has extracted about $150 million of synergies from its integration. It also has a fabulous growth engine in the North platform, which it acquired through that purchase.
Meller does, however, have his hands full dealing with the collapse in the profitability of AMP’s wealth protection business, with claims and lapse rates soaring. While it appears to be an industry-wide problem, the scale of AMP’s exposure makes it a particular issue for the group.
In a KGB interview last month, Meller indicated it would take some years for AMP’s response to structural changes in wealth protection to work their way through to its performance.
McKeon and Meller would also be conscious that while the integration of AXA has been well-executed in terms of the synergies extracted, AMP’s share price has badly under-performed the market.
That’s not necessarily been an issue confined to AMP. Most wealth management businesses have experienced some pressures since the financial crisis, but they’d be well aware of the need for AMP to continue to improve returns to shareholders.
The seamless transitions of chief executives and chairmen at AMP contrast with the messy situation at David Jones. The controversial approval of directors’ share trading; a chief executive who, amid tensions with the board, signalled his intention of resigning (and now appears to be having second thoughts); and the merger approach from Myer has completely destabilised and gutted the board.
Mason will leave David Jones’s board dissatisfied with the way his tenure there has ended. His departure from AMP, however, will come with the satisfaction of having completed a successful board and CEO succession plan.