An article in a recent issue of The Australian Financial Review by former ASX CEO Elmer Funke Kupper on the goings on at AMP reminded me that corporate karma is alive and well.
Kupper reflects on comments made by AMP’s new chairman David Murray that the ASX governance principles were partly to blame for the widely publicised woes at the financial giant.
One of Murray’s arguments was that these principles expect too much of the board, to the point where management is hamstrung and unable to get on and do its job.
Kupper is quick to point out that ASX principles are all about standards, not performance – and I must concur.
As Kupper puts it, the damage at AMP was largely self-made, over many years. And while he is happy to concede that many governance principles can probably be improved, he remains adamant that they had very little to do with the mess AMP found itself in.
He’s right. Principles, let us remember, are neither regulations nor laws. If you don’t wish to comply with the ASX governance principles, you are free to put forward a logical case that outlines why they don’t suit your company at a particular juncture. If the argument is well-presented, the market will accept it.
Furthermore, given that the ASX principles are standards in much the same way as we have a litany of standards covering everything from service excellence to quality assurance, the objective should be for the organisation to develop its own adaptation of that standard in a way that is appropriate to the organisation and serves to improve the way it operates.
I am sympathetic to the argument that too much regulation or too many standards just create an impost on and unnecessary cost to the company. I am by no means advocating for more, but please let us not blame the standards for what was a profound failure throughout AMP to do the right thing.
Yes, corporate karma is alive and well. And while it may not get you in the beginning or even at some other point in the journey, you can be sure of one thing:
It will get you in the end.
Until next time,