Sydney View: Sense of déjà vu infuses AMP's disclosure vows

Shareholders in AMP could be forgiven for experiencing a sense of deja vu last week.

Andrew Mohl, then the newly appointed interim chief executive, told journalists that the nation's biggest funds manager and insurer had learned its lesson about poor communication.

"We will be working very hard to ensure that our disclosures and communications are clear, full and easily understood and that we have a well-informed market," he said.

Fine words indeed, and ones he repeated in New York this week after being appointed permanent chief executive.

But they did sound very similar to what his predecessor Paul Batchelor had to say after his own appointment to the job in July 1999.

"You cannot overcommunicate. Whatever we think is an appropriate level of communication, the recipient wants more," he said.

"That is something that perhaps we didn't recognise."

And still don't. Batchelor's sudden demise last week came after a spectacular fall in the group's share price, partly due to falling share prices around the world.

But the spectacular loss in confidence was almost entirely attributable to poor communication.

If it's any consolation, AMP chairman Stan Wallis had this to say: "Let me reassure you that we have learned from our mistakes and we are working to put in place processes to ensure these mistakes are not repeated in the future."

Shareholders will be hoping that Mohl falls under the classic description of a bore: a man who, when you ask him how he is, tells you.

Shareholders will want to feel that when they ask him how the company is going, he will tell them.

The evidence so far is that he has some work to do on this point.

The biggest question for the markets after his appointment was the fate of its Pearl with-profits fund should the London FTSE-100 index plunge below 3700 points.

AMP announced that it had talked to prudential authorities about measures that would require no further injection of capital.

But the AMP statements were vague about whether this proposal had been approved.

Even analysts described the situation as "confused and far from transparent".

But Mohl's first few days in the job were clearly good enough to make the AMP do a double-take, abandon their announced global search for a new chief executive and appoint him immediately.

Mohl is well-liked by the markets, which gives him an immediate advantage over Batchelor, although the manner of his appointment did raise a few eyebrows.

Some thought his sudden appointment revealed a board in crisis. Others thought it simply a reflection of the fact that the best man for the job was already in the office.

More than anything, AMP needed certainty and Mohl at least provides that.

But AMP also needs a strategy and that will be Mohl's biggest challenge.

The AMP received the corporate equivalent of an undercut last week from an analyst at the world's biggest broking firm Merrill Lynch, who criticised the company's blind faith in the markets.

"AMP is probably currently pinning its hopes on an equity market recovery," the analyst wrote.

"We believe this to be a risky strategy given current equity market conditions. In our view, it is not the time nor place to be brave."

It was not a ringing endorsement. But Mohl at least has attempted to put some sort of strategic vision together within his first week.

Apart from better disclosure, he wants to focus on core business, close off poorly performing businesses, sharpen the company's leadership qualities and tackle some of the group's sacred cows - a legacy of its 150 years as a mutual society.

He admitted that strategy would account for only around 10 per cent of the group's success.

How the company implemented its reforms would account for the rest. A rebound in global equity markets would probably help as well.

* Giles Parkinson is deputy editor, new media, of the Australian Financial Review.