The Governance Thematic Review assessed the foundational elements of good governance by reviewing the policies, processes and practices of boards of regulated entities. This included assessment against legislative requirements, RBNZ and FMA guidance, as well as local and international guidance on good governance practices.
RBNZ Deputy Governor Christian Hawkesby says history has shown that good governance – particularly around the core accountabilities of organisational strategy, culture and risk management – is critical to the success of financial institutions and the stability of the system as a whole.
“We therefore all rely on boards to provide effective direction, oversight and governance,” Mr Hawkesby says.
“We observed a variety of governance practices across entities, which is why the report shares examples of good practice that others can learn from.”
A sample of 29 entities regulated by the RBNZ and/or the FMA across the banking, insurance, non-bank deposit taking and investment management sectors participated in the review.
FMA Executive Director Regulatory Delivery Clare Bolingford thanked the boards and executive teams for their engagement and participation in this review.
“There is real value in maintaining an open and collaborative approach to support continuous improvement,” Ms Bolingford says.
“The report shows how and where boards have built the foundational elements for good governance practices and effective oversight. Establishing and maintaining these is fundamental. It supports boards in moving to a more comprehensive focus, combining robust governance frameworks, board behaviours and culture to deliver for customers, shareholders and all their stakeholders.”
Individual feedback has been provided to participating entities and we will be engaging with these entities to support the recommended changes.
We encourage boards of regulated entities who did not participate in the review to assess their governance arrangements against our expectations and adopt good practices outlined in this report. We will also be considering these findings in upcoming policy reviews.
More information
Read the Governance Thematic Review report: Cross-sector thematic review on governance
